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COST-BENEFIT ANALYSIS TEMPLATE
INTRODUCTION
A cost-benefit analysis (CBA) is a systematic process for calculating and comparing benefits and costs of a project
or decision. A CBA helps predict whether the benefits of a project or decision outweigh its costs, and by how
much relative to other alternatives. A CBA has two purposes:
1. To determine if the project or decision is a sound investment or decision (i.e., a justification of feasibility
or advantage).
2. To provide a basis for comparing projects or decisions. It involves comparing the total expected cost of
each option against the total expected benefits, to see whether the benefits outweigh the costs, and by
how much.
Using the cost-benefit analysis template in this document will provide cost and benefit information that can be
used to analyze and evaluate alternative approaches to projects or decisions. Since this CBA is tailored for IT, it is
oriented around projects or decisions relating to new systems or processes (although it can be adapted for other
purposes).
This CBA template includes two items: this document and a related spreadsheet that will help to calculate costs
and benefits and to summarize them. The items in the spreadsheet are referred to in appropriate places in the
document.
This document provides information for a basic CBA and also suggestions for a more complex, comprehensive and
advanced CBA. You may use the basic type to develop a standard cost-benefit analysis, or the advanced type to
develop a more detailed analysis. Throughout the document, there are notes as to which sections should be
included for each type.
NOTE: Highlighted, italicized text throughout this template is provided to assist you in creating your cost-benefit
analysis. Please delete all such text, as well as the instructions in each section, prior to completing this document.
Only your project-specific language and information should appear in the final version of this document.
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