Cost-benefit analysis
It can minimize the risks and maximize gains for projects and organizations.
It uses objective data, it can help reduce biases and keep stakeholders’ self-interest from influencing decisions.
Benefits
- What value will this project create?
- How much money could this project save our organization?
- How much money will it bring in from existing customers?
- How much time will be saved?
- How the user experience will be improved?
Costs
- How much time will people have to spend on this project?
- What will be the on-time costs?
- Are there any ongoing costs?
- What about the long-term costs?
Intangible benefits:
- Customer satisfaction
- Employee satisfaction
- Employee productivity
- Brand perception
Intangible costs:
- Risk to lose intangible benefits
Return of Investment (ROI)
(G-C) : C = ROI
Where:
G: gain C: cost