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ROI is a way of measuring the monetary value of an investment. ROI is expressed as a percentage, and it is based on the value of some aspect of the business after an investment when compared to its value before the investment. The return, or increase or loss, after an investment divided by the cost of the investment is the ROI. The formula for ROI is as follows:

The value of investment is measured for a fixed period of time, such as 1 year or 3 years. For example, if a company invests $100,000 in new equipment and this investment generates a value of $145,000 over 3 years, then the ROI is 45 percent over 3 years.

In cloud migration projects, the investment includes the cost of cloud services, employee and contractor costs, and any third-party service costs. The value of the investment can include the expenses saved by not replacing old equipment or purchasing new equipment, savings due to reduced power consumption in a data center, and new revenue generated by applications and services that scale up in the cloud but were constrained when run on-premises.

Success measures such as KPIs and ROI are a formal way of specifying what the organization values with respect to a project or line of business. As an architect, you should know which success measures are being used so that you can understand how the business measures the value of the systems that you design.