RE: Quantifying ROI
- Hi Terence
Mark Denne's book 'Software by Numbers' (http://www.amazon.com/exec/obidos/tg/detail/-/0131407287/qid=1108647320/sr=1-1/ref=sr_1_1/104-9185927-9803132?v=glance&s=books) shows how to measure return using all the standard financial measures, such as NPV & IRR, and how to calculate key metrics such as self-fundng point and break-even point.
It's well worth a read; it will help you clearly demonstrate the value of delivering early and often.
From: Gannon, Terence [mailto:tcgannon@...]
Sent: 16 February 2005 19:17
Subject: Quantifying ROI
Agile Project Management with Scrum is predicated on prioritizing the Product Backlog based on ROI. I was curious to know what units of measure other organizations are using to quantify ROI.
My thinking is that we ought to challenge ourselves to use good old dollars-and-cents, but perhaps there are other, better ideas out there that could also be used?
I'm tempted to add a column to the PB spreadsheet depicted in Ken's book to capture this value, whatever it is we wind up using.
Manager, Software Development
Trican Well Service