How can ROI be increased?

Why better decisions are the biggest ROI lever - and why portfolio logic, weighting and AI are replacing traditional methods

Introduction: ROI is not a savings problem, but a decision-making problem

The question "How can ROI be increased?" is one of the most constant management questions of all. It is asked in board meetings, budget meetings, strategy workshops and supervisory board meetings - often with surprisingly similar answers often with surprisingly similar answers: reduce costs, increase efficiency, automate processes, generate more sales.

These answers are not wrong. However, they fall short.

In practice, a clear pattern has emerged for years: companies do not fail because they have too few measures, not because they have too few measures, but because they implement the wrong measures in the wrong and in the wrong order. The ROI falls short of expectations, despite dedicated teams, valid business cases and ambitious goals are in place.

The core of the problem lies deeper. Today, ROI is no longer a problem of insight, but a problem of A decision-making and calculation problem.

This article shows comprehensively how ROI can really be increased - not selectively, but structurally. It explains why classic ROI logics are reaching their limits, why leverage lies in the portfolio and why modern companies are beginning to calculate decisions decisions instead of just discussing them.

ROI rethought: Why classic approaches are reaching their limits

The traditional ROI approach

The traditional ROI approach looks at investments in isolation. A project is evaluated, a business case is drawn up, costs and expected returns are compared. On this basis, a decision is made as to whether the project will be implemented or not.

This procedure is simple, established and seemingly objective. However, this is precisely where the problem lies. Because this approach implicitly assumes:

• that projects are independent of each other
• that budgets have no opportunity costs
• that decisions are static and one-off
• that the best individual decision automatically leads to the best overall decision

These assumptions hardly apply in the reality of modern companies.

The reality of modern organizations

Companies today operate in highly complex systems:

• Projects compete for the same budgets, resources and management attention
• Measures influence each other positively or negatively
• Time plays a decisive role (sequence, delays, lock-in effects)
• Uncertainty is the norm, not the exception

In this reality, a project with good individual ROI can still be part of a poor overall portfolio - and vice versa Portfolio - and vice versa.

From individual project to portfolio: The biggest ROI lever

Why ROI arises between projects

In practice, it has been shown time and again that the greatest ROI lever is not in the individual project, but in the combination of several projects.

Two mediocre projects together can have a greater impact than a single top project, for example because they:

• use the same resources more efficiently
• Diversify risks better
• generate cash flows more quickly
• dissolve strategic dependencies

Conversely, a seemingly attractive project can block critical resources, prevent better Combinations and reduce the overall yield of the portfolio.

The combinatorial reality

Even with a manageable number of projects, complexity explodes:

• 7 projects → 128 possible portfolios
• 10 projects → 1,024 combinations
• 15 projects → over 32,000 combinations

No management team, workshop or Excel model can validly evaluate this number of alternatives validly evaluate this number of alternatives. This is where intuition fails - even with very experienced decision-makers.

Budget is rarely too small - it is incorrectly distributed

The myth of the budget shortage

A common reflex when ROI is insufficient is: "We need more budget." In reality, however, the budget is rarely the bottleneck. It is much more often suboptimally allocated.

• Budgets are updated historically
• politically strong projects are given priority
• ongoing measures are no longer questioned
• new projects are launched in addition to, rather than replacing, alternatives

ROI increase through redeployment

One of the most effective ROI measures is not to increase the budget, but to reallocate it:

• fewer projects, but more effective combinations
• clear priorities instead of broad diversification
• deliberate termination of measures with little systemic effect

Experience has shown that 20 to 60 percent more overall impact can be achieved through better allocation alone can be achieved - without investing a single extra euro.

Weighting: the underestimated key to increasing ROI

Implicit weighting - the invisible bias

Every decision is based on weightings. The problem is not that weighting is used, but that this is usually done implicitly and unconsciously.

• short-term effects are valued more highly than long-term effects
• visible projects are preferred
• Risks are suppressed or generalized
• strategic goals remain abstract

Explicit weighting as professionalization

ROI increases when weighting is made explicit:

• Return, risk, time, strategy and resources are consciously weighed against each other
• Criteria are comparable and consistent
• Decisions become comprehensible and verifiable

Thinking scenarios: Why stable ROI is more important than maximum ROI

The fallacy of "one ROI"

Many business cases work with a single expected ROI value. This suggests certainty, where in reality there is uncertainty.

An ROI that only works under optimal assumptions is strategically worthless.

Robustness as a new target value

Increasing ROI professionally means reviewing decisions across multiple scenarios and preferring solutions that remain stable even in the event of deviations.

Non-decisions: The invisible ROI killer

Delays, parallel projects and a lack of prioritization have real costs: tied-up capital, blocked resources and lost time.

Many successful ROI increases are not the result of new measures, but through reduction, simplification and clear "no" decisions.

