What is ROI?
Definition
Return on Investment - the financial benefit gained from software adoption measured as (Benefits - Costs) / Costs × 100. ROI calculation includes time savings, productivity gains, error reduction, and revenue increases against total cost of ownership over multi-year periods."
Why This Matters
Return on investment calculations provide the business justification needed to secure budget and demonstrate value. ROI analysis before purchase helps justify the investment; tracking ROI after implementation proves value and supports renewal decisions.
Related Terms
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Evaluation Criteria
Vendor Management & Evaluation
Standardized requirements used to assess and compare software vendors including product capabilities, security certifications, implementation methodology, support SLAs, and pricing structure.
Vendor Selection
Vendor Management & Evaluation
The systematic process of evaluating and choosing software vendors based on product capabilities, security compliance, implementation support, company stability, and pricing.
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