White Paper: Calculating ROI on an Infrastructure Project
Document Number: WP-052020-1
When you look up the definition of ROI (Return on Investment) on the Web, the definition is quite clear:
“Return on investment (ROI) is a ratio between net profit (over a period) and cost of investment (resulting from an investment of some resources at a point in time). … In economic terms, it is one way of relating profits to capital invested.”
Still, one of the problems with this definition is its simplicity. After all, how do you measure investments in infrastructure projects that typically do not return a profit? While they may improve the resiliency of a service and minimize the potential for failure, the results cannot be reflected as profit.
Let us look at a potential resiliency challenge that many companies in the service sector will face as they return from the pandemic. Because of the restrictions on the use of human resources, the technical press outlets are fully focused on promoting the importance of transitioning from manual service inspections to remote monitoring. This is essential to minimize the risk to personnel under pandemic conditions, and no, we can’t assume this one is simply just another 100-year event.