Take it step by step

The mathematics involved in calculating Return on Investment are simple enough. The biggest challenges lie in the process itself. Gwen Berthiez offers some best practice tips to help you plan a successful ROI project

1 During the planning process, be very certain of what the training project’s end objectives are. Ask yourself – and, more importantly, ask the project sponsor – the following questions:

• Exactly what do you want to accomplish?


• What would success look like at the conclusion of this project?


• What are the expected deliverables?


• What would have been accomplished for you to say, "The project has been a success, now let’s talk about the next one?"

Decide whether or not you can actually deliver

2 Can you handle the request? Do you have the expertise or do you know where to find it? Are the parameters reasonable yet challenging? Numbers can very quickly get out of hand. However it is important to carefully consider whether or not the scope is realistic to achieve. In determining the feasibility of meeting a request take your time and think through each step carefully. Do not give managers unrealistic expectations about how quickly you can provide useful ROI data to them. Be careful and thorough – you will need to get it right in order to secure funding for subsequent projects.

3 If this is your first ROI project, as you begin selecting a viable project, try to think small If you don’t, unanticipated challenges will almost immediately present themselves. Limit your scope to an arena that is 100 per cent within your control or that of the project sponsor. Select a manageable project that is almost guaranteed to be successful and provide good, solid results on which you can build subsequent projects. Consider keeping the project as low-key as possible. Early unwanted publicity may force you to share inconclusive and immature data, resulting in project derailment or even cancellation. Though critics are an important part of the road to success, make certain that you chose the time and place to engage with them.

4 An ROI project is rarely a unilateral activity. As the project scope is fully determined, it will become evident that a number of people and functions will have to be involved to a lesser or greater degree. What data will you be allowed to access? Is any of it confidential and to which functions? Is the head of the function that houses the data a supporter of yours and of the ROI project? How can you sell the idea to the holder of the data and how can that individual use it to further functional or company objectives?

You will also need to find out whether or not you have ready access to the data with which you will need to compare your ROI results – such as departmental numbers and highly proprietary company statistics. Not all pertinent data is to be found in the company annual report. Check this aspect out thoroughly before launching into the ROI project. You might be surprised to find how difficult it is to obtain some of the meaningful numbers, ratios and percentages you need.

5 This is all part of successfully "managing" the ROI project. You need to be regarded as a numbers guru in order to build credibility with the "customer" (internal or external; management, sponsor, or critic). A solid budget must be established up front, since ROI projects can be expensive and take time.

Since being smart about money and numbers is a key part of many people’s jobs, make these skills part of your tool kit too if you want to be successful. In many cases you have just one opportunity to establish credibility, so mistakes are not an option where finance is concerned.

In determining resource costs, think through resource needs carefully at each step. As you plan, be brutally realistic about the scope and actual time required. Is this a full-time job for you? Do you have other resources at your disposal to deploy on the actual "doing" of the work and the gathering of the data or are you a one-person show? Is this an additional job on top of the other three full-time jobs on which you are deployed?

Do you have the resources required for data entry and number crunching – someone who has an excellent command of Excel or Lotus 123 to manipulate the data accurately? Who will analyse and make sense of the findings? Who has the requisite MS Project or FastTrack expertise to create a timeline? What about other employee time and costs to oversee data distribution and collection? Make no mistake, conducting an ROI study requires time and concentration. Progress will not occur with a stolen few minutes, especially if you are still in the learning mode.

6 Everyone who touches the process needs to understand and buy into the reasons for and importance of the ROI study. Explain what it will mean to them and their job. How will they benefit from the results of the study?

Never forget that you do not live and work in a vacuum. Your company is a highly integrated and sensitive system of interconnected people and processes on which you rely for you data – sponsors, local champions, administrative people, critics, etc. Be careful to obtain approval from all power-brokers concerned, especially if you are asking for sensitive numerical data from them or from their employees.

Select the appropriate vehicle to enable ease and accuracy of data collection

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7 Review all possible options and then select the approach that best meets project needs. Will you use questionnaires, surveys, tests, interviews, focus groups, observation, performance records, etc? Keep credibility foremost in mind when choosing a data collection vehicle. Consider not only which approach, but also what participant audience is most likely to supply the information needed to build a credible ROI case. Careful and thoughtful preparation saves backtracking, confusion, and wasted time and effort.

Gwen Berthiez is account manager with the Leadership and Support Team in Raytheon Training’s Troy, Michigan, USA office. [email protected]