ROI
ROI
Return on Investment (ROI) is a vital performance statistic. It is used to assess an investments efficacy and efficiency. ROI refers to the financial gain or advantage achieved by a certain investment or activity as compared to its initial cost in an organizational environment.
Breakdown of ROI
- Return: This can be any benefit gained from the investment, such as financial gains, improved performance, or enhanced competitiveness.
- Investment: This can be any resource invested by an organization, such as financial resources, human resources, or physical resources.
ROI benefits
- Improved decision-making about resource allocation Increased accountability of individuals and departments
- Enhanced performance by focusing on activities with the highest ROI
- Improved communication and alignment by discussing and communicating ROI metrics