A Detailed Analysis Of The ROI V Model

ROI Methodology® allows you to measure your project or programs at every step so that you can adapt your strategies in real-time if it does not meet your business needs. The V-Model of the ROI Methodology focuses on creating a complete project strategy through the initial analysis, setting objectives, data Collection,  isolating the impacts, and making the final evaluation of your projects and programs.

To create a successful program alignment; you must follow the following process:

STEP 1: The V model starts with the Initial Analysis:

Why: Answering the Why is the first step in the ROI Methodology. In this step, you ask questions like: " Why you this program?” Why do you want the program to become successful? What are the benefits you can derive from the program? Who will benefit from the program?

The Initial Analysis includes determining the needs:

The Payoff Needs: The first issue is to address the potential payoff needs. Identifying payoff needs, those opportunities for the organization to make money, save money, avoid the cost, or do some greater good, begins with the following questions:

• Is this program worth doing?

• Is this a problem worth solving?

• Is this an opportunity worth pursuing?

The Business Needs: Start pinpointing one or more business measures already in the system that need to improve as a result of the program. When determining business needs, specific areas are selected to assess the business situation.

Once you have figured the payoff needs and the business needs, the next step in the V model is to identify the causes of the programs and select the right opportunity.

The Performance Needs: Describe the problem or opportunity with business impact measures and identify the solution or solutions that will influence these business needs.

Businesses can use the following approaches to delve deeper into the analysis:

• Examine the data and records.
• Initiate the discussion with the client.
• Use benchmarking from similar solutions.
• Use evaluation as a hook to secure more information.
• Involve others in the discussion.
• Discuss disasters in other places.
• Discuss the consequences of not having business alignment.

Learning needs: Determining the Learning needs can ensure all parties know what they need to do and how to do it as the performance is delivered. In some cases, learning becomes the principal solution, as in competency development, technology changes, and system installations.

The Preference Needs: This step drives the program requirements. The preference of the content, process, schedules, or activities for the structure of the program is determined. 

STEP 2: Setting Objective according to your need analysis

Program objectives should be agreed upon while planning for the program. SMART Objectives are essential as it helps provide program clarity and strong links to evaluation. It is much easier to evaluate a program with SMART Objectives.

Reaction Objectives:

Reaction Objectives help identify the goals for participants' reactions and planned actions. Businesses can prepare a questionnaire where the participants have to rate out of 5.

Following statements could be included:

• The program is relevant to the needs of the target audience.
• The facilitators/organizers responded to my questions.
• The program is valuable to this mission, cause, or organization.
• The program is essential to my (our) success.
• The program is motivational for me (us).

Learning Objectives

Learning Objectives focus on points like:

Performance: what the participant or stakeholder will be able to do as a result of the program.

Conditions: Situations under which the participant or stakeholder will perform the various tasks and processes.

Proficiency: Criteria or the level of proficiency necessary to perform a new task, process, or procedure that is part of the solution.

Application Objectives

Application Objectives indicate how the participants will apply or use the programs. For the programs to be a success, there should be demonstrable behavioral changes in the participants.

For example:

1. Fifty percent of conference attendees will follow up with at least one contact from the conference within 60 days.
2. Sexual harassment activity will cease within three months after implementing the zero-tolerance policy.
3. Diabetic patients will implement three of the four critical behaviors in 15 days.
4. Thirty percent of citizens will start recycling household waste.
5. Trainees will routinely use problem-solving skills when faced with a quality problem.

Impact objectives

On the completion of the program, it should result in a positive impact.

For example:

1. The conference attendees should have successfully enrolled in the courses, or they must have shown interest in the cause. 
2. Complaints of abusive force by police should reduce by 10 percent in six months.
3. Diabetes patients will have reduced blood sugar levels as they are following advice regularly.
4. Due to the recycling of household waste, the air, water, or soil pollution rate must go down.
5. After using the problem-solving techniques, the processing time for work visas will have a 30% reduction in two months.

ROI Objectives:

The ROI Objective helps in determining the return on the overall program investment. After discussions with the stakeholders or the program sponsors, ROI Targets are determined.

For Example:

1. Businesses can set the value at
2. Same level as other investments; usually at 15% ROI
3. Slightly above other estimates at 25% ROI
4. Break-even with the expectation of getting a return of the same amount that you have invested in your project
5. Return On Investment set at client expectations.

Note: Private sector organizations usually go with option #2; public sector organizations prefer #3.

STEP 3: THE ROI PROCESS MODEL

Program alignment with business goals is essential for overall success. Evaluation begins with the objectives of the program or project. Data planning is required to expect answers to the fundamental questions related to the program, project, or business initiative.

This evaluation includes five levels of data:

Level 1- Reaction and Planned Action: Data collected in relevance and importance to the job. How effective the participants find the program? The effectiveness of the Coach training and how often are they going to recommend to others.

Level 2- Learning: Evaluation in this step helps uncover the strengths/weaknesses of the program. Translating feedback into action,  Involving team members, and communicate the results effectively.

Level 3 -Application/Implementation: Includes a complete and adjusted action plan. This data collection will help you to identify barriers and enablers and also show improvements in skills.

Level 4 –Impact: Data concerning the impact of the project will focus on change in monthly revenue, direct monetary savings, voluntary turnover, customer impression index.

Level 5 –ROI: ROI= [(Benefit derived from the investment - Cost of Investment)/ Cost of Investment]*100

Conclusion

The V-model focuses on how to:

• Collect data to identify the needs,
• Setting proper objectives for your program, or business projects,
• Evaluate the projects and measure the outcome.

For a better understanding of how to use the ROI Methodology for your program, contact us for a free consultation.