A CBA can be used to compare completed or potential processes, or to estimate the value against the risks of decisions, projects, or processes. This powerful, efficient tool can be used by your team in commercial transactions, business decisions, and project investments.
Advantages of using a cost benefit analysis
Organizations face many high-stakes choices. It is likely that your competition is taking into account many of the same factors that you are. This is why it is essential to approach decisions in a systematic and methodical way.
A cost benefit analysis lets you compare the possible costs of a decision without having to go through with it. This way, you and your team can tell if the benefits are worth the costs. And if you have to go through with the decision anyway, the analysis can give you an idea of how long it will take to make up for the costs.
Perform your own cost benefit analysis
If you're looking for a way to create and share a cost benefit analysis with your team, FigJam's whiteboard tool is the perfect canvas. Start by selecting this Cost Benefit Analysis Template and then follow these 4 simple steps:
Step 1: Identify the costs and benefits of your project. Make a list of each, and try to anticipate any that your team might not have initially considered. Also, consider whether the costs and benefits will change or grow over time.
Step 2: Try to establish negotiations regarding the following: What will be the monetary cost of hiring new employees and training them? How will productivity be impacted while new hires are getting up to speed? If a new feature is introduced, will the system experience an outage that impacts customers?
Step 3: Place a price on the benefits. Try to predict how much money you could make, but don't only focus on that. Consider other benefits that aren't financial, like how good it would make people feel or how it would help the environment.
Step 4: Compare your costs and benefits. Which seems greater? How long would it take to repay any costs?
