Leveraging ROI Methodology in the Public Sector

Tallahassee, Florida Chapter

Vinod is a program manager in Tallahassee, Florida.

Federal and state agencies across the world are seeing their budgets decrease significantly. This is especially true in the United States, where some of the major federal agencies have seen their budgets shrink by more than 25% in fiscal year 2018.

In order to maintain the same level of service to citizens, federal and state agencies need to increase efficiency by applying innovative techniques such as the return on investment methodology. This article aims to provide an introduction to ROI methodology and provides an example of how the public sector can make its processes more effective by applying it.

ROI overview
Return on investment is extensively used in the financial world. Firms in the private sector extensively use ROI as a tool to compare the benefit of an investment with the cost of the investment. In the financial world, the formula below is used:

As an example, the child support agency enforces if a parent owing support does not make timely payments. The enforcement strategy is primarily governed by federal law, state law and the agency’s business rules. The sequence of enforcement tools is primarily driven by the agency’s business rules. The following tools have been considered for ROI calculation:


Tool Description

Past-due notice

Non-compliant parent is sent a past…

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