The title says it all
Any forensic service provider (FSP) or any forensic manager eventually has to ask the question, “Is it worth it?,” with “it” being some action or undertaking. Do we need a new piece of instrumentation? Do we need to hire more people? Should we expand this unit of the organization or, oh-my-stars-and-garters, the facility? A new lab? These kinds of questions inevitably lead to the existential kind of “Is it worth it?” kinds of internal queries.
I often joke that forensic scientists* are good with numbers and data, until you put a dollar sign in front of the numbers. They then drop a solid 50+ IQ points and become as helpless as a newborn mouse. Genetic profiles? No problem. Calculating the mass-to-charge ratio (m/z) of an ion? Easy-peasy. Is it more cost effective to train staff in-house or with a vendor? [insert needle-scratch here]. Needless to say, these kind of questions about the return on investment (ROI) are significant for any organization and happen far more than you might imagine. Managers face them almost daily.
What the heck is an ROI?
Return on investment (ROI) is a metric that measures the profitability of an investment by comparing the gain or loss to its cost, often expressed as a percentage. The higher the ROI, the more favorably the investment's gains compare to what it cost. As a performance metric, ROI is used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments. ROIs should be done prospectively in advance of a decision. I mean, why make a choice without data, right? You wouldn’t do that with an analysis, would you? Or in your daily life, yes?1 Of course you do2, so why not with something super-important at work.
In the finance and business worlds, ROI and other related metrics provide a snapshot of profitability, typically as a rate of return, that is, how much money (profit) did you make on that investment. Typically, you’ll see an ROI calculated for “Year 0” and then two to three years’ projected return.
There are some issues when dealing with ROIs. First, and, for our purposes, most importantly, ROIs by themselves do not account for the political, environmental, social, and technological (PEST) environment of an organization.3 If you don’t figure out a way to take into account the short- and long-term impact of these factors, you’re planning for a future that won’t exist; making a decision in a bubble is almost as bad as not making one at all. A good example would be ripping your 5-crates-of-CDs music collection into a cloud-based music library only to have a future update wipe all your music out of said library.4 And, yes, you’ve sold your CDs5; even if you hadn’t, they might be susceptible to data rot. In making that choice, it might have been a good idea to ask yourself, “How might it not work in my favor if I, in essence, give away all my music?”. Is the return (having music with me all the time in portable devices) worth the investment (I no longer own my music selections6)? Given the outcome, the answer is “No.” You can’t predict the future, but you need to consider the possibilities.
How do you calculate an ROI?
As a decision tool, ROI is simple to understand. The equation itself is ((gain from investment - cost of investment) / (cost of investment)) * 100. Here’s an example:
You want to purchase a new instrument that costs $100,000 and you figure that the gain from that investment after five years will be $125,000. Thus, the ROI is 25%.
Because it is so basic, in theory, you can freely choose variables, like length of time, overhead cost, or cost or revenue components. While that’s a plus, it’s also a minus: You need to pick the right ones for the question you’re asking. The assumptions you make about the inputs determine what you get as an output, like most things. What is “gain”? What is “the cost of investment”? How are you measuring these? In the above example, where did the $125,000 gain come from? Your decision will be determined by how aggressive your assumptions are, how supported they are, and how you plan to validate them.
How do I know what values to use?
ROI alone is necessary but not sufficient to make your case for the investment. You need to include the underlying data and assumptions that forms your chosen inputs. First of all, the cost side. What are all the costs? It’s not just the purchase price of the instrument ($100,000). The costs could include:
Installation costs (or facility refurbishments)
Personnel (even if you don’t hire someone new for it)
Maintenance costs or contracts
Overhead costs (keeping the electricity or gasses flowing for it to work)
Another assumption: How often are you going to use this new marvel of technology? That will directly influence the consumables cost per test you conduct. Spending $100,000 for 10 cases per year isn’t a good investment unless you charge a lot for those cases…which you don’t because you’re probably a government agency.
Flip that coin: What about “gains”? As said government agency, you don’t make a profit, so how do you measure gains from an investment? A value driver is a quantifiable goal that your investment should help you achieve. Value drivers are often framed as outcomes, like “reducing cost per test,” “reducing turnaround time,” or “increasing cases per FTE.” Always use at least three value drivers; if the first one doesn’t convince the decider, you have two more.
Build your business case for your instrument by:
Connecting your challenge to at least three relevant value drivers.
Reducing cost per test by $5 each,
Reducing turnaround time by 15%
Increasing cases per FTE by 12%
Build a simple model for each driver, leveraging some known data and some assumptions.
