Return on Investment: A Placebo for the Chief Financial Officer... And Other Paradoxes
Background: Return on investment (ROI) is one of the most popular evaluation metrics. ROI analysis (when applied correctly) is a powerful tool of evaluating existing information systems and making informed decisions on the acquisitions. However, practical use of the ROI is complicated by a number of...
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| Main Authors: | , |
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| Format: | Book |
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The Evaluation Center at Western Michigan University,
2011-06-01T00:00:00Z.
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| Online Access: | Connect to this object online. |
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| Summary: | Background: Return on investment (ROI) is one of the most popular evaluation metrics. ROI analysis (when applied correctly) is a powerful tool of evaluating existing information systems and making informed decisions on the acquisitions. However, practical use of the ROI is complicated by a number of uncertainties and controversies. The article reveals some of these controversies in an engaging and thought-provocative manner. Purpose: The intent of this note is to highlight several of the ROI paradoxes in a format of an opinion or a viewpoint with a hope that drawing attention of the ROI practitioners and researchers to these issues will contribute to more transparent and responsible application of the ROI evaluation. Setting: Not applicable. Intervention: Not applicable. Research Design: Not applicable. Data Collection and Analysis: Review of current practice. Findings: The article reveals three weaknesses of the ROI evaluations, which in the absence of the commonly accepted ROI standard, can make results of the ROI evaluations uncertain or questionable. Keywords: return on investment; ROI; paradox; evaluation |
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| Item Description: | 10.56645/jmde.v7i16.322 1556-8180 |