Unique Return on Investment
Most organizations do not even consider building a new application, buying an applications product, or changing a legacy system unless there is a positive return on investment. In other words, the benefit of the new application, applications product, or legacy-system change, must be tangible and quantifiable in dollars. The dollar benefit must be sufficiently large to offset the total expense of the new application, applications product, or legacy-system change based on organization planning directives.
For example, most organizations look favorably on a project that costs $1M and saves $500K annually as it provides a 2-year return on investment (years beyond year 2 are "gravy" and the benefit accrues to the organization). Every organization is ecstatic when an ROI is less than one year.
Consider the implications of dropping the cost of building an application or doing applications maintenance by 30%, 40%, 90% or more. That $1M project could become a $500K or less project and the ROI could go from 2 years to less than 6 months!
