Technology return on investment
ROI compares an estimated net benefit with the investment cost over a defined period. A percentage is only meaningful alongside its assumptions.
How it works
For year one, net benefit equals gross savings minus the initial cost and twelve months of maintenance. ROI equals net benefit divided by that total cost, times one hundred, only when the cost is supplied and positive.
Hypothetical small business example
A business can compare scenarios for recoverable time and costs before deciding whether to investigate a pilot.
Benefits and limitations
Make assumptions visible and compare options on a common basis.
Freed time is not necessarily a cash saving. Adoption, training and indirect costs can change the result.
Common question
Does positive ROI guarantee profitability?
No. Verify that time is actually recovered and put to use, then measure real costs and benefits over the same period.
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