Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Determining the ROI on Innovative Tech

572 views

Published on

It can be tricky to tell if it's worth investing time and resources into innovative technology . Here was talk a bit about some of the things you need to consider.

Published in: Government & Nonprofit
  • Be the first to comment

  • Be the first to like this

Determining the ROI on Innovative Tech

  1. 1. Projecting the Return on an Innovative Technology Project April 2016
  2. 2. What Projects Should You Implement? What’s worth the cost? What’s worth the cost? What IS the cost? Wait, what does “worth it” mean?
  3. 3. Return on Investment Can Help Decide Cost Your Return on Investment = Easy, right? Well, no. Benefits -
  4. 4. Not Everything Is Measurable Reduced mailing—in $$ Practically impossible to measure in $$ Easy to measure in $$ Advocate time saved—in $$ Homelessness averted—in $$ More justice created—in $$
  5. 5. Estimating Requires Assumptions You’re never going to get an exact figure. The goal is to define a PLAUSIBLE ROI.
  6. 6. It Often Requires a Chain of Assumptions
  7. 7. How Do We Get There From Here?
  8. 8. Discuss! What kind of projects are you thinking about for which a ROI analysis might apply?
  9. 9. Thinking Through Benefits
  10. 10. Cost Savings How much money can your new technology save?
  11. 11. Staff Time Saved How much time can your new technology save?
  12. 12. More Clients Served
  13. 13. Better Service
  14. 14. Outcomes Achieved
  15. 15. Increase in Justice
  16. 16. What Else?
  17. 17. Discuss! Into that chat: Every benefit you can think of—measurable, not measurable, whatever.
  18. 18. The Spectrum of Measurability
  19. 19. ROI Analysis Often Involve “Intangibles”
  20. 20. The Spectrum of Measurability What’s the difference between a “measureable benefit” and an “intangible”? It’s a fuzzy line. Reduced mailing—in $$ Practically impossible to measure in $$ Easy to measure in $$ Advocate time saved—in $$ Homelessness averted—in $$ More justice created—in $$
  21. 21. Chains of Assumptions
  22. 22. Some Benefits Can Be Measured Directly Mailing costs saved Paper and toner costs saved Decreased temp hours Increased fee for service
  23. 23. Often, You Need to Link Things Together Avg. time saved per client Hourly rate of an attorney Avg. number served per year X X Advocate time saved, In dollars
  24. 24. An Example: Lawyer Time Saved ESTIMATE the possible low and the possible high Low High 2 min. 10 min. $80/hr $80/hr 800 clients 1200 clients $2,133 $16,000 Avg. time saved per client Hourly rate of an attorney Avg. number served per year
  25. 25. This Can Be More Art Than Science This is a thought exercise to see whether going ahead with a project is a good idea.
  26. 26. Another Example: Averting Homelessness Even rough estimates can be useful Low High 15 30 5% 20% $9,000 $60,000 $12,000 $40,000 Increased number of eviction cases Likelihood that an evicted client will become homeless Cost to the state per year of a homeless person
  27. 27. At Some Point, You Stop Trying to Measure Reduced mailing—in $$ Practically impossible to measure in $$ Easy to measure in $$ Advocate time saved—in $$ Homelessness averted—in $$ More justice created—in $$ “Idecree that everythingin hereis unmeasurable!”
  28. 28. Those are Your Intangibles “In addition to these measurable costs, we get all this great intangible stuff as well!” “Is it plausible that the intangibles will make this project worthwhile?”
  29. 29. Stump Laura and John! What are some things that might be measurable? Let’s see if we can make some chains of assumptions…
  30. 30. Thinking Through Costs
  31. 31. Hardware and Software Costs What will it cost to get the tools you need?
  32. 32. Estimate Planning and Implementation
  33. 33. Costs for Defining Processes You’ll need to take the time to define rules for how to do things.
  34. 34. Consultant Costs Estimate a range of hours and an hourly wage.
  35. 35. Training Costs It doesn’t matter how much of a step forward your project is for the organization if no one knows how to use it.
  36. 36. Who should be involved in each step? How much time is it likely to take them? Cost of Other Staff Time
  37. 37. Ongoing Costs Factor in future costs to keep your project running after the first year.
  38. 38. Morale Costs
  39. 39. Opportunity Costs What else could you do if you weren’t devoting the energy to this?
  40. 40. Some of These Costs May Be Intangibles
  41. 41. Putting It Together
  42. 42. Then You Add Them All Together Low High $250 $350 $4,000 $5,000 Mailing cost saved Attorney time saved Homelessness averted $2,133 $16,000 $9,000 $60,000 Another benefit Another benefit $1,000 $1,000 $16,383 $83,250
  43. 43. And Compare to Costs Benefits Somewhere from $16K to $83K Intangibles + Costs Somewhere from $20K to $40K Intangibles + What does this mean for you?
  44. 44. This Is A Discussion Starter Benefits $16K to $25K Intangibles + Costs $30K to $40K Intangibles + Benefits $16K to $100K Intangibles + Costs $40K to $60K Intangibles +
  45. 45. What Do You Think?

×