Understanding ROI
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Let's say a corporate company invests in a 3-Day Management training program to improve communication and teamwork among mid-level managers.
The training costs INR 5,00,000, covering the trainer’s fee, materials, and logistics.
The goal is to boost team efficiency, reduce conflicts, and enhance overall productivity.
Outcome:
Post-training, the company noticed a 10% increase in team productivity, leading to quicker project completions and fewer internal conflicts.
This resulted in saving INR 10,00,000 in project delays and other inefficiencies over the next 6 months.
*ROI Calculation
1. Cost of Training (Investment):
INR 5,00,000
2. Benefit (Net Profit from improved productivity):
INR 10,00,000
3. ROI Formula:
ROI = (Net Profit / Cost of Investment) x 100
ROI = (INR 10,00,000 / INR 5,00,00 x 100
ROI = 200%
*Result
The ROI of the Managerial skills training was 200%, meaning the company gained twice the amount invested in the form of productivity improvements.
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