Updating ROI

Anonymous

Having a debate in the office here. Why should a PM update the ROI in their business case after a major scope change? And should it matter if the ROI is tangible or intangible?

Posted: Jan 24, 2013 1:01 PM

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Peter Wright Programme Manager| BAE Systems Southport, Merseyside, United Kingdom

If your scope change affects the ROI and it is not re-basleined at the scope change the benefits being delivered by the project will not be correct. There is a risk then for example that if the scope meant the ROI was greater but not updated in the project then anyone else reviewing the project will loook at the opriginal ROI and may think it is no longer a priority based on other projects with higher ROI and "can" the project, when actually the ROI may be greater than other projects (and vice versa for less ROI)

If the ROI is intengible then by it's definition it has not been quantified and again using the project proiritisation process projects with tangible benefots / ROI may be prioritised oover a non tangible project

All business benefits shoudl be quantified where possible to mitigate this risk for the portfolio.

Posted: Jan 25, 2013 7:13 AM

Wayne Mack Retired| Retired South Riding, Va, United States

The ROI should be updated after a significant scope change because the original ROI has just been invalidated.

The ROI should be recalculated if the scope change results in a signficant change in the benefits, a significant change in the cost, or both. If there is negligible change in benefit and cost, the original ROI is sufficient, but how would that imply a significant change in scope?

The change in ROI would be a contributing factor in determining whether to proceed with the change in scope or not. Yes, recalculate the ROI, even if it is subjective or intangible.

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Posted: Feb 10, 2013 11:35 AM

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Updating ROI

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