Return on Investment

Value Made Visible

CIO Magazine: According to this article about measuring the benefits of information technology projects "...valuation approaches share a few basic tenets: They aim to forge and enforce an alignment between the IT function and business strategy; they require all parties to articulate what their goals and expectations are for a given IT project (or for the function as a whole); and they seek to help business executives map out a clear hierarchy of priorities." The articles describes several valuation methodologies. (2001-01-07)

Where is the ROI in CRM?

There are two ways to justify an investment in customer relationship management (CRM) – increase revenues or reduce costs. Costs can only be reduced so much, but that is generally where most people focus their attention because it is easier to quantify. The really large paybacks in CRM will occur from increasing the revenues of the organization – which some people also refer to as top-line growth. When reduced to the simplest terms, increasing revenues and profits can only be derived from three sources – better customer management, targeted selling efforts and focused customer retention. (2001-02-04)

The Beauty of Performance Measurement

To apply any selection strategy correctly, you must begin with that which you are trying to predict - performance. This article describes some performance measurement research we conducted for the Division of Child Support Enforcement (CSE) in Georgia. Performance measurement begins with understanding the organization's mission and strategic objectives. Therefore, take steps to clarify and understand the organization's mission, strategic plan, and strategic objectives. Use these to develop strategic measures to determine whether the objectives - the results your organization is trying to achieve - are being accomplished. Focus on efficiency, effectiveness, outcomes, and results. Do not worry about input and process measures unless the other types of measures are impossible to obtain. (2001-05-06)

Metrics Guide For Knowledge Management Initiatives

MetaKM: This guide presents a practical framework for measuring the value of investments in knowledge management initiatives. Since the value of KM depends on each organization’s goals and people, it is not a “cook book” of standard procedures but rather an aid to help you identify and apply appropriate metrics for your initiative. This guide describes several types of metrics that have been effectively used in previous KM and other business projects along with suggested applications. (2001-07-29)

Measuring the Dollar Value of Intranets

Measuring the ROI value of a corporate intranet and portal is an imperfect science at best. In fact, many analysts contend that precise ROI measurement is not possible due to the expansive and far reaching nature of intranets. However, while measuring the precise return on investment may not be possible for most, there are means by which many organizations do quantify both potential and existing ROI. Generally speaking, intranet ROI can be lumped into one of two broad categories: cost savings/cost avoidance, or increased revenue. And while increased revenue should not be discounted, the most obvious and visible area is cost savings/cost avoidance. (2001-04-29)

Plumtree ROI Resources

This page contains links to a white paper and spreadsheets that can be used to help calculate the ROI of a corporate portal. (2001-06-24)

Justifying user centred design: Calculating cost benefits

This page and the downloadable word document "explains how to calculate the cost-benefits of user centred design, by comparing the costs with an estimate of the potential benefits to the organisation during development, sales, use and support." (2001-02-25)

Usability Testing of Documentation has Many Benefits of Unknown Value

STC Usability Newsletter: This article reports on a study that: "...failed in its intent to document a persuasive ROI that could be used to convince otherwise unwilling management to initiate usability studies. The study instead turned up the disappointing fact that technical communicators simply aren’t keeping track of the essential figures. There were, however, promising clues that the impact of usability testing of documentation may be enormous if it could be quantified." (2001-04-29)

If You Need a Million Bucks...You Gotta Know Your ROI

Brandon Hall. This short article published in 1997 shows an example of the calculation of the ROI for a CBT training system. (2001-04-29)

Assessing the ROI of training

In this article, Clive Shepherd argues the case for return on investment (ROI) as a primary tool for forecasting and evaluating the benefits of training and explains the steps involved in conducting an ROI analysis. (2000-08-20)

Measuring the ROI of Training

CIO Magazine: While measuring the ROI of training won't fix all of an organization's training and budget problems, it is a powerful tool that should be in every CIO's toolkit. It is an important part of being accountable for your own training budget and for gauging its effectiveness. By finding out how much the IT department is spending on training and then measuring the benefits, both hard and soft, a CIO can not only free up money for other uses, but he can also ensure that the programs are in line with the company's overall strategy. (2001-02-18)

The Fallacy of ROI Calculations

Daniel R. Tobin: If you want your training to group to be valued by organizational leaders, you must start and end all of your efforts by focusing on the organization's goals. I have devised an instrument that I call a "learning contract" to guide you through this process. The learning contract can be used at the level of the individual employee, but my focus here is on how to use it to guide the training group's efforts as a whole. (2001-02-25)

Internet Times Group White Papers

This page contains links to various articles and white papers on determining the value of human capital and the ROI of e-learning and training. (2001-04-08)

Calculating the ROI of WBT

This PDF file contains a PowerPoint presentation by William Horton Consulting. It contains step by step instructions for calculating the return on investment for a web-based and instructor let training cost.

