Do you understand why Return on Investment (ROI) should affect decision making?

An important part of communication is to improve the Product Owner's understanding of ROI and help them make good decisions. When you are actioning a task, it's crucial to value your time and think about how much manual time it may consume over a longer period, say a year. You can then go the extra step and quantify this $ cost.

Vide: Do you understand how Return on Investment (ROI) can affect decision making? (5 min)

If you find out that another solution would be better, then you should clearly communicate that to the Product Owner.

In the software world to calculate ROI we take a PBI and do Business Value ÷ Effort

If the Product Owner still disagrees with you then it may be a good idea to send a 'For the record' email.


From:	Piers
To:	Bob Northwind
Subject:	Email signature - not working

Hi Bob

Done - I have fixed the email signature by changing the file server's HTML and it took me 1 hour.

Thanks!

Piers

Figure: Bad Example - ROI was not mentioned


From:	Piers
To:	Bob Northwind
Subject:	Email signature - not working

Hi Bob

Done - I have fixed the email signature by changing the file server's HTML and it took me 1 hour.

ROI Consideration - As per our conversation, I have to make these changes every month for 12 users. Therefore, for future changes to email signatures, let's wait until I implement the new 3rd party solution I am working on. This will give better ROI because I won't need to do any further wasted work.

Thanks!

Piers

Figure: OK Example - ROI is mentioned


From:	Piers
To:	Bob Northwind
Subject:	Email signature - not working

Hi Bob

Done - I have fixed the email signature by changing the file server's HTML and it took me 1 hour.

...but I will have to do it for each of our 12 users once a month.

The choices:

Option A - Continue manually adding each email signature, every month.

Maintenance: SysAdmin x 12 hours x $200/hr = $2,400 per month
Total cost = $28,800 per year

Option B (recommended) - Purchase and configure an email signature system.

Configure: SysAdmin x 16 hours x $200/hr = $3,200 flat fee
License: 1 License fee x $2,000 = $2,000 flat fee
Total cost = $5,200 flat fee

Thanks!

Piers

Figure: Good Example - ROI is mentioned and quantified

Note: If fixing the email signatures had been a huge task then it would have been better for Piers to have a conversation with Bob before he implemented the fix.