This quarter we’ve been focusing on technology management at nonprofits.  If you missed our previous webinar on building an IT department you can find the links here, and check out our upcoming webinar on planning and IT project management August 25th.
A question that comes up time and again is “what is ROI (Return On Investment), and how can I best measure it?” Beyond that, how does my organization recognize the many tangible, financial, and intangible benefits to better justify IT projects that often seem to be costly both in time and budget?  Can we use ROI projections to help our decision making process on those investments up front?  Is ROI more than just an educated guess?
I’d like to share this article from our friend Peter Campbell, first published over on TechSoup and on his excellent blog TechCafeteria.
Peter says “investing in technology should not be a gamble, in as much as you can predict what it will do for you. … ROI is not a strictly financial formula. Actual ROI is based on many factors, including hard-to-quantify things such as organizational culture, training, and readiness for adoption. The benefits of a major tech investment are proportional to the readiness of your particular organization.”
Key to Peter’s framework in thinking about ROI are four questions, which we use at Community IT Innovators also.

  1. identify the business need and develop metrics to let you measure the ways the investment will meet this need
  2. consider staffing changes needed to implement the investment
  3. get board and executive buy in and support
  4. understand the training necessary to support the investment

When you take all those factors into account you can better develop an ROI formula that will guide your investment decision.  I hope this article and resources will help you understand and consider ROI in your next IT project management.