1 min lesson
Part two: a defensible ROI model
Connect "Make every input an explicit, conservative assumption a CFO could challenge" to the decision you would make.
Step 1 of 3
Part two: a defensible ROI modelGrounded in assumed discovery numbers, stated as assumptions
Make every input an explicit, conservative assumption a CFO could challenge. The credibility is in showing your math and using their numbers, not in the size of the output.
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Advanced table
Net case = productivity value minus seat cost
- Input
- Engineers in scope
- Assumption
- 150 (phase one)
- Source
- Discovery: platform + 3 product teams
- Input
- Fully-loaded cost / eng / yr
- Assumption
- $180,000
- Source
- Stated by VP Eng
- Input
- Time saved / eng / week
- Assumption
- 2.5 hours (conservative)
- Source
- Their own pilot read, discounted
- Input
- Cursor cost / seat / yr
- Assumption
- Per published pricing
- Source
- List, pre-negotiation
- Input
- Year-1 productivity value
- Assumption
- ~$1.6M (150 × $180K × 5% reclaimed)
- Source
- Model output, shown step by step
| Input | Assumption | Source |
|---|---|---|
| Engineers in scope | 150 (phase one) | Discovery: platform + 3 product teams |
| Fully-loaded cost / eng / yr | $180,000 | Stated by VP Eng |
| Time saved / eng / week | 2.5 hours (conservative) | Their own pilot read, discounted |
| Cursor cost / seat / yr | Per published pricing | List, pre-negotiation |
| Year-1 productivity value | ~$1.6M (150 × $180K × 5% reclaimed) | Model output, shown step by step |
Net case = productivity value minus seat cost; lead with payback period, not gross value.
Before you present, halve every favorable assumption and check the case still clears. If your ROIReturn on Investment. The value gained versus what it cost, the language an economic buyer funds deals in. Press Enter for the full definition. only works at 4 hours saved per week, it's not defensible - a skeptical VP will run it at 1 hour and watch it collapse. State the conservative version as your base case and keep the upside as upside. "Even at one hour a week, payback is under a quarter" is a sentence that survives the room.
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Optional practice
Practice: Part two: a defensible ROI model
QYour ROIReturn on Investment. The value gained versus what it cost, the language an economic buyer funds deals in. Press Enter for the full definition. model shows a $3M year-one value, but it assumes 5 hours saved per engineer per week. The work-trial reviewer is a skeptical ex-CFO. What should you change before presenting?