The real ROI

One method of evaluating and investment that every MBA is taught is Return on Investment – ROI. While its a fairly simple calculation and many RFID projects can expect superior ROI over other investments, there are many RFID projects that still make good sense. Why? Because the return comes as a second or third order effect. Often an operational manager can see the first or second order, but the third and fourth subsequent events that are enabled by the technology are beyond their perview. Even if they can anticipate them, quantifying them accurately would be guesswork.

Yet, if you believe in the basic tenant that your organization will improve given opportunity and direction, progress is always better than stagnation. Even if the first order effect is less than break even, the process of implementing an enabling technology will provide new opportunities for additional gains that are only clear once you get there. In todays rapidly changing world, we should seek modernization not only when it is financially obvious. Other opportunities such is new capabilities, efficiencies, and morale are the unmeasurable tools of return.