|Forum Home > Project Management Professional (PMP) > Explain the terms Return-on-Investment (RoI) & Value-on-Investment (VoI) ?|
These terms originates from the section "Business value"
Basically the outcomes of Project, Program, Portfolio level deliverbales are expected to get translated to a better business value which should rightfully justify the value of investment.
In business value, The important terms we should focus on here is "RoI" Vs "VoI".
Normally organizations focus on "RoI" (Return on Investments) which primarily focuses on the returns they can expect for their investments they do by under-taking projects, programs within the portfolio. PMI has introduced the term "VoI" (Value on Investments) which is considered to be a broader view than RoI where the business should focus on the overall value which is delivered and the strategic priorities not to be driven purely based on RoI.
In this context, to get the optimum Value on invesments the strategic priorities are well identified in the first place in portfolio level and further it has to be well aligned & supported by the programs, projects within the organization.
Bsaically, the success of portfolio is heavily dependent on the sucess of the program & the projects within the portfolio. Hence, the strategic alignment is not set in the first place then thats the receipe for failure. Also, effective governance to be put in place to measure the ongoing efforts within the portfolio through portfolio review borads and monitor the business changes and ensure they are well aligned & support the strategic organization vision & mission.
You must login to post.