ROI (Return On Investment)
Return on investment (ROI) measures the effectiveness of an investment by ascertaining the net gain or loss relative to the amount of money invested. In procurement, this typically refers to the cost savings achieved through a particular purchase compared to the initial cost. This calculation helps organizations and businesses assess the efficiency and potential profitability associated with different investments and purchases, thereby enabling them to make better management decisions. By analyzing ROI, procurement teams can identify opportunities to increase operational performance and budget efficacy.
