A return on investment calculation, in its simplest form, is easy enough: Compare the amount you spend on a project to the amount in brought back into your organization.  However, where most people go wrong is only included the budgeted cost of the project, and neglecting to include the cost of their own salary in the equation.  Now, I’m guilty of this too.  I hate seeing my pretty 10,000+% ROI drop to 7,000% from adding in the cost of my time to the project.  But it’s a more realistic number and when you explain your calculation to your higher ups it can show them on a continual basis that your position is justified and producing. 

Here’s how you figure out your internal staff cost: 

Step One: If you receive benefits, take your salary and add one-third to it.  On average, this is the cost of employee benefits to the institution.  Then you have your total annual cost.

Step Two: Take your total salary and divide it by 2080, the total number of hours worked in a year for your average 40-hour work week.  Now you have your hourly wage.

Step Three: Take your hourly wage and multiply it by the total number of hours you spent on the project.  Now you have your internal cost.  Add it to the overall cost of the project before doing your ROI calculation and you’re all set.

If other people were involved, use a guessitmate of what you think their salary is in the calculation as well.  It doesn’t  have to be perfect.  Even one that is extremely off isn’t going to shift your total ROI on the project that significantly.