Additionally, in my opinion, Dr. Phillips' conservative approach to ROI is the greatest selling point. He accounts for error in all his measurements. For instance, when collecting self-report data, he has the respondent allocate a confidence weighting to their estimates. This confidence value weights the response while taking into account error. Furthermore, when calculating values for hard data or converting soft data (i.e., work habits and attitudes) to monetary benefits, he offers formulas that result in a range and suggests that the lowest, most conservative value is reported. Converting soft data to monetary benefits can be painstaking, but Phillips very eloquently addresses the conversion. By obtaining estimates from stakeholders (with a confidence weighting, of course), soft data can contribute to the overall calculation of return on investment. Therefore, your final conservative monetary return is not only based on hard data, but it is based on the less tangible elements of your organization as well.
If Phillips' approach to calculating ROI is too quantitative or laborious for your organization, you should consider calculating the return on expectations. Return on expectations can be assessed via a concept mapping (a multidimensional scaling approach) technique derived by Dr. Bill Trochium at Cornell University. Visit www.conceptsystems.com to review his technique. With Dr. Trochium's visual approach, you have stakeholders (i.e., stockholders, executive management, clients, employees, etc.) set expectations for your organization and then assess the alignment between set expectations and the actual performance of end groups. The result is a graphic pattern match that is easily interpreted and empowers decision-makers at all levels. Concept mapping has some of the same problems inherent in ROI, such as obtaining management buy-in. However, it is much easier to conduct than an ROI study, is based on a sound measurement techniques, and produces graphical results that, when considered collectively, illustrate the expected bang for your organization's buck
Additionally, in my opinion, Dr. Phillips' conservative approach to ROI is the greatest selling point. He accounts for error in all his measurements. For instance, when collecting self-report data, he has the respondent allocate a confidence weighting to their estimates. This confidence value weights the response while taking into account error. Furthermore, when calculating values for hard data or converting soft data (i.e., work habits and attitudes) to monetary benefits, he offers formulas that result in a range and suggests that the lowest, most conservative value is reported. Converting soft data to monetary benefits can be painstaking, but Phillips very eloquently addresses the conversion. By obtaining estimates from stakeholders (with a confidence weighting, of course), soft data can contribute to the overall calculation of return on investment. Therefore, your final conservative monetary return is not only based on hard data, but it is based on the less tangible elements of your organization as well.
If Phillips' approach to calculating ROI is too quantitative or laborious for your organization, you should consider calculating the return on expectations. Return on expectations can be assessed via a concept mapping (a multidimensional scaling approach) technique derived by Dr. Bill Trochium at Cornell University. ... With Dr. Trochium's visual approach, you have stakeholders (i.e., stockholders, executive management, clients, employees, etc.) set expectations for your organization and then assess the alignment between set expectations and the actual performance of end groups. The result is a graphic pattern match that is easily interpreted and empowers decision-makers at all levels. Concept mapping has some of the same problems inherent in ROI, such as obtaining management buy-in. However, it is much easier to conduct than an ROI study, is based on a sound measurement techniques, and produces graphical results that, when considered collectively, illustrate the expected bang for your organization's buck