How to Make ROI Results Credible

Return on investment is a financial term. As a result, findings need to be credible even to the most discerning stakeholder. In order to assure credibility, use at least one isolation technique and adhere to the following principles.

Guiding Principles

1. When a higher level evaluation is conducted, data must be collected at lower levels.

2. When an evaluation is planned for a higher level, the previous level of evaluation does not have to be comprehensive.

3. When collecting data and analyzing data, use only the most credible sources.

4. When analyzing data, choose the most conservative alternative for calculations.

5. At least one method must be used to isolate the effects of the engagement initiative.

6. If no improvement data are available for a population or from a specific source, it is assumed that no improvement occurred.

7. Estimates of improvements should be adjusted for potential error of the estimate.

8. Extreme data items and unsupported claims should not be used in ROI calculations.

9. Only the first year of benefits (annual) should be used in the ROI analysis of short-term initiatives.

10. Costs of the initiative should be fully loaded for ROI analysis.

11. Intangible measures are defined as measures that are purposely not converted to monetary values.

12. The results from ROI Methodology™ must be communicated to all key stakeholders.

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