Return on investment (ROI) is an essential corporate key performance indicator (KPI) that transportation and logistics company executives often overlook. ROI is relevant to any new project the organization aims to start. It helps stakeholders focus efforts on the deliverable, which must always be with the company’s objectives and goals.
By João Ricardo Gubolin, Chief Business Development Officer · January 26, 2023.
The easiest way to measure ROI is to account for it in numbers. For example, for a project that aims to reduce labor costs, team members must assess how much labor dollars it will save yearly, then compare it with the project’s total cost to have its ROI. For projects intended for cost reductions, it is also essential to consider how much that reduction will add yearly to the net margin. Further, comparing this increase in net margin to the same quantity if, instead, the company tried to achieve it through sales is an exciting simulation to add even more value to the ROI calculations.
When thinking about ROI, individuals often limit this concept to numbers. However, the return on investment can also mean a boost in quality. For instance, this can be improving customer service or improving employee satisfaction. Of course, this does not exclude the need to measure it. There are several tools and methodologies to measure quality. The importance of relevant accounts is to take the same tool and methodology to use the situation before and after the project is complete.
As a critical corporate key performance indicator, return on investment must be assessed whenever a transportation and supply chain company plans to start a technology project. Stakeholders can use ROI to measure quantitative or qualitative results. When measuring qualitatively, it is crucial to evaluate the situation before the project’s conclusion and compare it to the scene afterward, always with tools and methodologies. Ensuring technology projects’ outcomes are aligned with the organization’s goals, and objectives is vital to ensure ROI increases business competitiveness and perpetuity.
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