Return on Investment: How To Guide Version 4r

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Sheet Description

Enter your project name here

Benefits Enter your list of benefits here and also calculate the potential or actual financial value of those benefits. Enter data into the yellow shaded cells only.

Cost Input your project costs here. These should include both start-up and any ongoing costs. Enter data into the yellow shaded cells only.

Dividend A summary table showing the potential or actual return on the investment you made.

Evidence A blank sheet for you to record the raw data behind the benefits listed on the Benefit sheet.

How do I use this tool?1. Enter your project name in the yellow shaded box

2. Gather your improvement evidence and enter it into the Evidence sheet if you want to (optional)

3. Complete the Benefit sheets

4. Complete the Cost sheet

5. View your ROI on the Dividend sheet

How do I move around?Use the Navigation bar at the top of each screen to move between sheets. Click on the button for the sheet you want such as:

LimitationsWe have deliberately designed this spreadsheet to be as simple as possible. The limitations are outlined below. We recommend that teams use and interpret the results in collaboration with their finance colleagues.

(1) The financial benefits sheet shows the benefits from allocated resources. Estimating actual cashable benefit needs to be done outside of this spreadsheet. Savings from allocated resources can often be cashed through changes to the capacity or structure of the system. Allocated resources can alternatively be diverted to other value adding activity, for example, reducing outpatients appointments can be converted into additional discharge rounds.

(2)The spreadsheet allows for the insertion of one benefit percentage value per year. We recommend that teams conduct a number of “what if” scenarios to cover your full confidence range.

(3) The Department of Health’s standard for discounting benefits over time is 2%, but this will vary by organisation/industry/project depending on individual assessments of project risk. You can change the default setting of 2% on the Divident sheet.

(4) The spreadsheet does not distinguish between revenue and capital expenditure in the costs sheet. This is ok for calculating ROI but recognise that you will need to access funds from separate budgets.

(5) There is no option for intangible benefits.

(6) The spreadsheet does not separate fixed and variable costs over time in detail.

How To GuideHow To Guide BenefitsBenefits CostCost DividendDividend

How do I use this tool?1. Enter your project name in the yellow shaded box

2. Gather your improvement evidence and enter it into the Evidence sheet if you want to (optional)

3. Complete the Benefit sheets

4. Complete the Cost sheet

5. View your ROI on the Dividend sheet

How do I move around?Use the Navigation bar at the top of each screen to move between sheets. Click on the button for the sheet you want such as:

LimitationsWe have deliberately designed this spreadsheet to be as simple as possible. The limitations are outlined below. We recommend that teams use and interpret the results in collaboration with their finance colleagues.

(1) The financial benefits sheet shows the benefits from allocated resources. Estimating actual cashable benefit needs to be done outside of this spreadsheet. Savings from allocated resources can often be cashed through changes to the capacity or structure of the system. Allocated resources can alternatively be diverted to other value adding activity, for example, reducing outpatients appointments can be converted into additional discharge rounds.

(2)The spreadsheet allows for the insertion of one benefit percentage value per year. We recommend that teams conduct a number of “what if” scenarios to cover your full confidence range.

(3) The Department of Health’s standard for discounting benefits over time is 2%, but this will vary by organisation/industry/project depending on individual assessments of project risk. You can change the default setting of 2% on the Divident sheet.

(4) The spreadsheet does not distinguish between revenue and capital expenditure in the costs sheet. This is ok for calculating ROI but recognise that you will need to access funds from separate budgets.

(5) There is no option for intangible benefits.

(6) The spreadsheet does not separate fixed and variable costs over time in detail.

Version 4r

How do I use this tool?1. Enter your project name in the yellow shaded box

2. Gather your improvement evidence and enter it into the Evidence sheet if you want to (optional)

3. Complete the Benefit sheets

4. Complete the Cost sheet

5. View your ROI on the Dividend sheet

How do I move around?Use the Navigation bar at the top of each screen to move between sheets. Click on the button for the sheet you want such as:

LimitationsWe have deliberately designed this spreadsheet to be as simple as possible. The limitations are outlined below. We recommend that teams use and interpret the results in collaboration with their finance colleagues.

(1) The financial benefits sheet shows the benefits from allocated resources. Estimating actual cashable benefit needs to be done outside of this spreadsheet. Savings from allocated resources can often be cashed through changes to the capacity or structure of the system. Allocated resources can alternatively be diverted to other value adding activity, for example, reducing outpatients appointments can be converted into additional discharge rounds.

(2)The spreadsheet allows for the insertion of one benefit percentage value per year. We recommend that teams conduct a number of “what if” scenarios to cover your full confidence range.

(3) The Department of Health’s standard for discounting benefits over time is 2%, but this will vary by organisation/industry/project depending on individual assessments of project risk. You can change the default setting of 2% on the Divident sheet.

