article thumbnail

Hospital Budget Systems Are Holding Back Innovation

Harvard Business Review

Despite a one-year payback period and a highly positive net present value (NPV) from this investment, the department will often reject the attractive opportunity. Instead, the finance office can allow the department to keep some of the savings it created, in excess of the original acquisition cost, in future year budgets.

article thumbnail

Why We Need to Update Financial Reporting for the Digital Era

Harvard Business Review

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. Digital companies, however, consider scientists’ and software workers’ and product development teams’ time to be the company’s most valuable resource.

Report 8
article thumbnail

How GE Stays Young

Harvard Business Review

People in finance at GE, typically focused on return on investment and payback periods, love FastWorks because they get a better throughput of ideas. And it has helped not only provide a new product development process, but a role model for a new culture based on a venture model. Partnering: getting ideas from start-ups.