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The first of the Excel sheet's three tabs that needs to be tackled, and the guts of the tool, is the Investment Calculations tab. Based on your research, plug in the initial and annual costs for your proposal and the client's current practices in these key categories:
If the project has a key expense category that isn't included, simply click on the row marker to the left of the Misc. category row and select Insert from the shortcut menu, as shown below.
As you work with the spreadsheet, be sure to insert or delete rows and columns from within ranges of cells, so as not to invalidate some of the summing functions included in the tool.
None of the Investment Calculation entries are mandatory; in fact, you don't have to include any data about current practices if your proposal is genuinely an entirely new business that won't tap into any existing resource flows. But the more information supplied the better, including line-of-business employees needed to sustain the business your IT solution will support. For example, if the business will require salespeople to travel frequently, throw that in. Remember that the ROI equation is a measure of total payoff on business investment, not just investment on servers and developers.
In the sample project depicted here, a fairly large investment is being proposed on the front end with diminishing costs for software licenses and maintenance but increased costs for internal development; this could be the typical profile for bringing an outsourced application in-house. Remember that a common knock on ROI is that it heavily favours cost-cutting projects and penalises aggressive plans for growth, which by their nature include some risk. It's just easier to save money than to make money, but in ROI computations, savings and earnings carry the same weight.
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