utilizing cost benefit analysis to select the best solution 1
Utilizing Cost Benefit Analysis to Select the Best Solution
Technology is often used to help address problems or improvement opportunities in many businesses. In order to help a business in this process, one looks for multiple alternatives to understand what options are available before reaching any conclusions. It is important to do this research, and base the final decision on the available alternatives.
Every business has its particular goals, work practices, budgeting criteria, and many other factors that need to be identified when trying to guide the selection of alternatives through the cost benefit analysis. Once the alternaitves are identified, these need to be compared, based on the decision criteria of the business. Imagine if the most important criteria (attribute) is budget, and money matters, the ranking of your choice will be completely different than when the top criteria (attribute) is good environmental choices. Based on the different criteria you would rank solutions differently, that is why this part of the analysis is so important.
To make this process even more complex, benefits and costs can be either tangible or intangible. Sometimes we might not know in dollar value what a benefit to the environment really is when implementing a solution, but the benefit is undoubtedly there, so it needs to be taken into consideration. This is an intangible benefit, much like customer satisfaction, for example, a very important benefit to many businesses. Other cost examples, like the cost of internet usage, are tangible, they can be looked up or estimated fairly easily based on pricing from various providers.
Select your own example or use one listed below. All solutions you research have to use some IT technology.
1. Music
Problem/Opportunity: You have found out that music can contribute to the productivity of your employees and you would like to give each person a chance to listen while they work. Your company is a start-up with 10 people.
Research and compare technologies to accomplish this.
2. Ordering and Inventory
Problem/Opportunity: Your restaurant is having inventory problems because employees are tracking food purchases and usage by hand. You need to find a better way, and decide to use technology to do this. You employ 30 people.
Research and compare technologies to accomplish this.
3. Scheduling
Problem/Opportunity: Your gym is always in trouble scheduling workers. Your managers track everybody from a spreadsheet, so it’s error prone, and employees are late or don’t follow the sheet correctly. You need to find a better way and decide to use technology. You employ 100 people.
Research and compare technologies to accomplish this.
4. Grandma Phone Plan
Problem/Opportunity: Your grandmother wants to get a cell phone for the first time. You are tasked with finding the right plan and phone for her. She is completely in the dark about phones and their technology.
Research and compare technologies to accomplish this.
5. Or generate your own idea based on a job you have had.
Our Assignment:
After finding possible solutions to your selected problem/opportunity, use a Cost-Benefit Table to determine which solution best solves the problem. Conclude which solution you would recommend for your client based on the data in your table.
You can also use the hand-out as a model: Tutorial C or draw your own table in a similar way.
Generate a minimum of 3 potential solutions to the problem you have selected.
Submit as part of your assignment:
1. Who is your Client _______________________________
Give short Company Background and Problem identified at this company (or use one given – copy from above)
2. Ranked Criteria (product attributes that are critical to the business ) for picking these solutions.
Use the criteria and show visually how you are comparing with this criteria (color or number the cost and benefit to correspond with each criteria you are showing in your table)
3. Show a table with each solution’s cost and benefit details.
(a minimum of 3 alternatives required)
Remember all these alternatives need to be IT technology.
4. Conclude which of the alternatives you would recommend for your Client.
