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An ROI Approach to Budgeting

results-productionDetailed evaluation of anticipated return on investment for each prioritized project helps gain project approval and maximize project results.

In my last two blogs, I discussed the importance of an automation roadmap and how to get started developing one. Hopefully, you’ve created a prioritized list of potential projects and are now ready to tackle how to budget for them.

Many people seem to think that in order to establish a budget, they need to develop a spec, reach out to vendors and conduct a formal Request for Quotation (RFQ) process. All of this takes a lot of time and energy, so I hope it is welcome news that I do not recommend this approach. Rather, look at it from a Return on Investment (ROI) perspective.

What payback period does your company expect on each investment? A two-year ROI seems to be an undocumented industry standard, but each company will have its own. Meeting or beating that payback timeline is typically important for project approval. Continue Reading →