What's all this improvement worth? While faster, better-quality decision-making and the ability to turn around a driver-based forecast on a dime are admirable aims, their value to the organization is not easy to quantify, at least not with any precision. The project team in our example decides to bundle these benefits, estimating that the company should realize a revenue increase of at least 1 percent from the combination of all of their project's decision support improvements. If their company's revenue averages $100 million a year, they can expect to bring in an additional $1 million annually. Coming up with the revenue improvement estimate requires a fair amount of professional experience and judgment. Our team bases the number in large part on projected benefits of closing performance gaps between their company and national benchmarks and on the expectations of the senior management team.

Referring back to the benchmarking analysis they completed, the team also establishes a goal of reducing the cost of generating the annual plan from $1,500 per employee to $1,000 per employee. Because the company has 800 employees, the planning process upgrade will save $2 million in expenses over five years.

Achieving these results will require a combination of process change and investment in new technology. The company will have to call in outside expertise to design and implement the process changes, but its major expenditure will be on software. To calculate ROI, our team combines the benefits they expect their project to achieve, subtracts out the costs, then divides the result by the costs. In this simple example, the bottom line of the business case is impressive: With total expected benefits worth $7 million over five years and the total cost of ownership -- including ongoing maintenance of the system -- projected to be $4 million over that same period, the project leader predicts that the company will see an ROI of 75 percent. ($7 million minus $4 million is $3 million, divided by $4 million equals 75 percent.)

In most circumstances, a business case should be developed for any project that will ultimately require senior management's approval. The Buttonwood Group also recommends this approach for projects that may face skeptics or be subject to much debate. In fact, because the business case approach to ROI is designed to build commitment from senior management and organizationwide support, it is worth considering for every project that needs widespread buy-in.

However, building a business case takes time, at least if it's done well. Thus, a project leader needs to decide early on whether this is the route he or she wants to take. We've seen many situations in which a project manager has concluded that the team can get away with a simple cost-savings approach, only to realize too late that senior management just isn't convinced. Trying to identify desired business results and get executives on board after a cost-savings argument has failed is an uphill climb that usually doesn't work.

What's the lesson in all of this? Plan ahead, and choose carefully which ROI approach best fits your circumstances. While a full-blown business case is an obvious first choice in many situations, don't assume that it's any more of a one-size-fits-all solution than any other option; remember the $200 Zip drive. Know what wins over senior management in your company. That should serve as your ultimate guide to building a compelling ROI.

Lawrence Serven is a principal with the Buttonwood Group and is president of XLerant, producer of the BudgetPak budgeting application, which takes a TurboTax-like approach to budget development.