Why is Measuring ROI on an MBA Worth for the Students?

Master in Business Administration (MBA) is considered one of the demanding post-graduate academic degrees that offer a student a variety of career options. One of the major factors when taking into consideration whether or not to get hold of a Masters of Business Administration (MBA) is the charge.

Pursuing MBA courses in one of the premium business institutions of India say in one of the top Indian Institute of Management, or Indian School of Business (ISB), Hyderabad requires at least 20 to 25 lakh of study fees.

One of the factors to decide which business schools to pick is going by ROI (Return of investment). ROI gives clarity about the amount of return on a particular investment and also according to the investment cost. This can give you a better picture 

Determining the potential ROI of an MBA program can also be helpful when deciding which business program to pursue. This also helps in deciding what loan you can pick and how you are going to repay it back.

ROI can be helpful in comparing the efficiency of different investments. This ROI is calculated by dividing the return of an investment by the cost of the investment. The result of ROI is measured in percentage, given as ROI= (Current Value of Investment) / (Cost of Investment).

If you are thinking about getting into one of the prestigious management institutions, you must consider going through its Return of Investment. To get a better clarity over this, let us look at how and why measuring Return of investment can be beneficial for MBA aspirations:

  1. Creation of a valuable network

Pursuing your MBA at a prestigious business school not only gives you a good career opportunity, but they also come with a lot other transcendental value and advantage to an aspirant. During these years at business school, an aspirant gets exposure to big companies and brands.

This opportunity to interact with big brands, corporate stalwart, etc. will help them create a huge network. The value of the network created is immense and which remains with an aspirant for a lifetime. Calculating ROI is thus important to get an insight into the amount you are ready to invest in pursuing such a course.

  1. Alumni connect- an intangible benefit

While pursuing your course at the business schools, you get to connect with your seniors and the Alumni members. You will be benefited immensely if you get the alumni footing filled with engaging, thriving, and receptive people.

This alumni base will become you every next step to help you guide your career to another level. So, while choosing a B School, you better go through is ROI, to get an environment with such intangible benefits.

  1. A guide to total value bid

Choosing a B school you just don’t run after the cost, but you should keep in mind the impressive intangible benefits it provides. Take, for example – you have an option to choose from 2 business schools.

One says ‘ABC’ which offers the course at an annual fee of Rs. 5 lakh and a package of 6lakh but without any impressive intangible benefits. The other one says ‘XYZ’ offers the course at an annual fee of Rs 6lakh and a package of 6lakh along with impressive tangible benefits.

In first thought, you will go after the annual fee and select the ‘ABC’ business school. But what you should really go for is the intangible benefits and select ‘XYZ’. This is because the intangible benefits get your career in a better position for the long run. And this is why the ROI calculation should be kept in mind.

  1. Salary earned while pursuing an MBA

There are many aspirants who opt to have some work experience before pursuing an MBA. Another part is that many aspirate prefer to do the job along with the degree. Though it’s been observed that for cracking an interview with certain business schools job experience adds an advantage to get admissions.

However, it entirely depends upon the aspirant, which road they choose on. So,  while calculating ROI, the salary earned while pursuing an MBA and also pre and post- MBA salaries must also be taken into consideration.

This calculation will give an aspirant an idea towards which college to choose and what method of survival they pick up. The net ROI is important to develop road making signs.

  1. The idea of salary to debt ratio

The decision to pursue an MBA comes with a decision to invest a huge annual fee. Many student opt to take loans for such a huge investment. This comes about the fact that the salary of an MBA graduate crosses these cost invested once they graduate from one of these prestigious business schools.

The idea of salary to debt ratio can be a measure to compare an MBA programme’s ROI to others. And thus this will be beneficial to help choose a better business school.

  1. Future perspective

The future perspective of any graduate will be having a better salary and attractive benefits. This will ensure they become successful in the life ahead. One can compare two business schools using their ROI to calculate the projected 10-year salary with or without an MBA.

A college with better ROI can give you a better picture of roadmap taken to have a better future. A lot of aspirants aspire to do an MBA, but they don’t project the money earned and the amount they invest in future. 

Pursuing MBA from a good business school definitely can land you in better placement package, but at the same time they also give you a better future perspective according to the college they opt for. This will be clearer once a student goes through the ROI measurement and choose the one best suited for them.

  1. The value of being in an entrepreneur world

Whether you have a goal to have a start-up or a job with a big corporate or your very own business, you will require this environment and exposure to choose whatever you want and achieve the peak of excellence using it.

The intangible benefits together the excellence of academics can help you achieve your goal in a better way. And this very goal will be achievable once you get the idea of a good business school using the ROI calculation.

Going through all these points, it is clear how important ROI calculation can be and how important is it to have a definite road map to the future. Pursuing an MBA course at a prestigious business school can cost you a great deal.

It is important that the amount you invest should return to you in multiple times. The package you get after completing the course can be a major decider factor, but at the same times, the impressive tangible benefits can be another gift to it.

Comparing the ROI of different colleges and different streams can give you a better roadmap to your master’s degree and career after that. 

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Source: The Tribune India.

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