ROI (Return on Investment)
Acronyms and Abbreviations
A measure of the profitability of an investment, indicating the return relative to its cost. In design, ROI is used to assess the impact and effectiveness of design projects.
In practice
Throughout the project lifecycle and post-implementation, business stakeholders and project managers evaluate the financial gains or losses related to the project investment. Assessing the project's profitability, making informed decisions, and demonstrating the project's overall value to stakeholders are the key objectives of Return on Investment (ROI) analysis, aiding in prioritizing projects, allocating resources effectively, and ensuring that design efforts contribute to the organization's financial success.
Questions
What is ROI (Return on Investment)?
Return on investment is the measure of what an activity produced relative to what it cost, expressed as a ratio or percentage.
Why do you use ROI (Return on Investment)?
Design work is funded by people who need to justify the spend. Being able to express the return in their terms is how design keeps its budget.
How do you use/apply ROI (Return on Investment)?
Establish the baseline, isolate the change, and measure over a period long enough to be meaningful. Be honest about attribution.
When do you use ROI (Return on Investment)?
When making the case for investment, and after, to check it was justified.
Who uses ROI (Return on Investment)?
Product and business leadership, with design leads who want to be believed.
