Cost-Benefit Analysis
Definition
A financial evaluation comparing total implementation costs against projected benefits.
Cost-Benefit Analysis quantifies the financial returns of a proposed solution by comparing costs (technology, labor, training, disruption) against benefits (savings, error reduction, efficiency gains) over a defined period. It produces key metrics: total cost, total benefit, net benefit, ROI percentage, and payback period. It is the language leadership speaks when allocating resources.
Related Tools
Related Terms
Criteria Matrix
A weighted scoring tool for evaluating solutions against defined criteria.
Return on Investment (ROI)
A financial ratio comparing the net benefit of an improvement to its total cost.
Implementation Plan
The operational blueprint for executing the selected solution with tasks, owners, and deadlines.
Where This Fits in the PIPS Methodology
This concept is used in Step 4: Select & Plan — Decision matrices, weighted voting, RACI, implementation planning.
Learn about Step 4Put Cost-Benefit Analysis into practice with PIPS
Get Started Free