Return On Investment - ROI Definition. Calculation of Return on Investment (ROI) is the basis for making investment decisions. Calculation of ROI is used by IT suppliers and users to determine the financial benefits of the implementation of IT solution. IT suppliers and users calculate Return on Investment for receiving benefits of ROI.
The Return on Investment has some financial indicators: the metric of ROI (ratio of profit from investments to the number of investments), indicator NVP (Net present value), payback period and IRR (Internal Rate of Return).
How to calculate Return on Investment of IT solutions? ROI4CIO has an online tool for calculation of the Rate of Return on Investment. It is an ROI calculator. ROI4CIO uses a software algorithm of selection of the configuration to calculate the cost of IT solution depending on the user parameters, time of forecasting, a risk of models and implementation, operating costs and initial costs. The program calculates the financial flows of the implementation of IT solutions, taking into account the individual IT solution/product characteristics for each individual customer.
ROI-calculator provides a histogram of financial flows and calculates Return on Investment and other financial indicators: the payback period, NVP, IRR.
How to make ROI Calculator for your IT products/services/solutions? ROI4CIO allows making on-line ROI-calculator for your potential customers and partners. You can set the cost of IT products included in the solution, but they are often dependent on a user. ROI4CIO offers a software algorithm to input pricing and for selection the configuration of products and services. You can input the price lists from Excel files with tables and set the algorithm of selection of configuration and counting the price of a product/service, depending on the user parameters. Entering the user parameters can be set in the form of a questionnaire.
ROI-calculator on ROI4CIO allows selecting one of the models of benefit and its dependence on the number of users and time. There are 4 models of benefit: the acceleration of the timing of the profit, reducing of idle time of resources, cost reduction or risk reduction of possible losses, obtaining additional profits.
What is a good Return on Investment? As a rule of thumb that it is necessary to choose projects with the highest ROI percentage (High Return on Investment). The each case is individual. Sometimes it is more important to consider the payback period, other times internal rate of return or the present value. ROI-calculator calculates all these parameters and takes into account the risks and internal discount rate.
Remember, that the IT solution can be compared not only in quantitative terms (financial, profit ROI), but also in terms of quality. On ROI4CIO You can learn about the problems and challenges solved by implementation of IT solutions, and what are the results and reviews of companies that have already implemented IT solution.
Compare IT solutions on ROI4CIO. Use ROI-calculator to simplify the calculation of ROI. Learn the examples of the implementation in other companies. Take a useful investment decision based on ROI index. Grow your business!