Expected Dis-Benefits

A dis-benefit is an outcome perceived as negative by one or more stakeholders.

A) Dis-benefits are actual consequences of an activity, whereas by definition, a risk has some uncertainty about whether it will materialize.

B) Dis- benefit is a part of an investment appraisal

F.i., a decision to merge two elements of an organization onto a new site may have:

Benefits – better joint working

Costs – expanding on of the two sites

Dis-benefits – Drop in productivity during the merger

Timescale

Identifying the timescale requirement for a project can help identify tolerances and timings for benefit reviews.

Corporate and/or programme management will wish to know:

A) Over what period the project costs will be incurred

B) Over what period the cost/benefit analysis will be based

C) When the organization can expect to accrue benefits

D) When the earliest/latest feasible start date is

E) When the earliest/latest feasible completion date is

Costs

The Business Case should summarize the costs derived from the Project Plan together with the assumptions upon which they are based.

The Costs should also include details of the ongoing operations and maintenance costs and their funding arrangements

Investment appraisal

• Investment appraisal is carried out to compare the development, operations and maintenance costs with the value of the benefits over a period of time.

• Its period may be a fixed number of years or the useful life of the products

• Investment appraisal should cover:

1) both the project costs (to produce the required products and the project management costs) and

2) the ongoing operations and maintenance costs.

Major risks

The Business Case should include a summary of the aggregated risks (in the form of a summary risk profile) and highlight the major risks that will have an effect on the business objectives and benefits

F.i., the risk for the office relocation could be impact on business continuity (e.g. loss of key staff unwilling to relocate)

Investment appraisal techniques:

• Net Benefits

• Net Present Value (NPV)

• Payback Period

• Discounted Cash Flow

• Return on Investment (ROI) – Profits or saving resulting from an investment

• Through Life Costs - analyzing the total cost of implementation and any incremental and maintenance costs

• Sensitivity analysis involves setting the input factors to model the point at which the output factors no longer justify the investment.

F.i, the project is worthwhile if it can be completed in four months, but ceases to be worthwhile if

it where to take six months.

Дата добавления: 2015-11-16