7 ROI: WHAT IT IS AND WHY YOU NEED TO SHOW IT
Let’s say you’re an IT manager and you want the board to approve a significant IT investment. What is very important to you – the problems the investment will solve and the opportunities it will create – might not be very important to the board unless you can demonstrate the business benefits. More often than not, that means speaking the language of money – and in particular, return on investment, or ROI for short. If you can demonstrate an acceptable ROI, you’re much more likely to get the investment you need.
ROI can be a very simple calculation. First of all, you estimate how much the proposed change will cost. Then you estimate the financial benefit it will bring. Deduct the cost ...