Economists think in terms of a return on assets invested and use “Return on Investment” or “ROI” as their shorthand (See my post of March 26, 2006 on other terms used by economists that bear on law department management.). This blog has often used the term or the concept, but rarely in a commendatory way (See my posts of May 1, 2005 on bill review software; May 14, 2005 on knowledge management and ROI; May 14, 2005 on projecting savings from initiatives; July 31, 2005 on the implausibility of some ROI calculations; Feb. 17, 2007 with comments on products and services; Nov. 19, 2005 on Google’s early ROI in the law department; and Jan. 14, 2007 with GE’s claims.)
Put bluntly, I do not trust prognostications of future savings because too many assumptions and interests intrude.
I have written on the ROI of major initiatives (See my post of June 16, 2006 on the ROI of various management actions.). While I am four-square behind law departments that try to think through costs and benefits, both elements are very squishy.