Checklist for calculating ROI

I am frequently asked for help in calculating the ROI of a
new project. Here is a checklist that covers the factors that CFO’s and
CEO’s might use in their decision making.

John Sullivan

A checklist – Possible criteria for assessing
project/ problem impacts












CEO’s and CFO’s have many criteria for assessing the ideas/ projects they
approve or reject and problems they choose to address. All impacts effect
one of these 5 categories… Quality, Quantity, Time, Money or
Satisfaction. This checklist might help stimulate your thinking when you
are calculating a new project’s ROI or business impact.
The solution/ idea or problem impacts our…
Strategic impacts
1.      Stock price
2.      Earnings per share (E.P.S.)
3.      Profitability
4.      Return on Investment (ROI)
5.      Gross profit margins
6.      Sales revenue
7.      Market share
8.      Loss/ gain of major customers
9.      Customer satisfaction rates
10.  Rate of innovation
11.  Product brand or brand image
12.  Product quality (Error rate)
13.  Product development cycle time and Time to Market

Personal impacts
14.  It’s part of the bonus criteria of the CEO / top execs or
it keeps the CEO up at night
15.  An executive’s personal image, power and career
Other major factors
16.  PR impact
17.  Risk of failure/ Likelihood of success
18.  Strategic forecasting and planning
19.  Cost of an error
20.  Response speed and agility
21.  Upfront money needed
22.  Payback period for the investment
23.  Global capabilities
24.  Supplier and vendor relationships
25.  Relationships with major customers
26.  Opportunity costs
27.  Insurance costs
28.  Outsourcing relationships
29.  Off shoring capability (Ability to shift work)
30.  Technology capability
31.  A major competitor does it better
32.  Our firm’s competitive advantage (i.e. a patent)
33.  Cost of production 
34.  Impacts our most profitable division or region
35.  Impacts our high margin products/ services
36.  Low risk/ high likelihood of success
37.  Short payback period
38.  Low initial investment or upfront money
39.  Cash flow
40.  Bond or credit rating
41.  The general ledger (The general ledger is the financial
reporting system)
42.  Results metrics
43.  Higher transaction or over-head costs
44.  Privacy
45.  Security
46.  Supply chain and inventory costs/ capabilities
47.  Property values
48.  Maintenance costs
49.  Materials cost
50.  Responsiveness to problems and opportunities (Agility)
51.  Equipment value
52.  Any major deliverable
53.  Price of our product
54.  R&D capability
55.  Import/ export capability
56.  Marketing, advertising or market research capability
57.  Borrowing capability
58.  Customer loyalty
59.  The value of our investments
60.  Real estate costs/ value
61.  Production capability
62.  Web/ Internet capabilities
63.  IT capabilities
64.  Technology capabilities
65.  Likelihood of bankruptcy or firm failure
66.  Legal or regulatory issues including Sarbanes Oxley issues
67.  Manager’s time
68.  Corporate goals and values
69.  Environmental impacts
Employee related
70.  Employee productivity
71.  Employee capabilities
72.  Labor costs
73.  Key employee retention
74.  Hiring top people
75.  Over-all employee headcount
76.  Employer brand image
77.  Time away from their assigned work (Ex. – Training)
78.  Total employee costs (Pay and benefits)
79.  Employee diversity
80.  The internal movement of our employees
81.  Our sales force
82.  Leadership succession/ development
83.  Team effectiveness or cohesion
84.  Employee sabotage
85.  Unionization or labor relations
Also consider any criteria that were used to accept/ reject past

© Dr. John Sullivan 9/22/08

About Dr John Sullivan

Dr John Sullivan is an internationally known HR thought-leader from the Silicon Valley who specializes in providing bold and high business impact; strategic Talent Management solutions to large corporations.

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