The Building Blocks of ROI

Financial intelligence is all about understanding how the financial side of business works and how financial decisions are made. The principles discussed in this chapter are the foundation of how some decisions—those relating to capital investment—are made in corporate America.

Return on investment (ROI) analysis is—or should be—the foundation of every major IT project. But measuring the return from an IT project can be tricky. How do you quantify the bottom-line impact of faster customer service, say, in your company’s online store? If customers get their products faster because of a better shipping system, how do you quantify the resulting increase in customer loyalty? To be sure, other outcomes of IT projects ...

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