Understanding ROI in Project Management: Essential Metrics for Success

In this insightful video, we explore the crucial concept of ROI—or Return on Investment—in project management. Understanding ROI is essential for project managers, as it offers a simple yet robust metric to measure the value of investments across various sectors including business, public, and non-profit. The speaker explains the straightforward calculation of ROI as the ratio of net income to total cost, emphasizing that higher ROI indicates a more advantageous investment. Despite its popularity, the video also highlights a key limitation of ROI: its failure to factor in the timing of costs and profits. Viewers will learn about alternative methodologies like discounted cash flow and net present value, which provide deeper insights, particularly for long-term projects. This video is a valuable resource for project managers seeking to enhance their investment evaluation skills, ensuring they can demonstrate value effectively to finance stakeholders.