7.5. SCHEDULE AND RISK: THE HIDDEN FACTORS IN EVALUATING ROI

Up to now, we have examined three ROI categories (tactical, operational, and strategic) in a vacuum. In reality, the decision regarding which ROI calculation approach is right for your business will be largely determined based on two factors that drive many decisions from behind the scenes: schedule and risk.

Two important considerations when evaluating ROI are the time frame for investment return (schedule) and the sponsor's tolerance for delay, complications, and potential cost overruns (risk). The three ROI categories outlined earlier are typically realized in three very different time frames with escalating potential for both risk and reward. Exhibit 7.2 illustrates the spectrum of possibilities.

To some degree, Exhibit 7.2 begs the question of exactly what constitutes short, medium, and long time frames. The reality is that this will vary depending on the size of the SOA initiative. For a relatively small SOA deployment, a short-term time frame might be two months and a long-term time frame might be nine months. For a more substantial SOA deployment, we might talk in terms of six months for short and three to five years for long. Also keep in mind that when viewing the operational ROI time frame, we may even throw out an arbitrary time-line and instead think in terms of achieving an ROI after a certain number of reuse instances.

Figure 7.2. Each of the three ROI categories is bound to a different time frame and ...

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