Many Happy Returns: Calculating E-Learning ROI

Learning Circuits: E-learning may be the wave that carries the future of corporate training. But if that wave is ever to crest, corporations must be able to determine a financial return on their investment. Only if early adopters can truly demonstrate an ROI in dollar figures will e-learning wash over corporate culture and change its landscape. (2001-06-24)

Evaluating a Performance Support Environment for Knowledge Workers

This article describes five basic techniques for evaluating the cost benefit of a performance support system. (Oct-18-98)

Cost-Justifying Electronic Performance Support Systems

Communications of the ACM: This is a large PDF file. This articles reports on the potential ROI of an EPSS. The study used a prototype version of a performance support component of a customer service system. They authors calculate only the potential training cost savings based on a 50% (best-case), 30%(expected) and 20% reduction in training time. While novice users where much more successful with the EPSS prototype, the calculated reduction of training costs resulted in break points ranging from 1.1 to 18.2 years. This is a very useful article. It shows the ROI calculations and discusses the difficulty of measuring the other possible benefits of a performance support system. (2001-03-18)

The Excellent Intranet Cost Analyzer

There is a cost to not finding information. Although it's impossible to measure the exact cost of employees not finding information on a company's intranet, this calculator gives a ballpark figure. (2000-02-20)

Intranet Cost - Benefit Spreadsheet

Fastrak Consulting: Scroll down the page the link to the spreadsheet file is near the bottom of the page.

Performance Support Project Estimator

Telcordia Technologies has developed an expert tool to help you estimate the total costs of developing your performance improvement and learning solutions. Estimator is an Electronic Performance Support System (EPSS) software tool (CD ROM) that provides a consistent methodology for the creation of estimates and project budgets for performance support and learning products. (2000-03-19)

ROI spreadsheet for professional services automation (PSA) software

PSA is an umbrella term for packaged applications that support the core business processes of professional services organizations (PSOs) to more efficiently utilize people. PSOs include IT-related functions (IT consulting firms, internal IT departments, and IT services organizations within ISVs), as well as management consulting, architecture/engineering/construction (A/E/C), legal, accounting and finance, media, government, and other service-oriented markets. The core business processes managed by PSA solutions include Customer Relationship Management; Opportunity Management, Resource, Engagement, Project, and Practice Management; Time and Expense Management; Partner Relationship Management; Collaboration Management; Knowledge Management; and Business Intelligence. (2001-03-25)

Advisor - Media Selection and Return on Investment (ROI) Tool

This is a decision support tool. It analyzes a course to determine the most economical blend of delivery methods (including instructor-led, print, tapes, computer based training, web based training, electronic performance support tools, audio/computer/video conferencing, Internet and others) that will meet your training needs. Advisor enables you to explore the possibilities of eLearning, distance learning and computer based training over traditional classroom training approaches. The results are presented in easy to follow reports to document and justify your decision, as well as charts to communicate results to others. (2001-05-27)

Estimating costs for a knowledge product

This Excel spreadsheet from William Horton Consulting lets you calculate the cost of developing a knowledge products such as a training course, CBT or WBT. The spreadsheet lets you capture the details of the development costs including needs analysis and subject matter research. (2001-06-10)

Estimating ROI for a Web-based training course

This is an Excel spreadsheet from Willaim Horton Consulting lets you compares the cost of instructor delivered and web based training. It includes a 5 year cost project chart and the ability to record soft cost, share costs and lost opportunity costs. (2001-06-10)

ROInet Discussion Forum

ROInet is created for HRD professionals interested in assessing and evaluating the effectiveness of training and development and HRD efforts and interventions, measuring return on investment (ROI) in HR development, Organization Development, e-Learning, EPSS, Knowledge Management. Additional objectives of ROInet also include skills and performance assessment and approaches for intellectual capital valuation.

A Fresh Look at ROI

Return-on-investment isn't what it used to be. This traditional financial measure, developed by DuPont and once credited with making General Motors manageable, hasn't kept pace with the times. The R is no longer the famous bottom line and the I is more likely a subscription fee than a one-time payment.

Web Analytics: Exciting Times Ahead

Last month, I encouraged marketers to take the next step in Web analytics -- and you came through. The last few weeks have been a virtual head spin of activity in the Web analytics industry. All of it is pretty good news for the future of online profits, and the art and science of improving site effectiveness with analytics.

The Next Step: The Web Analytics Association

My objective was always to get people to realize Web analytics solutions are valuable and to start them measuring. Now, many people understand the value of measurement. The bigger challenge marketers face is determining what to do with all those measurements.

Thank You For Your Order. Now, Leave!

Brick-and-mortar stores are traditionally designed to move people toward the exit when they check out. Progressive stores, however, are moving their cash registers closer to the store interior, because they realize customers will leave when they want to. There's no need to push them out the door.