Cost-Benefit Analysis

“To do, or not to do, that is the question.” Though we can assume that Shakespeare’s character, Hamlet, was not … Continue reading "Cost-Benefit Analysis"

Overview

“To do, or not to do, that is the question.” Though we can assume that Shakespeare’s character, Hamlet, was not a project manager, a slight change in his soliloquy can put it in the context of the project management discipline.  In essence, every organization must decide if it is in its best interest to pursue any given project – should we pursue this project or not?  Projects are often triggered by customer needs, process improvement initiatives, regulatory requirements, community or competitive pressures, and strategic imperatives.  Regardless of the trigger event, organizations must determine which of these projects are worthy of pursuing.

This one day workshop will provide insight into the background, challenges, methods and tools, and non-financial considerations of a project cost benefit analysis.  Participants will not only learn about best practices associated with proper CBA, they will also have the opportunity to apply lessons learned to realistic cases.

Audience

Project team members and leaders

Length

8 hours

Outline

Cost Benefit Analysis (CBA) Foundations

  • Essential Definitions and Terminology
  • Background and History
  • Project Management Standards Alignment
  • The Business Case
  • Consideration Factors

CBA Methods and Tools

  • Build vs. Buy Decisions
  • Payback Period
  • Opportunity Costs
  • Benefit-Cost Ratio (BCR)
  • Internal Rate of Return (IRR)
  • Present, Future, and Net Present Values

Non-Financial Considerations

  • Business Alignment and Strategic Positioning
  • Trade-Off Analysis
  • Knowledge and Intellectual Property (IP)