Blog Archives

Let’s Consider Time: Net Present Value (NPV)

As I mentioned in my prior post, the traditional ROI formula does not consider time. But in weighing the costs and benefits of a project, we must take into account the fact that neither costs nor benefits materialize instantaneously, each

Posted in Business Case Analysis, NPV, Project Selection, ROI

The Formula for ROI, Just a Little too Simple

Recently, I reviewed a book on calculating ROI, but today I’d like to call into question this iconic phrase. The formula for calculating Return on Investment (ROI) could hardly be simpler. Just subtract the cost from the gain and divide

Posted in Business Case Analysis, Project Selection, ROI

Calculating ROI: A Review of Show Me the Money

I hear the term ROI often enough but rarely see it calculated. It is said that business is all about numbers– financial statements, stock prices, bonus plans–but then there are IT projects, with budgets that are clear enough (or at

Posted in Book Review, ROI