What is the RoI (Return on Investment) on a software for your Travel Business?

In our previous post "How to choose the RIGHT software for your Travel Business", we outlined the main differences between Software-as-a-Service and the more traditional desktop based software distribution model. Going forward in this post, we try to answer an oft-repeated question -

"What is my RoI (Return on Investment) on this Software for my Travel Business" ?

Assumptions

Number of itineraries made manually / per employee / per day = 5
Monthly Average cost of an employee = USD 600

Number of itineraries made by a software / per employee / per day = 20
Monthly Average cost of an Software = USD 1000


Calculations

For a company with 4 employees who work for 25 days in a month. A steady state condition is achieved in 2 Quarters post-software implementation

Case 1:
Excel or Pen & paperSpecialized Software for Business

Number of leads reverted to in a day = 5x4 = 20

Number of leads reverted to in a day = 20x4= 80

Number of leads served in a month = 20 x 25 = 500

Number of leads served in a month = 20 x 25 x 4 = 2000

Growth in Leads served month-on-month with software implementation = (2000-500)/500= 300%!!

Case 2:
Excel or Pen & paperSpecialized Software for Business

Leads conversion = 15%

Leads conversion rate = 20%

Number of holiday packages sold = 15% x 500 = 75

Number of holiday packages sold = 20% x 2000 = 400

Growth in holiday packages sold month-on-month with software implementation = (400-75)/75= 433%!!

For a year based on assumptions, 
Software cost = USD 12000 (costs less than 2 extra employees)
Revenue growth achieved > 4X

Added advantage
For the initial quarters, when 1 employee serves 20 leads a day with Software, you get three spare employees to focus on Contracting/Sourcing and marketing.

Bottomline
The RoI is hugely positive for a successful software implementation as elucidated by calculations above. The initial investment in terms of money and time get justified by increase in revenue and staff productivity.

Conditions
Just getting a software is not a sure-shot way of succeeding. The above figures are subject to following conditions:
  • Software implementation must have complete support of existing employees 
  • Contracting/sourcing should be done more efficiently
  • Analytics data and reports are taken seriously for creating sales strategy
  • Patience is the key to long term and self-sustaining results.

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