Return on Investment Analysis Essay -- Finance Financial Business Essa

Return on Investment Analysis Profit Every business must devise a means to make and measure the profit from an investment. Profit reflects the very nature of business. Businesses that provide a product or service want to know if their efforts in a particular field will result in financial gain (Wiens 1997). The concept "Return On Investment" provides a means to measure the profit obtained from an investment. I will discuss the area of return on investment from a training and staff development perspective and why it is important. To Train or Not To Train Companies and educational institutions at one time or another will face the question of whether training will help their company remain competitive. Training is very expensive and time consuming. The employee will miss time from work. Someone will have to fill in for the employee. The "fill-in" may not perform as well as the employee which results in lower productivity. Travel and site procurement add to the cost. The trainer will demand a salary and materials. A subject matter expert may possibly factor in the equation. Furthermore, the company usually will conduct a needs analysis to determine if training is the actual solution needed to increase profitability. All of these elements translate into time and money. However, research has discovered that a new medium of delivery has cut cost significantly. The medium is computer based training (Schriver 1999). The expense is reduced by travel, instructor hours, record handling, and productivity (Schriver 1999). Many businesses and educational institution are examining the possibility of computer based training. Many decision makers reason if the same results can be obtained at a cheaper rate, by all means implem... ...emain in an organization or fall victim to cost cutting initiatives. References: Hansen, D. & M, Maryanne (1997). Management Accounting 4th Ed, South Western College Publishing Company.. Lachenmaier, L. & Moor, W. (August 1997). Using Business Performance to Evaluate Multimedia Training in Manufacturing. Performance Improvement, p. 16. Schriver R. & Giles, S. (August 1999). Real ROI Numbers. Training and Development,p. 51. Stolovitch, H. & M. Jean (October 1998). Calculating the Return on Investment in Training: A Critical Analysis and A Case Study. Performance Improvement Vol. 37 #8, 9-20. Todnem, G. & Micheal W. (Summer 1993) Using ROI to Assess Staff Development Efforts. Journal of Staff Development Vol. 14, No. 3. p. 32 Wiens, E. (November 1997). Looking Ahead: How Will Technology Affect the Future. The Technology Teacher, p .21.