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The Tech Leadership Academy is made possible by generous funding from Microsoft Community Affairs Evaluation: Technology ROI Beth KanterCEO Zoetica and Co-Author, Networked Nonprofit These materials are available under the Creative Commons Attribution-NonCommercial 3.0 License.
Understanding how to apply an ROI process to technology decision-making with help your organization avoid making mistakes and save valuable time and resources. These materials are available under the Creative Commons Attribution-NonCommercial 3.0 License.
Understand the importance of evaluation in successfully managing technology
Provide a methodology for analyzing the return on investment of technology that includes both quantitative and qualitative outcomes
These materials are available under the Creative Commons Attribution-NonCommercial 3.0 License.
Objective 1Understand the importance of evaluation in successfully managing technology :
A successful ROI process is …
What: Return on Investment An analysis that looks at the benefits, costs, and value of a technology initiative over time.
Simple and Economical
Micro versus Macro
Considers more than just direct costs
When is ROI used? When should an ROI approach be used?
Future Investing in a Video Conferencing System
Laptops and Internet Access Past
How much time will staff members save with laptops? How does access to technology and information improve services to client? Laptop Project Pilot
Cost of travel time from monthly time sheet Mileage # Trips Needed w/out laptop # Trips Needed w/laptop Value of Shifted Time
Use ROI if….. Long Life Cycle Mission Critical Linked to Strategic Goals Large Investment Visible or Controversial Large Target Audience And ….
How much does it cost? Can we afford it?
Discussion: Do these principles make sense? Why or why not? Anything missing from the list? Is there a time when you didn’t follow one of the principles? What happened? What did you learn from it? What are some ways that you have applied these principles to your own ROI work?
Objective 2: Provide a methodology for analyzing the return on investment of technology that includes both quantitative and qualitative outcomes
Benefits Value Costs THE ROI PUZZLE The Rubrics Cube of ROI
Benefits Benefits Efficiency Effectiveness
Efficiency Improves the ability to maintain a system Eliminates duplicate systems Accommodates increases in workload or demand without additional costs Reduces manual operations Improves efficiency Reduces Travel Cost/Time
Improves ability to deliver Improves access to services Improves access to information Improves accuracy Improves effectiveness of information delivered Effectiveness
Tangible Benefits Tangible Benefits
Easy to Quantify Easy to assign money values
We can save $25,000! I like that! Tangible Benefits
Keep in Mind List all benefits regardless of whether or not they initially appear difficult to support or quantify
ConversionTest 1. Does an acceptable, standard metric exist for the measure? 2. Can the conversion be accomplished with minimum resources? 3. Can the conversion process be described to an executive director and secure their buy-in in five minutes?
“Anything can be measured in a way that is superior to not measuring it at all“
Can you Quantify Love?
ROI by the Numbers
You may need to collect data …
Staff Surveys Staff Interviews Client surveys Clients Interviews Data from system Task Analysis Times Sheet Analysis Articles Field research Observation Secondary research reports Benchmark studies Budget and Financial Analysis
Prioritize what data you need Understand what type of data decision-makers respond to
Now comes the calculations …
Compare the total costs
of different solutions
Compare the total costs
with the benefits
Compare the costs
of not doing the project
Identify pilot goal to identifycost/benefit
CRM System Source: Steve Heye, YMCA National Software ROI Spreadsheet
C Communicating Results
ROI Storytelling Techniques
Don’t show all, but have it ready
What happens if ROI is negative?
Understand how to apply ROI evaluation method. several different common situations
The Perils of Paul, Peter, and Pauline: How will you save them with ROI?
Episode #1: Save Paul From the Hammer
Walter, you should get iPhones for all your staff
Let’s get all the attorneys iPhones!
That’s dumbest thing I ever heard …
They will end up in the blender!
TYPE IT INTO THE CHAT … How can Paul use ROI techniques to make a better decision?
Episode #2: Lost in Translation
He’d waste less time scrolling …..
I need a magnifying glass to see read this on the screen! Why can’t this spreadsheet fit on the screen!
The monitors we have aren’t broken, why fix them? We can’t afford it!
Type into Chat How can Peter convince his boss using ROI techniques?
Scenario #3: No Buy-In
I better copy those papers now while no is using the copy machine …
The copy machine isn’t working! Crap I have a deadline!
I can’t find the staff’s performance review from last quarter ..
I’m going to design and spec out an Intranet!
For that money we could hire more staff!
How can Pauline use ROI analysis to get buy-in from Boss and others? Type into chat
Summary Focus on benefits, not features Resist fondling the hammer Don’t ignore intangibles Use ROI Story Telling techniques Compare costs of alternatives, cost/benefit, and cost of not doing Pilot project to get credible numbers Collect the data you need Use ROI to drive change/buy-in, if needed