Return on Investment (ROI)
ConceptStep 4: Select & Plan
Definition
A financial ratio comparing the net benefit of an improvement to its total cost.
ROI is calculated as (Net Benefit / Total Cost) × 100 and expressed as a percentage. In PIPS, Cost-Benefit Analysis produces the ROI figure that helps leaders justify resource allocation. A positive ROI means the improvement pays for itself; the payback period shows how quickly. ROI is the single most persuasive metric when presenting an improvement proposal to executive stakeholders.
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Where This Fits in the PIPS Methodology
This concept is used in Step 4: Select & Plan — Decision matrices, weighted voting, RACI, implementation planning.
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