One of the most important aspects of budgeting for grant management software is having a clear understanding of cost relative to value. Sticker shock can deter some organizations from software solutions that could provide positive returns over time.
ROI assessments are also especially important when vying for internal buy-in from key decision makers within the organization.
Read on for how to determine your grant management technology budget and evaluate ROI.
Determine Cost Relative to Value
When determining cost versus value, administrative costs are a great place to start. On average, we’ve found that grant management administrative tasks equate to 720 hours annually. This may include:
- Maintaining ad-hoc systems.
- Updating spreadsheets.
- Manually notifying employees of deadlines.
- Gathering data on grant performance.
That said, those that adopt grant management software reduce administrative time by an average of 72%. That’s more than 500 hours that could have been spent on revenue-generating activities.
It’s simple: organizations that minimize the unnecessary time-suck of inefficient processes have more resources for important tasks, such as winning new grants.
Calculate Administrative Time
Numbers speak louder than words. Now that you have a starting place, calculate the estimated cost (in wages) spent on administrative activities. This will help pinpoint savings potential through the adoption of grant management software.
To assess the time return, record how much time—monthly and annually—is going toward tasks such as locating documents, sending reminders, aggregating data and compiling internal/external reports. Compare this against other risk factors such as the annual loss of drawdown success, outcome evaluation services, third-party audit expenses and loss from non-renewed grants.
See below for a sample section of our grant management budgeting worksheet to help visualize this process. The full interactive version can be found on page 12 of the Grant Management Software Purchase Evaluation guide.
Set Your Grant Management Software Budget
Once you’ve evaluated your grant management workflow, time return and risk factors, you’ll have a better idea of how much you can spend on software to ensure a positive ROI for your organization.
Note that, while initial implementation and training investments may seem costly to some, the long-term savings in process improvement and reporting usually justify the expense. Use your ROI assessment to demonstrate ongoing savings and win budgets.
For further help assessing your organization’s grant management technology needs, see our comprehensive Grant Management Software Purchase Evaluation Guide.