Calculating Return on Investment in a Department of Defense Context
AUTHORS: Dr. Eric W. Burger, Dr. Robin Dillon-Merrill, Erika Heeren-Moon, Franco Forti
To determine the value of expenditures, businesses use return on investment (ROI) to measure success over time and eliminate the guesswork of future business decisions. The ability to calculate ROI can be beneficial to any business, regardless of its size or industry. Although the Department of Defense (DoD) uses business analytics in its acquisition process, including market research studies and alternative analyses, it does not aim to maximize profits. The DoD instead seeks to increase operational capabilities, make life safer, establish deterrent positions and reduce risk. This research aims to identify opportunities in the DoD acquisition process where ROI calculations can improve the performance of defense acquisitions in cutting-edge technology. The research team, led by Principal Investigator Dr. Eric W. Burger of Georgetown University, believes that the DoD will be able to accelerate contract development, letting and awarding with higher functionality, and lower total cost by adopting best practices of the private sector and non-DoD public sector ROI calculations.