Return on investment (ROI)
The financial gain from a project relative to its cost, used to decide whether an IoT deployment is worth funding and to compare it with alternatives.
ROI compares what a deployment returns, in savings or new revenue, with what it costs over the same period. For IoT the cost side is the total cost of ownership; the return side is harder to pin down because it comes from avoided events, such as a prevented breakdown, a shipment that did not spoil, or an hour not spent searching for equipment. Good business cases state those assumptions explicitly and measure them during the pilot.
Projects with a clear, measurable return, such as predictive maintenance on a line whose downtime cost is known, or energy monitoring with a visible utility bill, get funded and scaled. Projects whose benefit is “better visibility” tend to stay in pilot purgatory. Choosing a KPI the finance team already tracks is usually the shortest route to an ROI everyone accepts.
Part of the IoT Glossary. Spotted an error or a missing term? Tell us.