ROI

- HOW TO PREPARE RETURN ON INVESTMENT ASSESSMENTS TO JUSTIFY IT AND OTHER PROGRAMS

By JAVIER F. KUONG and MASP STAFF

Management is increasingly demanding that CIOs and IT personnel and anyone requesting capital investment funds justify their requests for IT and technology investments and expenditures.  The slowdown in the world economy and the pressure to be more judicious in the use of precious limited resources for IT and other areas is forcing companies to measure the profitability of any new IT ventures and initiatives.

This drive is reflected in the current literature that frequently mentions ROI as a key factor in new technologies acquisition.  CIOs, Executives and Information Technologists must actively become familiar with the terminology, methodologies and practices used to estimate the ROI of new ventures and in order to justify their new programs.

The days of justifying complex IT and other initiatives on the basis of “It is a must for the company or it is required to remain a competitive” will not be sufficient. Your proposals will be increasingly scrutinized by senior management and financial officers who are now pressed to watch over the bottom line when allocating funds and embarking on any new initiative, whether of a technology of or other nature.

This unique book provides you with the fundamentals and detailed practices for estimating the profitability of new ventures, projects or programs and enables you to arrive at and effectively present the ROI aspect of your new initiatives. The contents are explained in a simple manner for non-financial experts such as executives and technical staff who must become familiar with ROI   concepts since technology groups will increasingly be asked to articulate their proposals in ROI terms. 

This book is a must for your practitioner’s bookshelf.  The methodologies apply to any type of investment proposal.

CONTENTS                                                   ISBN  0-940706-61-X

PREFACE                                                                                  

1.     WELL-MANAGED ORGANIZATIONS DEMAND A RETURN ON THEIR INVESTMENT – ROI

Background and definitions and the need for ROI assessment for any new venture or project.  What are the soruces of tangible profits/savings or improvements come from to support the ROI?  Is it an ROI for IT technology or for the key busines process impacted?

 2.        COMPONENTS AND CONSIDERATIONS IN ROI ESTIMATION

The key elements involved in ROI assessment are discussed including the value of considering both “tangible” and “intangible” benefits.

 3.     APPROACHES FOR DEVELOPING RETURN ON THE INVESTMENT

This chapter discusses the various approaches that have been used to justify projects and estimate the ROI, including, internal rate or return, rate of return, payout time, Rapid Economic Justification (RJE), Scenario method, etc., as well as their inherent advantages and limitations.

4.     ROI METHODOLOGIES AND HOW TO APPLY THEM

The most commonly used methodologies for calculating ROI are described in detail.  

5.     ILLUSTRATION OF ROI ESTIMATION BY VARIOUS METHODS

This chapter illustrates in detail the use of the ROI methodologies with actual examples from the real world.

APPENDIX

A.      Literature References

B.     Glossary of Terms

C.   Index

PRICE: $150  plus $10 postage and handling in North America - $175 Europe - $185 Australasia and other, including air post.    8 1/2 x 11 format - Ring bound.   148 pages.

FOR MORE DETAILED TABLE OF CONTENTS CLICK HERE

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HERE IS WHAT SOME EXPERTS COMMENT ABOUT ORGANIZATIONS AND INDIVIDUALS THAT REFUSE TO ENGAGE IN ROI ASSESSMENTS TO JUSTIFY THEIR INVESTMENT INITIATIVES:

  • Some IT organizational cultures resist establishing rigorous metrics supporting the ROI of an IT investment. I have heard people argue that an investment is just "the cost of doing business" or, even worse, that it's "strategic" and can't be measured. On closer examination, organizations that exhibit this behavior don't have a culture of accountability. 

John Hill, Praxair

MASP also offers a practical worshop that guides you through actual examples to help you prepare your ROI using a case of current interest to you in your work.  This two-day seminar is offered in several main cities in the US.  It can be also conducted overseas in-house or in public offerings under sponsorship by companies or training inmstitutes.  Click below for details.

"ROI - How To Justify Information Technology (IT) and Other Programs Via ROI" - Course IT-77

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