Cost and return on investment

Evaluating return on investment (ROI) accompanies major business decisions. Whatever form the ROI calculation takes, its purpose is to estimate how long it will take to recoup the money invested in a project. A number of factors are involved in this calculation:

• tangible elements of immediate and recurring costs;

• tangible gains (increased margins, new services);

• intangible costs or gains (image, risk).

An ROI calculation is linked to the measurement of a gap between an existing situation and a target situation that we wish to achieve in terms of objectives. This implies detailed knowledge of the existing situation, as well as a fairly precise vision of the solutions that meet the needs expressed.

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