Return on Investment: A Placebo for the Chief Financial Officer… And Other Paradoxes
Main Article Content
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
Copyright and Permissions
Authors retain full copyright for articles published in JMDE. JMDE publishes under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY - NC 4.0). Users are allowed to copy, distribute, and transmit the work in any medium or format for noncommercial purposes, provided that the original authors and source are credited accurately and appropriately. Only the original authors may distribute the article for commercial or compensatory purposes. To view a copy of this license, visit creativecommons.org