The new instrument uses fewer consumables and less energy/gas (overhead),
The new instrument also has features that speed up analysis per sample,
This, in turn, means each FTE will get more samples out of the instrument at a lower cost per test conducted with reduced overhead.
Scope the technology sufficiently to build out the denominator.
This means knowing where you are now with your current instruments in terms of cost per test, turnaround time, and cases per FTE. This would all be done for you if you participated in Project FORESIGHT.
Make your presentation.7
ROI in forensic science*
You. Are. SO. LUCKY. All this has been worked out in detail for you already! Congratulations, you’re a winner. Project FORESIGHT has more data about how FSPs work than anyone has ever had, ever. Really. We’ve been doing this for about 15 years. In a couple of papers, my research partner and friend, Dr. Paul Speaker, has detailed the tricky proposition of what ROI looks like in Forensic Land.8 Forensic science has four main value drivers:
Efficiency – Are staff productive? Think: tests per full-time employee.
Quality & Risk Management – Are more tests being done per case to ensure accuracy?
Analytical Process – How is the budget distributed (personnel vs. equipment)?
Market Conditions – What are the local costs of hiring and retaining staff?
This breakdown9 helps FSPs see why their ROI looks the way it does—and what levers they can pull to improve it. Like the $100,000 instrument example, maybe you need better equipment to boost productivity or review testing policies that add cost without adding much value. But that’s only the inside picture.
Paul did a brilliant thing: He reached out to public health labs, which also provide scientific10 services to the public, much like FSPs. He and his colleagues drewn a brilliant comparison to public health labs, where ROI isn’t just about cost per test—it’s about the societal return. In public health, that could mean lives saved or illnesses prevented. In forensic science*, it's things like crimes solved, suspects eliminated, and wrongful convictions avoided. Those outcomes have real, measurable value—even if it’s not always reflected in a line-item budget.
Using Project FORESIGHT’s tools, FSPs can calculate not only internal ROI (how efficiently they run) but also external ROI (what value they provide to the justice system and society, that is, how much good do you do). This dual view is powerful. It gives lab managers concrete data to guide internal improvements and compelling evidence to justify funding.
What’s my ROI for reading this?
First, start looking for ROI questions or issues. What is this worth? What happens if we don’t do this? What does that really cost us? It could be at work or at home.
Second, the next time you identify one for which you have some data, try working it out on paper. List your assumptions, use methods to help you think it through.
Third, go back and check your assumptions and your work. What did you miss? Explain it to someone else, like your 11-year-old or your grandmother. What are their comments or concerns? This helps you hone your reasoning and communication.
ROI is super important, especially as budgets and grants get wonky and scarce. The better you get at this, the more resources you’ll gain, and the better you’ll manage those resources to benefit not only your organization but your community and society at large.
I expect your answer is “Yes, in fact, I do make choices of high import and long-term consequences based on the feeblest of data, if I use any at all, basically on the lightest breeze of a whim” but, lie to me. Say “No,” and don’t break my heart.
Thank you.
A PEST analysis is a business tool that helps companies identify and assess external factors that may affect their profitability. It should be used in conjunction with a Strengths, Weaknesses, Opportunities, and Threats (SWOT) assessment. The SWOT should come before the PEST, unlike in real life. Sometimes, the jokes write themselves.
This happened to me with a company I won’t name but rhymes with “crapple.”
You moron.
And it would have been not just financially impossible to re-purchase my 5-crate collection but also practically. Many are out of print and I have very eclectic tastes in music. I once purchased CDs of Lyle Lovett, Nirvana, Tom Waits, and shakuhachi (Japanese flute) music. At the counter, the clerk looked at me and said, “I assume these are gifts for other people. Would you like them individiually gift-wrapped?”. 9/10 for snark.
Follow the 5/5/5 rule: No more than five words per line of text, five lines of text per slide, or five text-heavy slides in a row. Use images, but no cartoons. And color. Management loves color. They also love cartoons but those aren’t really professional anymore.
Speaker, P.J., 2009. The decomposition of return on investment for forensic laboratories. Forensic Science Policy and Management, 1(2), pp.96-102 and Kurimski, L.M., Speaker, P.J. and Bassler, J.R., 2017. Project FORESIGHT and return on investment: forensic science laboratories and public health laboratories. Forensic Science Policy & Management, 8(1-2), pp.1-12. Contact the Forensic Research Library if you want copies of those articles.
Which Paul and his finance colleagues call “decomposition.” As a forensic anthropologist, I find this mildy humorus.
No * here. Ahem.