TABLE OF CONTENTS Sometimes there is confusion about when it is appropriate to develop the ROI. The traditional and recommended approach, described in the previous chapters of this book, is to base ROI calculations strictly on business impact data obtained after the program has been implemented. In the approach, business performance measures (Level 4 data) are easily converted to a monetary value, which is necessary for an ROI calculation. Sometimes these measures are not yet available, and it is usually assumed that an ROI calculation is out of the question. This chapter will illustrate that ROI calculations are possible at a variety of time frames using a variety of data. Preprogram ROI forecasts are possible, as well as forecasts with reaction data (Level 1), learning data (Level 2), and application data (Level 3).
Although the most accurate way to assess and develop an ROI calculation is based on postprogram data, sometimes it is important to know the forecast before the final results are tabulated. Forecasting ROI during the project, or in some cases, even before the program is pursued, is an important issue. Critical reasons drive the need for a forecasted ROI. Collectively, the five reasons, described in this section, are causing more organizations to examine ROI forecasts so that the client or sponsor will have some estimate of the expected payoff.
Reducing uncertainty in a proposed program is sometimes critical. In a perfect world, the client or sponsor of a new program would like to know the...
