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| Business Case ROI Template in Excel |
Free Business Case ROI Template Excel for IT Initiatives
This Free Business Case ROI Template Excel is a comprehensive general-purpose business value model (ROI calculator) to support the development of business cases for enterprise-scale information technology-based projects. It provides a robust structure to help organizations assess the business value (costs, benefits, TCO, and ROI) of technology projects/initiatives.
This workbook can be used as a standard corporate business case template for technology-based initiatives. It can also be used by consultants and technology vendors to articulate the business value of their products and solutions.
The Business Case ROI Template Consist of 9 Worksheets:
Organizational Profile worksheet
Collects information about: organization size, location, and industry; end user types and labor costs; and the initiative to be modeled. This information is used to estimate default values for all costs and benefits throughout the rest of the model. It displays a summary of costs and benefits of the scenario modeled.
This worksheet contains key inputs/assumptions that drive cost and benefit calculations throughout the model. Defaults input values are provided based on industry, location, and organization size. These default input values should be reviewed and modified as appropriate. A summary of the results is provided to the right to assist in viewing output implications of input changes. This summary data will be updated as changes are made throughout the model.
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| Organizational Profile worksheet |
Sample Initiatives worksheet
For Reference Only: provides key features, capabilities, benefits, and common vendors/products for the 18 sample initiative types included in the model.
Sample data should not be used for making investment decisions. Sample data is not meant to represent average/typical project results, is not based on research, and is not provided at the lowest level of detail. It should only be used as a starting point for assessing the business value of your project. Initiative costs and benefits will differ substantially from one organization to another.
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| Sample Initiatives worksheet |
Implementation Costs worksheet
Estimates all costs (direct and indirect) needed to implement, fully adopt, and support the solution. Cost categories include: hardware, software, IT labor, and user labor, including one-time and annual on-going costs.
This worksheet estimates all costs needed to implement the initiative, including hardware, software: IT labor/services, and user labor costs.
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| Implementation Costs worksheet |
IT Labor TCO Saving worksheet
This worksheet estimates IT Labor TCO by estimating/allocating labor effort across common IT staff activities (as a % of total by category). The number of FTEs (full-time equivalents) the calculated. Then the likely % reduction in effort (for existing activities only) enabled by the solution is estimated.
All increases in labor (required to implement/support the new solution) should be included in the "Costs" worksheet. As-is (current) and To-be (after the solution is fully implemented) TCO is calculated on displayed in bar charts to the right. The benefit (summarized at the bottom) is any annual on-going TCO savings enabled by the initiative.
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| IT Labor TCO Saving worksheet |
Direct Cost Savings worksheet
Estimates non-labor direct IT and business cost savings enabled by the solution.
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| Direct Cost Savings worksheet |
User Productivity Benefits worksheet
Estimates user time/labor savings enabled by the solution. First estimates the amount of time users spend conducting common business activities then estimates how much the solution is expected to increase the efficiency of conducting key activities. The time savings is discounted using a "Productivity Conversion Factor", then converted into $ value.
This worksheet estimates the business user productivity benefits enabled by the initiative. These benefits are calculated based on time savings of conducting common business activities. Although these benefits are "Indirect" (not part of the IT budget), they do typically improve profitability.
The method below tends to be more conservative (yet more comprehensive) than other methods of estimating business user impacts. This productivity analysis only estimates efficiency improvements, not effectiveness (agility, decision-making) improvements. A "conversion factor" is applied because not all saved time may be used to conduct other value-added activities.
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| User Productivity Benefits worksheet |
Revenue Impact worksheet
This worksheet estimates incremental revenue enabled by the solution. Not all projects will have credibly quantifiable revenue impacts. Revenue impacts can be difficult to accurately assess. Research, analysis, and supplemental modeling is likely needed to credibly estimate true revenue impacts. One key is to target (at a detailed level) precisely what portion of revenue is likely to be impacted (the segment) and how the solution is enabling the revenue increase (the driver).
This model assumes the initiative will enable a one-time revenue increase (the same annual revenue benefit throughout the life of the solution). Note that the benefit is the marginal profit on the incremental revenue, not the revenue itself. We recommend using net operating profit, not gross margin: in the long run, on average, fixed costs tend to increase at the same rate as revenue growth.
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| Revenue Impact worksheet |
Key Performance Indicator Assessment worksheet
Assessment of how the solution may impact a variety of business KPIs. In this model, these KPI changes are not converted into financial benefits.
Not all benefits can credibly be translated into financial (S) benefit terms. These are sometimes referred to as intangible benefits.
This worksheet provides a structure (one of many) to estimate how the initiative may impact non-financial KPIs. The percentiles shown are how the organization's KPI performance compares to others in the industry. 0% represents worst performance in the industry (laggard); 50% is average performance; 100% is best in the industry (world class performance).
For example, being at the 20th percentile implies that 80% of the other organizations in the industry perform better. The "Improvement" indicates how much the organization is expected to improve KPI performance due to the solution. The model assumes a linear relationship between KPI performance and industry percentile — a simplifying assumption.
Select "Business Objectives" and KPIs that are important to your business and are expected to be significantly impacted by the solution. Estimate "Laggard" and 'World Class" KPI values in your industry. Next determine what percentile your organization is currently performing at (the as-is KPI value is calculated). Next determine to what percentile you expect the initiative will take you to. The to-be KPI value (and % improvement) are calculated.
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| Key Performance Indicator Assessment worksheet |
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| KPI performance compassion |
Financial Analysis worksheet
Summary of costs & benefits by type; Cash flow analysis; calculation of ROI, payback period, NPV, and IRR; and graphs.
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| Financial Analysis worksheet |
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