A major consideration for organizations implementing new systems is the return on investment (ROI). ROI can...

1) a) Example- Tangible ROI typically takes on the traditional form of calculating ROI. For example, I will spend 100 dollars, and in a specified amount of time, I will receive 200 dollars in return. If 200 is greater than 100 and the amount of time to recovery is reasonable, then our investment would be deemed wise.

b) Example-Let’s say an employee makes $60,000 a year plus benefits of a 10% salary. The employee works a standard 40 hour week or 2,000 hours per year. We can quickly do the math and come up with an effective hourly rate of $33 per hour. Once I can calculate an employee’s effective hourly rate, I can then use it to quantify the costs associated with that employee to do almost any task. For example, if our $33/hour employee is spending six hours a month on administrative tasks such as stuffing envelopes and licking stamps, I quantify the cost of this task at $198 a month. Based on the hard dollars, I can then assess whether or not it’s the best use of the employee’s time to do administrative tasks (or whatever task I’m scrutinizing), automate the task or find a less expensive person to do it instead.

2) a) Intangible ROI Example-A local Metro Bank recently started running ‘Red Fridays’. When a customer comes into the store wearing red, they are immediately singled out and given some sort of small gift – a pen, a box of chocolates etc.

It would be a very rare occurrence that someone chose to be a member of a bank simply because they received a free pen, so where is the ROI for Metro Bank? Exposure. Tweets, Facebook posts, and general chatter around a bank that is a bit different. Being present and part of the community.

b) When a product is given free with another product there is n intngible ROI of dominnce.