Reinvesting in technology – Extend lifespan and maximize value

When a technological solution reaches its Return on Investment (ROI), it’s easy to think the work is done. However, to truly maximize the value of your investment and ensure the solution continues delivering over time, it’s essential to focus on reinvestments. In this article, we explore why reinvestments are crucial, how they can extend the lifespan of your application, and the types of updates you should consider.

Why reinvest after the ROI period?

After the ROI period, your technological solution has paid back its initial cost and begins generating net value for the business. However, technology is constantly evolving, and without continuous maintenance, the solution risks becoming obsolete. Reinvestments are crucial for two main reasons:

• Security and compliance: Regular updates protect your business from potential security risks and ensure compliance with new regulations.
• Extended lifespan: By updating and improving the solution, you can extend its lifespan, allowing the investment to generate value over a longer period.

Additionally, reinvestments reduce the risk of data breaches and downtime, enhance competitiveness through continuous improvements, and improve the user experience. Fine-tuning the user interface can also lead to higher productivity and greater user satisfaction.

How much should you reinvest to maximize value?

A general rule of thumb is to reinvest between 15–25% of the initial investment cost annually in your technological solution. However, this percentage may vary depending on the industry, type of solution, and how critical the application is to your business.

Example:

• Initial investment: 1 million SEK
• Annual savings: 500,000 SEK
• ROI period: 24 months (read more about what a reasonable ROI period is)

By reinvesting 15–25% (150,000–250,000 SEK) annually, you can ensure the solution continues to deliver value well beyond the initial ROI period. The impact on the ROI period is minimal, but the extension of the lifespan provides significant long-term benefits.

What to consider when reinvesting

Plan for reinvestments from the start

Include reinvestment costs in your long-term budget to avoid unexpected surprises.

Prioritize updates

Focus first on critical updates that impact security and compliance.

Evaluate regularly

Conduct regular analyses to identify areas that can be improved.

Collaborate with experts

Engage technical specialists to guide you on which updates provide the most value.

Reinvestments are not just an expense but a strategy to extend the lifespan and maximize the value of your technological solution. By planning long-term and prioritizing effectively, you can ensure your investment continues to deliver value for many years to come.