An analysis of the benefits of each option minus the costs, indicating the best option to implement.
The purpose of including a cost/benefits analysis section is to demonstrate that sufficient consideration has been given either to alternative ways forward, or to taking no action at all.
In previous sections, the costs and resourcing for the proposal have been set out, and the likely benefits have been itemized. From an organizational point of view, what this does not make clear are the opportunity costs. In other words, what alternative benefits might be realized, and what opportunities could be exploited, if the same level of focus and investment that the business case proposes is deployed elsewhere.
It is unlikely in a digital preservation business case that a simple calculation is possible whereby the costs of action can be set against a quantifiable financial figure for the benefits that may be realized. Calculating the cost of a digital preservation system implementation project should be possible, but understanding all of the ongoing recurring costs is very challenging. Meaningfully comparing those costs with other organizations is extremely difficult. Quantifying tangible benefits is hard, but applying metrics to intangible benefits is impossible.
A balanced narrative is required that acknowledges some of the complexities of coming to a decision. There may well be more indirect costs involved for the organization that are not listed in the section above, such as the effort required across the organization to engage with digital preservation, or the overhead required for successful collaboration. This can be offset with the tangible and intangible benefits, but also some further elaboration of how the proposal positions and enables the organization to succeed.
A cost/benefit analysis should consider how strategically or tactically important it is for the organization to take the steps proposed. It is a chance to reflect, reiterate and summarize the overall short, medium and long-term value of the proposed activity.
BACK: Resourcing/Financial Analysis