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  • 1. Enhancing Return On
    Investment
    Akash Dolas
  • 2. By Akash Dolas
    Quality Manager - Cybage
    email: akash.dolas@gmail.com
    LinkedIn: www.linkedin.com/pub/akash-dolas-pmp-lion/7/70a/b
    Twitter: @akashdolas
  • 3. Focus of This Discussion
    • What is ROI?
    • 4. Tactical ROI
    • 5. ROI for a single initiative or application
    • 6. Identification of sources of Return
    • 7. Examination of task cost savings on a per-transaction basis
    • 8. Emotions and Financial Cycle
  • What is ROI?
    Quantifiable profits set against investment
  • 9. Some ROI Comparison Methods
    • Return as a percentage of Investment over a fixed period
    (Return / Investment) x 100
    • Return after deducting Investment for a fixed period
    (Return - Investment)
    • How long until Return equals Investment
    (Investment / Return per week)
  • 10. Identifying Costs (Investment)
  • 11. Identifying Costs (Investment)
  • 12. Identifying Sources of Return
    • Savings through shorter task time
    • 13. Savings through shorter processing time
    • 14. Savings through the prevention of “leakage”
  • A Method for Identifying Savings
    • Observe old process
    • 15. Observe new process
    • 16. Make sure to include all phases of both methods
    • 17. Measure process times for both
    • 18. Check for any statistical differences in outcome
    • 19. Measure frequency of task
    • 20. Understand fully loaded employee cost per hour
  • Old Conference Room Application
  • 21. Web Conference Room Application
  • 22. Costs and Savings
    • Costs
    3 days to develop interface
    24 hrs x $40 =$960
    • Savings
    Each reservation took 10 minutes less
    4560 non-recurring reservations first year
    760 hrs x $40 = $30,400
  • 23. ROI Calculations:
    ROI Calculations
    • Return as a percentage of Investment over a fixed period:
    (Return / Investment) x 100
    ($ 30,400 / $ 960) x 100 = 3167%
    • Return after deducting Investment for a fixed period:
    Return - Investment
    $ 30,400 - $ 960 = $ 29,440
    • How long until Return equals Investment:
    Investment / Return per week
    $960 / $585 = 1.6 weeks
  • 24. Business Card Request
  • 25. Identifying sources of return
    • Costs
    5 days to develop application and web interface
    40 hrs x $40 = $1600
    • Savings
    Each order took 10 minutes less time for routing and processing.
    One third of orders involved about 6 minutes for searching, questions, and re-submission of forms.
    743 Orders first year of application.
    148 hrs x $40 = $5920.
  • 26. ROI Calculations
    • Return as a percentage of Investment over a fixed period:
    (Return / Investment) x 100
    ($5920 / $1600) x 100 = 370%
    • Return after deducting Investment for a fixed period:
    Return - Investment
    $5920 - $1600 = $4320
    • How long until Return equals Investment:
    Investment / Return per week
    $1600 / $114 = 14 weeks
  • 27. Computer Crimes are vulnerable
    New Business Card Request
  • 28. Vacation Request
  • 29. Identifying sources of return
    • Old process was to send e-mail to department admin, who forwarded to payroll after approval
    • 30. Online approval process cut delays due to missing information, loss of e-mail
    • 31. The rest of the story…
    Discovered verbal approvals sometimes skipped process
    E-mails not always forwarded
    No reliable record of requests existed
    “Leakage” may have been as great as one day per person per year
  • 32. Costs and Savings
    • Costs
    5 days to develop application and web interface.
    40 hrs x $40 = $1600.
    • Savings
    Each request took 10 minutes less time for routing and processing.
    3218 requests in first year.
    536 hrs x $40 = $21,440.
    Estimated 5% of employees correctly reported one additional day of vacation each.
    5% x 800 employees = 40 days.
    320 hrs x $40 = $12,800.
    Total savings = $34,240.
  • 33. ROI Calculations
    • Return as a percentage of Investment over a fixed period:
    (Return / Investment) x 100
    ($34,240 / $1600) x 100 = 2140%
    • Return after deducting Investment for a fixed period:
    Return - Investment
    $34,240 - $1600 = $32,640
    • How long until Return equals Investment:
    Investment / Return per week
    $1600 / $658 = 2.4 weeks
  • 34. Emotions and Financial Cycle