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COST - BENEFIT ANALYSIS
Concept  of  Cost – Benefit  Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],BENEFITS  >  COSTS
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Cost  Benefit  Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Cost – Benefit  Analysis ,[object Object],[object Object],[object Object],[object Object]
Process  of  Cost – Benefit  Analysis   : - ,[object Object],[object Object],[object Object],[object Object],[object Object],Identification  of  costs  &  benefits Evaluation  of  costs  &  benefits Choice  of  System
[object Object],[object Object]
Costs  &  Benefits  of  Information  Systems COSTS BENEFITS Hardware Tangible Telecommunications Increased  Productivity Software Low  Operating  Costs Personnel Reduced  Workforce Lower  Computer  Costs Accessories : Lower  Outside  Vendor  Costs Computer  Forms Reduced  rate  of  growth  in  expenses Computer  ink/ribbon Reduced  Facility  Costs UPS Intangible Improved  Organizational  Planning Services  :  Increased  Organizational  Flexibility Insurance Improved  Decision  making
Maintainance Improved  Operations Improved  Asset  Utilisation Physical  Facilities : Enhanced  Employee  Morale Building  Increased  Job  Satisfaction Furniture Higher  Customer  Satisfaction Improved  Organizational  Image
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Cost – Benefit  Analysis
Cost - Benefit  Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Cost - Benefit  Analysis ,[object Object],[object Object],[object Object],[object Object],[object Object]
CBA  via Portfolio Analysis for Information System ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Cautiously  Examine Identify  &  Develop Avoid Routine  Projects
CBA  via Profitability Index for Information System ,[object Object],Profitability  Index =  PV of  Cash  inflows Investment Payback  Period  =  Total  Initial  Investment Discounted  Annual  Cash inflow
CBA  via Accounting  Rate  of  Return  for  Information System Accounting  Rate  of  Return  =  Average  Net  Return Total  Initial  Investment
Problems  Associated  with  CBA ,[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object]

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Cost-Benefit Analysis

  • 1. COST - BENEFIT ANALYSIS
  • 2.
  • 3.
  • 4.
  • 5.
  • 6.
  • 7.
  • 8. Costs & Benefits of Information Systems COSTS BENEFITS Hardware Tangible Telecommunications Increased Productivity Software Low Operating Costs Personnel Reduced Workforce Lower Computer Costs Accessories : Lower Outside Vendor Costs Computer Forms Reduced rate of growth in expenses Computer ink/ribbon Reduced Facility Costs UPS Intangible Improved Organizational Planning Services : Increased Organizational Flexibility Insurance Improved Decision making
  • 9. Maintainance Improved Operations Improved Asset Utilisation Physical Facilities : Enhanced Employee Morale Building Increased Job Satisfaction Furniture Higher Customer Satisfaction Improved Organizational Image
  • 10.
  • 11.
  • 12.
  • 13.
  • 14.
  • 15. CBA via Accounting Rate of Return for Information System Accounting Rate of Return = Average Net Return Total Initial Investment
  • 16.
  • 17.