Return on infrastructure, the new ROI

A new financial metric, called return on infrastructure employed (ROIE) has recognized information technology (IT) as an asset and a service. ROI measurements use discounted cash flow techniques to account for the time value of money and the company's cost of capital as hurdle rate to treat IT investments as any other business opportunity. ROIE metric addresses the problem of meeting the value requirements of IT assets. The ROIE approach to quantifying returns from infrastructure is to borrow from the concept of return on invested capital (ROIC) where net profit after taxes (NOPAT) is divided by total operating capital. The ROIE approach can be used in several ways regardless of the company's net margins, while IT costs need to be managed in a manner that improves the approach.