ROI and what it means professionally

29 Aug

How many of you have heard the acronym ROI?  How many of you know what it means?  If you don’t know what it is, or haven’t heard of it, you should make yourself familiar with it.  Glancingly familiar, at the very least.

ROI means “return on investment”.  It’s commonly used in the private sector, but I think it can apply to a library in any sector.  The wonderful thing about ROI is that it performs a very unique job, determined in part by how you choose to set the parameters.

See, return on investment doesn’t have to be narrowly defined by your monetary investment, or does return mean profit, exclusively.  “Investment” can be anything from monies, to time, effort, and brainstorming sessions with others.  You can define how much investment you’ve put in (and it’s good to use some sort of  number or value-indicating statement) based on the work that went into a project.  “Return” can range from direct profit, to increased sales (in the case of libraries, usage statistics or circulation stats), community feeling/goodwill, visibility/press, or reduction in other costs.

So obviously, knowing how much investment was put into your goal of “increase community visibility” for the library helps you evaluate whether or not your strategy was successful when you look at your usage/circulation stats for your return.  On a personal professional level, looking at the investment in your career could include time spent reading publications, travel expenses to conferences, time spent on professional organization activities and message boards, writing blogs, keeping your LinkedIn account current, and so on.  The return on investment could include knowledge you glean from professional organizations, getting your name more visible within your local network of professionals, visitor stats for your blog, earned a chairmanship in your professional organization, etc.

The only limit on your investment and return is you!  It’s up to you to determine the parameters, but make sure you do so consistently and with honesty, otherwise your calculations will be erroneous.  The whole point of calculating ROI is figuring out how much you’re getting out of your investments, to see if you need to change your methods or shift focus to something else.  Never lose sight of the goal: keeping your return higher than your investment.

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