I posted an entry on Working Smarter explaining how to calculate simple ROI in order to properly prioritize projects and get your co-workers to buy-in to new initiatives. I figured that my readers here might find this helpful; here’s an excerpt from “How to Calculate ROI:”
Return on Investment means a lot of things; it means one thing in the world of accounting, another in the world of financial investments, and it means another in the scope of project management. We’re just managers of one sort or another here at Working Smarter, and we use ROI as a figure to illustrate the costs and benefits of our projects. We find that calculating ROI helps us avoid pitfall projects, helps get our co-workers to buy-in to project ideas, and helps us prioritize how we use our resources.
However, when I do calculate ROI for a project or a new marketing initiative it can be drastically helpful for my co-workers, my boss, and the other teams within our organization who might be involved in some way, shape, or form. ROI figures help them buy into the project and help them prioritize their projects accordingly – something with an ostensibly high return on investment will be prioritized ahead of things with uncertain or perceptibly low ROI.
As always, if you have suggestions for improving it, I am always open to them. Feel free to contact me with recommendations or suggestions.
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Comments 1
You are spot on using ROI internally for buy in and prioritising. What about the intangibles though? This “feels like a better project”, we like the “brand on this”, this is the “vision”. Look to make the intangibles tangible and prove ROI on these too. Today I helped someone prove ROI on membership in a chamber of commerce in a down economy when all they thought they had to offer was “a place to meet and get moral support”. Well just supposing these people meet, they “pump each other up”, they feel better, they go and make a more confident sales pitch, because the pitch is confident they get an order. Hey presto – feel better = confident = sell more = ROI on “just getting together”, OK simple example but get the idea? Make the intangible tangible and you can measure it.
Posted 17 Mar 2009 at 3:11 pm ¶Post a Comment