Civil, Managed Services 3 MIN Read

Value of Investment: Measuring Impact of Innovation and Modernization

April 12th, 2022

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Measuring return on investment, or ROI, of a project or purchase is an important metric to weigh cost against the outcomes you anticipate. But beyond this finance-based measure is another equally important calculation: the true value of an investment. Because value and cost are two different things.

ROI can be calculated as the sum of the cost savings (usually labor) divided by the sum of the costs to build and implement a solution. And although there are many ways to ascertain ROI, they all focus on this ratio of savings versus cost of services.

Rather, the Value on Investment (VOI) model measures the real-world value of innovations and modernization activities. Looking only at ROI provides a singular view of costs, but misses the bigger picture of the true value of an initiative – one seen by the person, team, or organization that the initiative was ultimately designed to benefit.

Efficiency + Agility = Mission Impact

VOI provides a wider view for an organization, deriving overall value of the innovations, optimizations, or modernizations being implemented.

Importantly, the VOI calculation intersects the traditional ROI metric with the efficiency and agility gains afforded to the mission.

  • Efficiency incorporates speed to complete a task, the continual optimization of services, and the improvement in the customer experience.
  • Agility is the ability to rapidly pivot to changing mission requirements.

Together, efficiency and agility enhance decision-making, inject critical thought throughout the analytical process, and improve response time to address mission needs when selecting new or updating existing capabilities.

Many benefits can be gained to the mission across efficiency and agility valuations.

Every project should be focused on delivering mission value. While ROI is still important, the conversation about real-world value on the investment is an essential one to view a more holistic image of impact to the mission.