Why ROI matters so much for internal products
As internal product managers, we all compete for the same thing.
Budget.
Every year, I write funding requests for:
→ Team capacity
→ New initiatives
→ Technical investments
→ “Nice-to-have” improvements that are actually critical
And every single time, ROI shows up.
If you can’t explain:
→ how much you need to invest
→ versus what the company gets back
Your product is at risk.
Not immediately.
But slowly.
De-scoped.
Deprioritized.
Or quietly shut down.
A quick reality check
ROI is not the only thing that matters.
If your initiative is not aligned with:
→ company strategy
→ leadership priorities
→ long-term direction
No ROI will save it.
But without ROI?
Even strategically important work struggles to survive.
The ROI formula… in PM language
At its simplest, ROI has two sides:
→ Value (what the business gets)
→ Cost (what the business invests)
That’s it.
The challenge is understanding what belongs on each side for internal products.
The value side of ROI
Value in internal products rarely shows up in just one place.
These are the four value types I look at when building an ROI view.
1. Revenue drivers
If your internal product helps revenue-generating teams, it contributes to revenue.
Examples:
→ Removing manual steps in sales workflows
→ Speeding up deal cycles
→ Reducing errors in pricing or contracts
→ Increasing the number of deals a team can handle
→ Enabling better decisions through better data
You’re not saying: “This product generates €X in revenue.”
You’re saying: “This product enables revenue by removing friction.”
That distinction matters. And leadership understands it.
2. Productivity gains
This is the most common and reliable value bucket.
Ask:
→ Who uses the product?
→ How often?
→ How much time does it save per user?
Five minutes saved per person sounds small. At scale, it isn’t.
3. Cost reduction
Examples:
→ Manual work removed
→ External tools or licenses retired
→ Reduced support or incident effort
→ Lower dependency on vendors
This value is usually the easiest to defend.
4. Cost avoidance (often invisible, still critical)
Examples:
→ Security or compliance risks avoided
→ Revenue loss prevented through fewer errors
→ Audit findings avoided
→ Future scalability issues prevented
It’s not flashy. But it matters a lot in enterprise environments.
The cost side of ROI (where many PMs undercount)
When PMs talk about cost, they usually think:
“Development.”
That’s only part of the picture.
For internal products, cost shows up in multiple places.
1. Build cost
The obvious one.
Include:
→ Engineering time
→ Product management time
→ Design and architecture support
I usually estimate this as:
→ people × months × rough cost
Precision is less important than transparency.
2. Change and rollout cost
Internal products don’t ship themselves.
Include:
→ Training and enablement
→ Documentation
→ Stakeholder communication
→ Data migration or clean-up
→ Temporary productivity dip during transition
This is especially important for tools that change daily workflows.
3. Ongoing maintenance cost
After launch, the product still exists.
Include:
→ Bug fixing and support
→ Incident handling
→ Infrastructure and licenses
→ Small but continuous improvements
Leadership cares about this because it compounds over time.
4. Opportunity cost
The uncomfortable one.
Ask:
→ What are we not building if we build this?
→ Which team capacity is locked here?
→ What trade-offs are we making explicit?
You don’t need perfect numbers.
You just need to acknowledge it.
Real-life ROI examples (value vs cost)
Below are three examples that show how I usually phrase ROI in practice.
Example 1: Sales enablement
“This product reduces manual sales administration by ~10 minutes per deal.
At ~2,000 deals per year, this frees up ~330 hours of selling time annually.
At an estimated €X per hour, this equals approximately €Y per year in enabled capacity, compared to an investment of €2,000.
This does not directly create revenue, but it removes friction in the sales process and supports faster deal execution.”
Example 2: Operational automation
“This automation removes ~15 minutes of manual work per case.
At ~8,000 cases per year, this frees up ~2,000 hours annually.
At an estimated €X per hour, this equals approximately €Y per year in enabled capacity, compared to an investment of €Z.
This does not create direct revenue, but it reduces operational load and allows the team to scale without additional headcount.”
Example 3: Reliability or compliance investment
“This investment reduces the likelihood of incidents that cause service disruption or compliance exposure.
Based on comparable past incidents, recovery and mitigation efforts typically cost approximately €Y per year.
Compared to an annual investment of €Z, this reduces downside risk and improves overall operational stability.”
One-page ROI summary
If this felt like a lot to take in, that’s normal.
This infographic is a one-page summary of everything we just covered:
→ how to think about value
→ how to think about cost
→ and how to frame ROI for internal products
It’s the exact structure I use when preparing budget proposals or leadership conversations.
You can download it here and keep it as a reference for your next pitch. [Download link]
