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How Do You Measure ROI and Why You Should: Practical How-to Advice

By Ann Halkett posted 09-28-2022 09:59


Please enjoy this blog, posted on behalf of the author, Andrea Williams, Principal, Fides essociates Inc. 

When undertaking initiatives and new opportunities, it isn’t always possible or easy to deliver to the classic Return on Investment (ROI) formula.  While showing the profitability, or savings, that has resulted is very important, there are frequently many more results and learnings identified that have significant benefits and impact to the organization beyond the baseline ROI calculation.  It’s not a black and white world, so painting your ROI picture using more of your palette will reflect the additional dimensions.

Why is it important and valuable?

ROI evaluation will validate cost expenditure, alignment to organizational goals, attain key stakeholder advocacy, reveal hidden benefits, and identify opportunities for improvement.  Getting budget and resource allocation for an initiative is often an achievement unto itself.  Scoping, planning, and executing the initiative brings everything full circle…or does it?  Determining how the initiative will be measured, areas affected, and potential value for the organization is critical.  Typically initiating and delivering on any changes to an organization will generate ripple effects.  When the initiative is complete, ensuring you achieve closure includes determination of the initiative’s success.  It’s imperative at completion to capture and assess the outcomes prior to the focus and resources moving on to the next initiative or business need. While you may not have full span of control to throw a party and celebrate, you can ensure the achievements, impacts, and areas requiring recognition are documented, communicated, and accessible by capturing and disseminating the ROI.

When to start capturing ROI?

ROI measurement should be factored early in the planning stages, it represents an opportunity to start as you mean to continue.  ROI should be considered when tabled objectives begin to form a plan of action, your ROI measurement considerations will determine success criteria and may in fact represent a go/no in terms of project initiation.  While this may seem obvious, it isn’t always the case.  Often teams are under pressure due to circumstances beyond their control (recent rapid migrations to M365 resonate with anyone?). The “speed of business” can take over and capture of success criteria becomes an afterthought.  This does not diminish the need for these criteria; however, it will require a moment to pause and capture.  As scope may expand or contract along the way, pausing regularly to check in on objectives and key success metric alignment is critical to success.  While capturing key findings throughout the initiative is ideal, it may not always be possible while the project is in-flight, it is however, still a powerful task to undertake and can be a great collaborative project-team exercise.

ROI Considerations

Typically, there are some key criteria that are more obvious than others.  It’s important to look at the results from different perspectives.  The more dimension you identify in the desired outcomes, the better.  While data is always golden to have, it doesn’t always provide what’s needed to illustrate the full effects of the results and shine the light into the corners.

ROI Criteria Considerations:

  • Business strategy and key initiative alignment
  • Clearly articulated business objective
  • Budget and timeline tracking
  • Key Performance Indicators (KPI’s)
  • Revenue Generation & Costs Savings

Don’t overlook some of the harder ones to quantify:

  • Technology Improvements – summarize expected additional organizational key improvements
    • For example, when moving from an On-Prem technology to a SaaS-based platform: consider other “wins” relating to hardware, people resources, accessibility improvements, redundancy, security, scalability, etc.
  • Process improvements – identify potential efficiencies such as time saved, streamlined, or improved processes, increased collaboration, etc.  
    • You may not have a “number” to show for all improvements – these may be well represented in the form of before and after workflow diagrams
  • People improvements – expected increase in customer, internal team and employee satisfaction and experience
    • Capturing metrics may be challenging, generating an impact survey is a great way to capture feedback
  • Organization’s Image – consider external perception: increased competitive stance, more attractive to Clients and/or to attracting new talent
    • Illustrate the how the initiative may modernize or improve how the organization is viewed externally

How to present the ROI?

Assessing your initiative results will ideally provide your stakeholders, team, and organization with much more information and insight than are easily digestible.  Curation and dissemination of this valuable content and information to serve the greater good is an important step.  You have many options to consider.

  • Stakeholders and Senior-level Reporting – leverage this opportunity to report upwards on the completion of the initiative. Ensure you understand your audience(s) and tailor accordingly – consider creating an executive summary, a dashboard, clear summary of key takeaways.
  • Business Case or Case Study – this is a great way to memorialize the initiative and leverage the learnings. Detail the findings to justify and/or make recommendations for future projects.  This may provide the foundation needed to pitch for cascading adjacent initiatives. 
  • Continuous Improvement opportunities – capture and communicate recommendations based on outcomes.
  • Recognition Opportunities - Don’t underestimate the power of THANK YOU and recognition. So many initiatives that are critical to a business are brought to fruition by people working hard in the background – this is a great opportunity to share the spotlight with silent heroes.
  • Things didn’t go so well? It may sting, or extend the sting, however, don’t underestimate the value in the “misses”. We celebrate success and grow from our challenges.  Our ability to expose our misses helps us identify root cause and implement preventative actions moving forward.    

Measuring and sharing the ROI findings is a powerful key initiative closure activity.  By expanding your net as you capture and sharing the results, findings and recommendations is valuable in honouring the achievements of the initiative.  The dissemination can provide opportunities to create new benchmarks, a foundation for additional initiatives, and to expand others understanding / perspectives / perceptions / thinking by providing a multi-dimensional ROI summary by going beyond baseline data and results, tailored to your initiative’s successes. 

Andrea Williams
Fides essociates Inc.