Projecting the Return on an Innovative Technology Project

April 2016

What Projects Should You Implement?

What’s worth the

cost?

What’s worth the

cost?

What IS the cost?

Wait, what does

“worth it” mean?

Return on Investment Can Help Decide

CostYour

Return on

Investment

=

Easy, right? Well, no.

Benefits -

Not Everything Is Measurable

Reduced mailing—in $$

Practically impossible to measure in $$

Easy to measure in $$

Advocate time saved—

in $$

Homelessness averted—in $

$

More justice created—in $

$

Estimating Requires Assumptions

You’re never going to get an exact figure. The goal is to define a PLAUSIBLE ROI.

It Often Requires a Chain of Assumptions

How Do We Get There From Here?

Discuss!

What kind of projects are you thinking about for which

a ROI analysis might apply?

Thinking Through Benefits

Cost SavingsHow much money can your new technology save?

Staff Time Saved

How much time can your new technology save?

More Clients Served

Better Service

Outcomes Achieved

Increase in Justice

What Else?

Discuss!

Into that chat: Every benefit you can think

of—measurable, not measurable, whatever.

The Spectrum of Measurability

ROI Analysis Often Involve “Intangibles”

The Spectrum of Measurability

What’s the difference between a “measureable benefit” and an “intangible”? It’s a fuzzy line.

Reduced mailing—in $$

Practically impossible to measure in $$

Easy to measure in $$

Advocate time saved—

in $$

Homelessness averted—in $

$

More justice created—in $

$

Chains of Assumptions

Some Benefits Can Be Measured Directly

Mailing costs saved

Paper and toner costs

saved

Decreased temp hours

Increased fee for service

Often, You Need to Link Things Together

Avg. time saved per clientHourly rate of an attorney

Avg. number served per yearX

X

Advocate time saved, In dollars

An Example: Lawyer Time Saved

ESTIMATE the possible low and the possible high

Low High2 min. 10 min.$80/hr $80/hr

800 clients 1200 clients

$2,133 $16,000

Avg. time saved per client

Hourly rate of an attorneyAvg. number served per year

This Can Be More Art Than Science

This is a thought exercise to see whether going ahead with

a project is a good idea.

Another Example: Averting Homelessness

Even rough estimates can be useful

Low High15 305% 20%

$9,000 $60,000

$12,000 $40,000

Increased number of eviction casesLikelihood that an evicted client will become homeless

Cost to the state per year of a homeless person

At Some Point, You Stop Trying to Measure

Reduced mailing—in $$

Practically impossible to measure in $$

Easy to measure in $$

Advocate time saved—

in $$

Homelessness averted—in $

$

More justice created—in $

$

“I decree that everything in

here is unmeasurable!”

Those are Your Intangibles

“In addition to these measurable costs, we

get all this great intangible stuff as well!”

“Is it plausible that the

intangibles will make this project

worthwhile?”

Stump Laura and John!

What are some things that might be measurable?

Let’s see if we can make some chains of assumptions…

Thinking Through Costs

Hardware and Software Costs

What will it cost to get the tools you need?

Estimate Planning and Implementation

Costs for Defining Processes

You’ll need to take the time to define rules for how to do things.

Consultant Costs

Estimate a range of hours and an hourly wage.

Training Costs

It doesn’t matter how much of a step forward your project is for the organization if no one knows how to use it.

Who should be involved in each step? How much time is it likely to take them?

Cost of Other Staff Time

Ongoing Costs

Factor in future costs to keep your project running after the first year.

Morale Costs

Opportunity Costs

What else could you do if you weren’t devoting the energy to this?

Some of These Costs May Be Intangibles

Putting It Together

Then You Add Them All Together

Low High$250 $350

$4,000 $5,000

Mailing cost saved

Attorney time savedHomelessness averted

$2,133 $16,000

$9,000 $60,000Another benefit

Another benefit $1,000 $1,000$16,383 $83,250

And Compare to Costs

BenefitsSomewhere

from $16K to $83K

Intangibles+

CostsSomewhere

from $20K to $40K

Intangibles+

What does this mean for you?

This Is A Discussion Starter

Benefits$16K to $25K

Intangibles+

Costs$30K to $40K

Intangibles+

Benefits$16K to $100K

Intangibles+

Costs$40K to $60K

Intangibles+

What Do You Think?