ROI Calculator
The ROI (Return on Investment) Calculator is a tool designed to evaluate the financial impact of implementing a business solution. It measures cost reductions, productivity improvements, revenue generation, and risk avoidance to provide a comprehensive ROI value.
Key Sections of the ROI Calculator
Cost Reduction
This section quantifies savings achieved by reducing resource utilization or task completion time.
Field Name | Description | Example Input |
Resources required for task (No. of FTEs doing this task) | Total number of Full-Time Equivalents (FTEs) required for the task. | 5 |
Average annual salary | Average yearly salary of each FTE performing the task. | $60,000 |
Time to do this task (Average % of time per person) | Proportion of time spent by an FTE on this task (as a percentage). | 50% (0.5) |
Time saved by product (% flow saves) | Percentage of time saved due to implementing the product/solution. | 40% (0.4) |
Cost of other resources (User licenses, etc.) | Additional costs incurred for resources such as software licenses. | $5,000 |
Revenue Generation
This section calculates the revenue growth driven by the solution.
Field Name | Description | Example Input |
Annual revenue/turnover | Total yearly revenue of the business. | $1,000,000 |
Revenue increases (% increase in revenue) | Percentage growth in revenue attributed to the solution. | 5% (0.05) |
Saved revenue (% revenue losses avoided) | Percentage of revenue losses avoided by implementing the solution. | 2% (0.02) |
Risk Avoidance
This section measures the financial savings from avoiding penalties and retaining revenue.
Field Name | Description | Example Input |
Annual revenue/turnover | Total yearly revenue of the business. | $1,000,000 |
Fines avoided | Monetary penalties avoided due to improved compliance or processes. | $10,000 |
Lost revenue avoided (% revenue losses avoided) | Percentage of potential revenue losses prevented. | 3% (0.03) |
Total ROI
The Total ROI combines all calculated components: cost savings, revenue generation, and risk avoidance.
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