PROJECT JUSTIFICATION: COST BENEFIT ANALYSIS
 
Limit risk with a thorough cost/benefit analysis.  If you are an analyst who has ever found yourself in a position of choosing between proposed projects, let our experienced facilitators help you avoid a disastrous mistake!

This course is currently offered as a 2-day workshop.  Ask about our customization options.

WHO SHOULD ATTEND
Individuals attending this session are involved in one or more of the following areas:

  • Reducing process redundancy.
  • Making system choices based on business need.
  • Comparing system investments with other business investments.
  • Quantifying costs and benefits.
WHAT THE SESSION PROVIDES
This two-day workshop provides each student with the formulas to answer tough questions like: How can I identify and quantify the costs and benefits for a specific system?  How can I document the analysis in common format that can be used for comparison with other projects?  How can I differentiate between tangible and non-tangible benefits?  How can I determine the anticipated payback period for a system?  How can I control the risk of new system development?
 
WHAT PARTICIPANTS LEARN
After attending this session, the participants will be able to:

  • Identify and quantify the costs and benefits of a proposed information system project.
  • Document the costs and benefits in a format that can be used to compare with other business opportunities.
  • Relate cost / benefit identification activities to inform system development activities.
  • Calculate payback periods, return on investment, and net present value.
  • Differentiate between tangible and intangible benefits.
  • Identify the risks associated with establishing costs and benefits.
  • Differentiate between feasibility studies and cost / benefit analysis.
  • Establish performance measures using Earned Value Analysis.
  • Differentiate among estimating types.

 

 

PMI INFORMATION
Program # 1265-CBA PDU: 14
Prerequisites: None

UNIT 1
 Overview of Terms
  • Why Analyze?
  • Difficulties
  • Feasibility Studies vs. Cost Benefit Analysis
  • Placing CBA in the Development Life Cycle
UNIT 2
 What are Benefits?
  • Business and Enterprise Objectives and System Alignment to the Objectives
  • Tangible vs. Intangible Benefits
  • Cost / Benefit vs. Risk
  • Reality of Uncertainty
UNIT 3
 What are Costs?
  • Types of Costs to Consider
  • Savings from Replacing Existing System
UNIT 4
 Documenting Costs & Benefits
  • The Realistic Extent of Detail
  • Essential and Complete Documentation
  • Establishing Performance Measures
UNIT 5
 Standard Comparison Formats
  • The Payback Period
  • Return on Investment (ROI)
  • Net Present Value (NPV)
  • Dimensional Analysis
UNIT 6
 Calculation Adjustments
  • Mathematical Expectation
  • Fixed vs. Variable Figures
  • Life of a System
  • Inflation Adjustments
  • Estimation Types
UNIT 7
 Following Up
  • Importance of Tracking Cost
  • Earned Value Analysis

Exercises