This book addresses two closely related issues: capturing the costs of a particular project using a fully loaded cost profile and comparing those costs to the monetary benefits to develop the actual ROI. These are two essential steps for ultimate accountabilitycosts compared to benefits. Often there is some confusion over which costs to capture for the calculation and whether particular costs should be prorated or allocated entirely to a project. This book explores those issues and many others. Cost accumulation sheets are provided and a variety of costing examples will be included along with specific rules for allocating costs for initial assessment, development, and software. The cost total is compared to the monetary benefits using three approaches: the ROI as a percent, the benefit-cost ratio, and the payback period, representing the number of years and months it will take to cover the costs of the project. These three common ways to reflect ROI are presented with examples. Coverage includes: The Importance of Reporting Costs The Essential Cost Items Prorating Costs Estimating Costs Examples Cautions When Reporting Costs The Importance of Calculating ROI When to Use ROI The Different Types of ROI Calculations ROI and Its Meaning Cautions When Using ROI
Book Details:
- Author: Jack J. Phillips
- ISBN: 9780787987213
- Year Published: 2008
- Pages: 176
- BISAC: BUS066000, BUSINESS & ECONOMICS/Training
About the Book and Topic:
This book addresses two closely related issues: capturing the costs of a particular project using a fully loaded cost profile and comparing those costs to the monetary benefits to develop the actual ROI. These are two essential steps for ultimate accountabilitycosts compared to benefits. Often there is some confusion over which costs to capture for the calculation and whether particular costs should be prorated or allocated entirely to a project. This book explores those issues and many others. Cost accumulation sheets are provided and a variety of costing examples will be included along with specific rules for allocating costs for initial assessment, development, and software. The cost total is compared to the monetary benefits using three approaches: the ROI as a percent, the benefit-cost ratio, and the payback period, representing the number of years and months it will take to cover the costs of the project. These three common ways to reflect ROI are presented with examples. Coverage includes: The Importance of Reporting Costs The Essential Cost Items Prorating Costs Estimating Costs Examples Cautions When Reporting Costs The Importance of Calculating ROI When to Use ROI The Different Types of ROI Calculations ROI and Its Meaning Cautions When Using ROI
Because of the confusion about which cost categories to use and how to prorate certain cost items, there is a need for a definitive work in this important area. Checklists, shortcuts, estimates, and rules of thumb are needed to tackle this step in an efficient way. The second part of this book addresses what can sometimes be the most controversial measure of allthe ROI. Many researchers and far too many practitioners have misunderstood the ROI calculation and what it means. There is a need for a book not only to show how the calculation is developed but also to show how it should be interpreted and used along with other data sets. This book will meet these important needs.
Fully Loaded Toolchest. This book provides many checklists and tools that can be populated with organizational data to capture the costs of a program. It also contains many practical guidelines, tips, and shortcut ways of estimating costs as well as a variety of examples of actual calculations that can easily be replicated in an organization. Costing Projects. Addresses the critical issue of costing projects, which is becoming more important and under increased scrutiny. The ROI calculationthe holy grail for evaluationis perhaps the strongest selling point as it shows how the calculations are actually developed. Step-by-Step Guidance. Almost every professional wants to know how to plug data into the formula, how to develop the actual numbers, and to understand what the number means in the real world. This book shows how. ROI Institute Connection. The leaders in measurement and ROI research, pedagogy, tools, case studies, and programs, the ROI Institute has delivered workshops to more than 25,000 training professionals — offered in almost every major international city. Routine offerings of one- and two-day workshops sponsored by ASTD and other organizations and are offered about 40 times per year by the Institute. The Series will be an indispensable tool to support ROI Institute workshops, certification programs, and as handouts on particular topics and aggressively marketed and promoted by the Institute and its partners.
About the Author
Dr. Jack J. Phillips is chairman of the ROI Institute. A world-renowned expert on measurement and evaluation, Phillips provides consulting services for Fortune 500 companies and workshops for major conference providers throughout the world. Phillips is also the author or editor of more than 30 books and more than 100 articles. His expertise in measurement and evaluation is based on more than 27 years of corporate experience in five industries. Phillips has served as training and development manager at two Fortune 500 firms, senior HR officer at two firms, president of a regional federal savings bank, and management professor at a major state university. The ROI Institute, Inc. is a benchmarking, research, information sharing organization that provides consulting services, workshops, and certification in the ROI methodology. Widely considered leading authorities on evaluation and measurement of learning and development in organizations, the Institute annually conducts workshops and offers certifications for thousands of practitioners through a variety of strategic partners, including ASTD, Bloom, Knowledge Advisors, Meeting Professionals International, SAP Education, University Alliance, Worldwide Association of Business Coaches, and more than 25 international partners. The Institutes main office is in Chelsea, AL.