(4) The spreadsheet does not distinguish between revenue and capital expenditure in the costs sheet. This is ok for calculating ROI but recognise that you will need to access funds from separate budgets.

(5) There is no option for intangible benefits.

(6) The spreadsheet does not separate fixed and variable costs over time in detail.

CostCost

DividendDividend EvidenceEvidence

How do I use this tool?1. Enter your project name in the yellow shaded box

2. Gather your improvement evidence and enter it into the Evidence sheet if you want to (optional)

3. Complete the Benefit sheets

4. Complete the Cost sheet

5. View your ROI on the Dividend sheet

How do I move around?Use the Navigation bar at the top of each screen to move between sheets. Click on the button for the sheet you want such as:

LimitationsWe have deliberately designed this spreadsheet to be as simple as possible. The limitations are outlined below. We recommend that teams use and interpret the results in collaboration with their finance colleagues.

(1) The financial benefits sheet shows the benefits from allocated resources. Estimating actual cashable benefit needs to be done outside of this spreadsheet. Savings from allocated resources can often be cashed through changes to the capacity or structure of the system. Allocated resources can alternatively be diverted to other value adding activity, for example, reducing outpatients appointments can be converted into additional discharge rounds.

(2)The spreadsheet allows for the insertion of one benefit percentage value per year. We recommend that teams conduct a number of “what if” scenarios to cover your full confidence range.

(3) The Department of Health’s standard for discounting benefits over time is 2%, but this will vary by organisation/industry/project depending on individual assessments of project risk. You can change the default setting of 2% on the Divident sheet.

(4) The spreadsheet does not distinguish between revenue and capital expenditure in the costs sheet. This is ok for calculating ROI but recognise that you will need to access funds from separate budgets.

(5) There is no option for intangible benefits.

(6) The spreadsheet does not separate fixed and variable costs over time in detail.

Return on Investment: Calculate the benefits

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Part One: Ongoing benefits

Benefits By Patient Cost per unit Total Benefit 1 Reduction in length of stay2 Reduction in waiting for appointment3 Reduction in outsourcing to the private sector45

Benefits By Incident or Event Incident Cost Total Benefit1 Reduction in re-admitting patients2 Reduction in adverse incidents (drugs/infection)3 Reduction in unnecessary procedures4 Reduction in cancelled appointments/procedures or in DNAs5

Benefits for Staff Total Benefit1 Reduction in staff sickness2 Reduction in absence3 Reduction in time spent45

Total Ongoing Benefits £0

Part Two: One-off benefitsDescription Value

12345

Total One-off Benefit £0

Patient Value before change

Patient Value after change

Difference Per Patient

How Many Patients Per

Year

Total Difference Per Year

No of Incidents per year before

change

No of Incidents per

year after change

Total Difference Per Year

Value Before in Hours per

month

Value After in Hours per

month

Difference In Hours Per

monthNumber of

Staff affected

Total Difference Per Year

Salary Hourly Rate

How To GuideHow To Guide BenefitsBenefits CostCost DividendDividend EvidenceEvidence

Return on Investment: Calculate the cost of implementation and maintenance

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Ongoing Maintenance Costs

Costs Per Patient Cost per Patient Total Cost per year12345

Cost of Staff WTE Staff12345

Other maintenance costs Total Cost per year12345

Total Maintenance Costs £0

Project Implementation CostsDescription Total Cost

12345

Total Implementation Costs £0

How Many Patients per year

Annual Salary including oncosts

Total Staff costs per year

How To GuideHow To Guide BenefitsBenefits CostCost DividendDividend EvidenceEvidence

230297922.xls

Year 1 Year 2 Year 3 Year 4 Year 5 Total£0 £0 £0 £0 £0

% of total benefit achieved each year

Benefit achieved each year £0 £0 £0 £0 £0 £0One Off Benefits £0 £0Total benefits achieved £0 £0 £0 £0 £0 £0

Year 1 Year 2 Year 3 Year 4 Year 5 TotalCost of implementation £0 £0Cost of Maintaining Change £0 £0 £0 £0 £0 £0Total costs £0 £0 £0 £0 £0 £0

Year 1 Year 2 Year 3 Year 4 Year 5 TotalAnnual Return on Investment £ £0 £0 £0 £0 £0 £0

Discount Factor/Time Adjustment 3.50% The percentage by which the annual return depreciates per year

Net Present Value £ £0 The cumulative return expressed at today's value

Benefit

Ongoing Annual benefit from Benefit sheet

Cost

Dividend

Return on Investment: Evidence sheet

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Title:Description

How To GuideHow To Guide BenefitsBenefits CostCost DividendDividend

DividendDividend EvidenceEvidence