A parameter-based estimate of the total cost to develop and cutover the proposed area, based on the present definition of the areas scope, against the quantitative estimate of benefits that could be achieved by the area. The analysis can be done for several scopes, depending on the task involved. Typical scopes are per business area, design area and/or procedure.
Costs accrue from the implementation of an activity or entity type. As with benefits, costs are either tangible or intangible. Tangible costs are directly caused by the implementation of an activity or entity type and can be attached to a direct monetary value.
Other tangible costs include things like training and implementation. Intangible costs are often more important than tangible costs. They include things like disruption to the enterprise and consequential loss of customer service, and non-availability of staff. Accurate costing of systems development from analysis information is generally not possible. Even so, estimates are essential. Most organizations have rules of thumb accumulated by experience, but development costs can change significantly for many reasons, including:
* The programmer or designer employed
* The software in use
* Database size
* Database complexity
* Transaction volumes
* Transaction complexity
* Experience with the technology to be used
Components of the Cost-Benefit Analysis
* Cost-Benefit Summary Report
* Benefit Analysis Matrix
* Benefit Analysis Table
¤ The Cost Benefit Analysis is an optional deliverable.
» Created by task A2.6 Determine preliminary project costs.
Next : D2.1.9
Previous : D2.1.7
Deliverable D2.1 Overview : D2.1
Stage Overview : Project Initiation Stage
Overview : Table of Contents