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ROI or Return on Investment is a very popular measure that is used to determine the value and efficiency of a particular investment in comparison to an array of other investments. Return on investment has become very popular in the business world because of how simple and versatile the calculation is. In short, if an investment does not show a positive ROI than it should be passed up for another opportunity that shows a positive ROI.
The general calculation for ROI is as follows:
ROI = (Gain From Investment – Cost of Investment) / (Cost of Investment)
Be aware that ROI is not a set in stone calculation, it can be modified for many different situations. For example, ROI does not always calculate for future gains from a situation as the cost of gaining a client. One client could bring a $100 present gain from a $50 investment, but the gain from the investment over the next five years could result in a profit of $5000 or more. It's hard for ROI to calculate this percentage due to the fact that the formula does not have the ability to calculate unearned profit or income.
Return on investment is often used in the world of accounting to calculate whether a potential investment or business decision is worth undertaking. The decision makers, executives, and managers of many large companies strive to improve ROI by increasing profits, reducing costs, and maximizing gains.
In the last ten years, ROI has gained much popularity for influencing many asset purchase decisions such as fleet vehicles or equipment to operate a business. ROI has also been used in determining whether or not it was profitable for a company to invest in a marketing or advertising plan. Traditional investment decisions have also been influenced by ROI to determine whether or not the management of stock portfolios, 401ks, and IRA's will have a positive ROI for the company.
ROI is a very versatile term in the business world that can be used for virtually any sector of business in America today. The next time you are thinking about investing in a particular business, stock, mutual fund, marketing, or advertising venture try calculating the total ROI of the investment to determine whether it is worth your money, time, and effort. If the ROI is showing a positive percentage, then chances are it is a good decision. If the ROI is showing a negative percentage then you may want to step back and re-think the decision you are about to make. Business owners all over the world use their ROI percentage to tweak, change, and reform their business process.
While ROI is a very effective and beneficial percentage, most average business professionals do not take into effect inflation, depreciation, or future market conditions. Be sure to consult an economist professional before making any serious decision to your business or income.
In the future we see this handy equation only growing in popularity as more and more often business professionals all around the world are trying to save time and money.
Return-on-investment (ROI) means a lot to companies, especially in economically turbulent times such as these. When an organization invests in a piece of equipment, a new advertising campaign, a property or even an employee, they are very carefully monitoring the money made back to cover the outlay and provide profit as well. Anything that doesn't fit these criteria is quickly cut loose.
Because a corporation invests so heavily in IT, a sharper-than-normal eye is kept on ROI from that quarter. Expenditures for hardware (which can be especially costly), software, programming and maintenance contracts must show substantial returns to receive approval from those ever-watchful bean counters.
One basic factor that can cut straight across the ROI for all of the above is file fragmentation. It greatly slows system performance, which impacts the return for software, hardware, virtually every employee and the company itself when it cannot deliver products and services in a timely manner. It impacts IT because they must chase and "put out fires" rooted in fragmentation. And it also impacts hardware life; a disk drive that must work many times harder to retrieve file fragments, can wear out as much as 50 percent faster.
While many may know that defragmentation boosts performance for all employees and increases computer life, they may not know that it takes the right defrag technology to actually do so.
The defrag technology in common use is scheduled defragmentation. At the time it was invented, it was a significant advancement; prior to scheduled defragmentation, it had to be performed manually during off hours by a live human. It had to be performed during off-hours because the defragmentation process would negatively slow down performance for any users on the system. Scheduling meant that defragmentation could occur unattended during times when computers weren't in use. Now, however, "times when computers aren't being used" are becoming few and far between as many shops remain operational 24X7.
But the problems don't stop there. Scheduling itself must be done by experienced IT personnel—personnel that are now in short supply and under heavy demand. The time spent analyzing and scheduling defrag on the many drives throughout a corporation cuts heavily into ROI potential.
The most significant factor, however, is the fact that scheduled defragmentation is no longer fully performing the function for which it was designed: fully defragmenting the drives and allowing full performance potential to be realized. Because file sizes and disk capacities have grown so dramatically, fragmentation continues to build in between scheduled runs. That means it is still slowing performance and decreasing hard drive life—and decreasing ROI all across the enterprise
For real ROI from defrag, a company needs to turn to an automatic solution such as Diskeeper® software with InvisiTasking® technology. Because it is fully automatic, system performance is maximized. Only otherwise-idle resources are used, so there is not a negative performance hit from defragmentation. Since scheduling is never required, IT hours can be spent elsewhere where they will obtain the highest return. Hardware can achieve its expected lifespan and beyond.