How does one calculate the ROI of a Software project? Also, any difference between Long term and Short term projects?

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Manigandan Kumaran

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ROI is return on investment, or the capital employed. In a very practical sense, the ROI is nothing but the Rate of Normal return that can be attributed to the industry, multiplied by the capital invested. If the % ROI is not know, or given, you may take the normal returns prevailing in the same industry....
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ROI is return on investment, or the capital employed. In a very practical sense, the ROI is nothing but the Rate of Normal return that can be attributed to the industry, multiplied by the capital invested. If the % ROI is not know, or given, you may take the normal returns prevailing in the same industry. Mathematically, it can be denoted by the formula ROI = ROI % X Capital Employed Simply speaking, it is what you get back from a project, had you invested some of your money into that. Long Term Projects Vs Short term Projects- These are differences between projects based on the time period involved. Projects having very less time say upto 12 months can be considered to be short term projects. Such initiatives may be taken to solve a specific issue, and involve lesser funds. These may be in the nature of internal projects to solve internal problems.The formalities and regulations associated with these my also be lesser. these projects may even take off for such limited periods such as 1 week, or few hours. Long term projects, on the other hand involve huge amounts of resources, and larger gestation periods, 12 months are more. The formalities and legal costs involved, will of course be much higher. Rather than addressing a specific issue, it definitely seeks to "earn" a return. Thus, it may be open for external parties as well, both for raising funds and operations. read less
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Rate of Interest should be calculated according to the risk involved with the company managing the software. So it depends on the project. If you are looking to get a loan on Software project better try to get a venture capital. Yes, there is huge difference between Long Term and Short Term Project,...
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Rate of Interest should be calculated according to the risk involved with the company managing the software. So it depends on the project. If you are looking to get a loan on Software project better try to get a venture capital. Yes, there is huge difference between Long Term and Short Term Project, the whole difference is of Economic Profits, While in Short term there can be losses / profit whereas in long term it benefits the growth of the company as the project works on economies of scale once launched. read less
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Businesses are in business to make money. But calculating the true value of any project (Lean Six Sigma or otherwise) with respect to its impact on margin has always been challenging, mainly due to the ambiguity of turning notions into dollar values. For instance, it is clear that training employees...
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Businesses are in business to make money. But calculating the true value of any project (Lean Six Sigma or otherwise) with respect to its impact on margin has always been challenging, mainly due to the ambiguity of turning notions into dollar values. For instance, it is clear that training employees will improve expertise and productivity, but how does that translate to bottom-line savings or revenue growth? Spending thousands of dollars on automated systems and software is likely to improve work efficiency, but what’s the dollar-value improvement of that efficiency? Return on investment (ROI) is a key calculation in answering these questions, as well as showing the project value and its impact on the margin. read less
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Rate of Interest should be calculated according to the risk involved with the company managing the software. So it depends on the project. If you are looking to get a loan on Software project better try to get a venture capital. Yes, there is huge difference between Long Term and Short Term Project,...
read more
Rate of Interest should be calculated according to the risk involved with the company managing the software. So it depends on the project. If you are looking to get a loan on Software project better try to get a venture capital. Yes, there is huge difference between Long Term and Short Term Project, the whole difference is of Economic Profits, While in Short term there can be losses / profit whereas in long term it benefits the growth of the company as the project works on economies of scale once launched read less
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