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The CIO's Guide to Breakthrough Project Portfolio Performance - Michael Hannan,...
source link: https://nextbigwhat.com/ideas/the-cios-guide-to-breakthrough-project-portfolio-performance-michael-hannan-wolfram-muller-hilbert-robinson/
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Effective ROI
A somewhat improved project-selection metric is called “effective ROI,” as it calculates the actual ROI expected when taking into account the system constraint: throughput per constraint unit per investment (T/CU/I).
At some point, however, most or all of this hidden capacity will get used up, such that any further projects delivering new capabilities into operation will only serve to overload the constraint, degrading throughput. As a result, the only projects that make sense at that point are those that can actually expand capacity within the constraints.
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