Project: CBA (Cost Benefit Analysis)

The Cost Benefit Analysis or CBA is a key aspect in large projects.
I have execute and participate in a fair amount of projects. The question I had was always for example; why did we choose to implement a certain product. Was it the great impression the sales person left behind or is there another subjective reasons.

Well the challenge is to convert these decision making elements into something that is objective and measurable, a CBA.

A CBA is nothing more then a list with costs and benefits by option/product.
You compare these and you have an objective model. With a nice break even point.

Well not exactly.
It is very difficult to (g)estimate costs and benefits. The costs are easier. If we do nothing we spend x. If we implement product "A" we have an initial and variable costs etc.
What are the benefits; if we choose for product "A" we reduce human error and with that we can reduce the department by a number of people. Now we are reducing a department which might result in an opposition from the department manager. Product "A" is now reducing his department and therefore also his power.
And how do we quantify the increase in capacity? Do we have to increase or even keep our market share? And how do we quantify these elements?

As you can see a CBA is difficult, inaccurate and very beneficial.

Source(s):
http://en.wikipedia.org/wiki/Cost-benefit_analysis