AI as an ROI lever: not working faster, but making better decisions

Artificial intelligence does not primarily increase ROI through automation, but through the ability to systematically calculate complex decision-making situations.

• Evaluating many options simultaneously
• Consideration of dependencies
• Optimization under budget and resource restrictions

For the first time, ROI can be calculated instead of discussed.

Conclusion: How ROI can really be increased

ROI can be sustainably increased if companies stop looking for it only in the project - and start optimizing it in the decision-making system.

• Optimize portfolios instead of individual projects
• Make budgets better instead of bigger
• Make weighting explicit instead of implicit
• Calculate scenarios instead of believing assumptions
• Recognize non-decisions as costs
• Use AI to optimize decisions

ROI today is not a lack of ideas - but a lack of calculated decisions.

FAQ - Frequently asked questions about increasing ROI

What exactly does ROI mean?

ROI (return on investment) describes the relationship between the capital invested and the resulting economic benefit. It shows how efficiently investments Generate value.

Why does the ROI fall short of expectations in many companies?

Because decisions are often made in isolation, linearly and without taking dependencies, alternatives and opportunity costs into account, Alternatives and opportunity costs. The greatest ROI loss does not occur not in the project, but in the interaction of several decisions.

Is it enough to reduce costs in order to increase ROI?

No. Cutting costs usually only has a short-term effect. Sustainable ROI is achieved through better Allocation of budgets, prioritization of effective measures and elimination of inefficient combinations Combinations.

Why is portfolio thinking crucial for a higher ROI?

Because ROI is not maximized in the individual project, but in the overall portfolio. Only the optimal combination of projects, timing and resources generates maximum impact maximum effect.

What are typical mistakes when calculating ROI?

The most common errors include isolated consideration of individual projects, missing Opportunity costs, unrealistic assumptions, no scenario calculation and implicit, non-transparent weightings, non-transparent weightings.

What role does weighting play in increasing ROI?

Weighting makes conflicts of objectives explicit. Return, risk, time, strategy and resources become become comparable. Without clear weighting, distorted priorities and suboptimal suboptimal decisions.

Why is a high theoretical ROI not automatically good?

An ROI that only works under ideal assumptions is unstable. Strategically relevant are decisions that remain viable even under changing conditions. Robustness is more important than maximization.

How do non-decisions influence ROI?

Non-decisions tie up capital, resources and time. Delays and parallel projects cause real costs that are rarely visible but massively reduce the ROI.

How can AI specifically contribute to increasing ROI?

AI can help where human decision-making skills reach their limits: with many simultaneous options, complex dependencies and limited budgets. It evaluates portfolios systemically and identifies optimal combinations.

Does AI replace management decisions?

No. AI does not replace responsibility. It calculates decision options, makes effects transparent and supports managers in make well-founded decisions.

Is AI-supported ROI optimization only useful for large companies?

No. The effect is particularly high when budgets are limited, as misallocations have a relatively greater impact there.

How quickly can ROI effects be realized?

Often after the first well-founded portfolio and decision analysis. The greatest leverage usually lies in reallocation and prioritization, not in long-term implementation projects.

How high are the costs of wrong decisions?

Experience shows that uncalculated decisions lead to 20-60% lost impact per year - regardless of the overall budget.

Why is ROI increasingly seen as a governance issue?

Because calculation-based decisions are traceable, documentable and explainable. They reduce liability and reputational risks and increase transparency towards Supervisory boards, investors and stakeholders.

What is the most important lever for sustainably increasing ROI?

Not more data or more projects, but better decisions. ROI is created where decisions are calculated systemically instead of being discussed in isolation.

Closing words by Dr. Kadoshchuk

The question "How can ROI be increased?" has been asked for decades - and yet it is often answered incorrectly. The key error lies in the assumption that ROI can be increased by individual measures, isolated projects or pure cost discipline.

From a mathematical and systemic perspective, ROI does not arise in the project, but in the Decision space between projects. This is precisely where dependencies, restrictions have an effect, Time factors and conflicting objectives that traditional models are unable to capture.

What we are seeing today is not a lack of data, ideas or intuition - but a lack of calculated decisions. As soon as several options for action exist simultaneously, complexity exceeds the limits of human decision-making ability.

A sustainable increase in ROI can therefore only be achieved if decisions are systemic, portfolio-oriented and calculated under real restrictions. Not as a theoretical Exercise, but as an operationally usable basis for decision-making.

Modern decision intelligence makes exactly this possible: it combines strategic thinking with mathematical precision with mathematical precision. People define goals, priorities and guard rails - the system the system does the calculation.

ROI is therefore not the result of hope or experience alone, but of calculable effect.

Dr. Igor Kadoshchuk
Chief Scientist & developer of the decision logic