TCOs and ROIs and KPIs, Oh My!

Decision-making is hard.

Decision-making in areas where you might not be as well versed — like technology (or for me, my vintage car engine) — can be even harder.

One way to make decisions relating to technology is to remove the knowledge gap by using objective metrics. Here’s how.

TCO — Total Cost of Ownership

What is the total cost of not just purchasing, but owning, an asset? We think of this with cars: we have the purchase price and the cost to maintain the car to consider.

In a church, the same is true for HVAC units. They can cost as much as cars and be just as expensive to maintain.

TCO can also refer to time. How much time will someone on your team need to put into making a project or a request possible? Often, we discount the cost of time — but we shouldn’t.

ROI — Return on Investment

We frequently use this metric to measure the efficiency or profitability of a financial investment, but it can also be used for tech.

In ministry, efficiency should be a key metric which we monitor. The time put into a project or task (or a request for either) should be assigned an ROI that can be measured through tracking efficiency.  The time component of an ROI — when efficiency or profit is realized — should also be factored in..

KPI — Key Performance Indicator

While KPIs are all the rage in the corporate world, ministries are not using them like they should. KPIs are quantifiable indicators of progress towards a goal. They are not “warm fuzzies” — rather,  they can be measured.

A KPI also requires a clear goal and strategy. Without these, the metric becomes subjective and worthless. Many times, KPIs are lacking because ministries don’t have clear goals and strategy in place for what it means to accomplish their mission.

TCOs and ROIs and KPIs, Oh My!

Now, let’s put these metrics into practice. Our first example is a bit extreme, but that’s on purpose; I want to demonstrate how to use these metrics.

In this scenario, your church is embarking on a worship space renovation. There is a request for a $5-million video wall.

TCO — The wall costs $5 million, but what about annual support for the software and hardware? What about the time spent by staff to maintain it and configure it, based on current wages? What about time spent by staff creating content for it? How many years will this wall stay in service? Are these costs divided by five years or 10?

ROI — What efficiency is gained across the ministry as a result of this technology? How are the efficiencies gained realized across the entire ministry? What other costs can be saved as a result of this technology?

KPI — How many more people will attend as a result of adding this video wall? How many more baptisms will take place? How many more conversions? What ministry goals and strategies will see the needle move in a positive direction?

There are many other questions to be asked as you work through these metrics. While I can’t go into all of them here, this exercise should be applied often in your ministry — not just for large purchases but small ones as well.

Now, here is a smaller-scale example: your ministry is looking at new software. It could be ChMS or financial software. Or, if your church has a school, it could be a new learning management system. Or it could be for HVAC management. Whatever it is, you’re looking at a significant upfront cost.

TCO — You know the upfront investment, but what bout the ongoing costs? How long do you plan to have this software? Do you like to change it out every few years? (If so, the TCO goes up.) How much does implementation and support cost? How much time will be required to get it going and your staff trained to use it?

ROI — In the software scenario, this metric will take a hit to begin with; efficiency will drop during the implementation and training phases. But at some point, what efficiency will be gained? How much time will be saved? What specific processes can be improved to save time? How much money will be saved through improvements in processes and staff efficiency?

KPI — What are your key metrics, and how will they be impacted? Attendance? Baptisms? Conversions? Servants? While it is easy to say, ‘We will be able to serve better,’ that is not an objective KPI; it’s those warm fuzzies I talked about earlier.

OK, one more. (Have you got one more in you?)

We aren’t building buildings, buying video walls, and changing software every day (I hope). Even so, every ministry, every day, has a technology and/or facilities help desk that’s full of requests. I suggest each of these requests go through this kind of review. Otherwise, staff members are doing tasks that have little to no gain and everyone is busy, but no one is efficient.

Here is an IT example — but you could swap it out for any number of the tasks created by the daily requests your ministry receives across its departments.

In this scenario, the children’s ministry wants a shared email inbox. This way, their entire team can respond to emails about children’s ministries.

TCO — Pretty basic, here: TCO is primarily comprised of the licensing costs for the mailbox depending on your email setup. It is important to also include the time component for the staff who will set this up and the support component (for when folks forget how to use the shared mailbox).

Letting children’s ministry team members know this new email box exists is also part of calculating TCO.

ROI — What efficiencies will be gained with this shared email inbox? How much time is potentially saved by using it as opposed to forwarding emails around the team? How much more quickly are responses likely to go out? (Perhaps someone who is currently forwarding emails from another mailbox won’t have to do that anymore. Those minutes can add up, and it is important to evaluate them.) 

How long the team uses this shared mailbox is another important consideration.

KPI — Quantifying KPI in this scenario can be a challenge, but it doesn’t mean we shouldn’t try. What indicators will change? Will more kids show up on Sunday? It is easier to give “better customer service for the children’s ministry” as a KPI metric, but you need to objectively quantify that. Look back at the ROIs; KPIs can also be negative. So what happens if this box turns into a ‘black hole’ and team members stop checking it?

It is easy for a service department, like IT, to just say yes to every request. And for most things, they should. But if leadership is not helping them evaluate these requests, then subjective metrics can create inefficient departments with no objective accountability.

You don’t want anyone on your team to feel like they are wasting time. I’ve seen church staff spend days on tasks or projects that someone said mattered, only for it to go by the wayside three months in, and never be touched again after that. (A horrible ROI, by the way)

Instead, what if we avoided all that? What if we reviewed requests properly and then measured success? What’s better: going a bit slower to get what you need — and that will last — or the merry-go-round of quickly getting things done only to do it over and over again?

Metrics matter. Ask the servants in the Parable of the Talents in Matthew 25:14-30. Pay special attention to verses 21, 23 and 26.

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Originally published at https://churchexecutive.com/archives/tech-bytes-5