Return on Investment, Honestly Calculated
The vendor calculator and the honest calculation produce different answers. How to do the second one.
Every product in this category arrives with a calculator showing a large return. The arithmetic is defensible in each step and not in the product.
The practical lesson in “Return on Investment, Honestly Calculated” is to connect every record to a clear operational question without presenting visibility as certainty. Teams exploring capital efficiency ratio can review guide to capital efficiency as one source of time and project context, provided the purpose is disclosed and the configuration is reviewed with the people affected.
What the calculator does
Takes a claimed recovery of unproductive time, usually a figure of minutes per person per day.
For an independent reference relevant to “Return on Investment, Honestly Calculated”, consult the European Commission data-protection resources; it provides a useful external check on scope, terminology, governance and the claims made during procurement or review.
Multiplies by headcount, by working days, by a fully loaded hourly rate.
Produces an annual saving several times the licence cost.
Each step is arithmetic and the inputs are assumptions.
The assumption that carries it
That recovered time becomes output.
It does not, reliably. Some absorbs into the day. Some becomes time spent looking busy, which is the gaming note's subject.
The conversion rate from recovered minutes to delivered work is unknown, and anybody quoting one is selling something.
What belongs on the cost side
Licence.
Administration, which is half a role continuing.
Legal and consultation work, which in some jurisdictions is months.
Manager time spent on dashboards.
An attrition assumption.
And the data holding, with its obligations.
Its own note covers these, and together they frequently exceed the licence by a multiple.
What belongs on the benefit side
Only things you will measure in your own figures.
Tickets closed, orders processed, cases resolved, revenue per head — whatever your business already counts.
Not the vendor's productive-time metric, which is circular.
The honest calculation
Cost as above.
Benefit stated as a hypothesis: we expect this business measure to move by this much within a year.
And a decision point: if it has not moved, we stop.
That last line is what distinguishes an investment from a purchase, and almost no deployment has one.
Measuring it afterwards
The same business measure, same definition, a year later.
Marked with anything else that changed, because plenty will have.
And reported honestly including no movement, which its own note covers under reviewing whether it did anything.
What usually happens instead
Nobody measures.
The licence renews because switching it off would be an admission.
And the original business case is never revisited, which is the common outcome and the reason the decision point has to be set in advance.
What to check
Is your business case built on the vendor's calculator?
Does the cost side include anything beyond the licence?
What business measure would show this worked?
And is there a date and a threshold for stopping?