How to calculate the return on a data project for your CFO
Your CFO does not buy "best practices." They buy one number divided by another number.
A data project can be brilliant and still not get approved if you do not put it in the language of finance. That language is return. The good news is that the math is simple and honest: you add up what you save, add the risk you avoid, and divide it by what you invest.
01 The formula
ROI = (annual savings + risk avoided) / investment. If the result is greater than 1, it pays for itself in under a year. Simple and defensible.
ROI = (savings + risk avoided) / investment
02 Annual savings
The tangible part: a cloud bill that drops, team hours that get freed up, licenses you no longer need. A real, verifiable sum.
03 Risk avoided
The cost of a likely outage times its probability. An outage of USD 30,000 with a 40% chance in a year is USD 12,000 expected.
Example: USD 12,000/year expected
04 Be conservative
Use the low end of each range. An ROI that overdelivers is far more convincing than an inflated one that disappoints.
// A typical case (illustrative)
Picture a USD 20,000 project. It saves USD 18,000 a year in cloud and hours, and avoids USD 12,000 of expected risk. ROI = (18,000 + 12,000) / 20,000 = 1.5. It pays for itself in eight months. Illustrative figures; the formula is the one you use with your own numbers.
Illustrative example with typical market figures, not a specific client.
// next step
We help you build the ROI case with your figures, ready to present to your CFO.