slide1 l.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
Guide to Benefits Analysis PowerPoint Presentation
Download Presentation
Guide to Benefits Analysis

Loading in 2 Seconds...

play fullscreen
1 / 13

Guide to Benefits Analysis - PowerPoint PPT Presentation


  • 328 Views
  • Uploaded on

Guide to Benefits Analysis. Contents. Why benefits analysis is needed? Identifying the benefits How are benefits identified? Examples of tangible benefits Examples of intangible benefits The basis of Bayesian analysis The Bayesian method Example of Bayesian analysis

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Guide to Benefits Analysis' - Audrey


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide1

Guide to

Benefits Analysis

contents
Contents
  • Why benefits analysis is needed?
  • Identifying the benefits
  • How are benefits identified?
  • Examples of tangible benefits
  • Examples of intangible benefits
  • The basis of Bayesian analysis
  • The Bayesian method
  • Example of Bayesian analysis
  • The Bayesian estimate
  • The next steps
why benefits analysis is needed
Why benefits analysis is needed…
  • Benefits analysis identifies what positive value is expected to be obtained from a project.
  • Helps in the assessment of whether the project is worth doing.
  • Provides a basis for future assessment of whether the benefits were realised.
identifying the benefits
Identifying the benefits

There are two types of benefits:

  • Tangible benefits: where the dollar value of the benefit can be easily assigned because values are readily measurable.
  • Intangible benefits: where the dollar value of the benefit is not able to be assigned.
how are benefits identified
How are benefits identified…
  • The sponsor of the project is the best person to identify the benefits. The sponsor owns the benefits.
  • Consult with a number of different areas that are going to be impacted by the solution to identify additional benefits
  • Brainstorming is a useful technique for identifying possible benefits.

(refer to Guide to brainstorming for instructions on this technique).

examples of tangible benefits
Examples of tangible benefits
  • Reduce clerical labour costs
  • Reduce clerical equipment expense
  • Reduce space & overhead costs
  • Reduce inventory carrying expense
  • Reduce accounts receivable & bad debts
  • Increase sales by 10%
examples of intangible benefits
Examples of intangible benefits
  • Improve customer service
  • Make better business decisions
  • Increase market share
  • Better manage financial resources
  • Improve company image
bayesian analysis
Bayesian Analysis

A technique

that quantifies intangible benefits.

the basis of bayesian analysis
The basis of Bayesian analysis
  • Assumes that out of several identified possible events, one will certainly occur.
  • Uses expert opinion to identify what events are likely to occur and the probability of each.
  • The sum of these probabilities must equal 1.
  • Hence a value can be assigned based on the value of each possible event and the likelihood of it occurring.
the bayesian method
The Bayesian method
  • Identify the most appropriate expert(s)
  • Identify each value outcome that can result from the intangible benefit
  • For each value outcome, the expert(s) identify each of the possible scenarios (events) that are likely to occur as a result of the intangible benefit
  • The expert(s) quantify for each event the probability (a number between zero and 1) that it will happen
  • The probabilities are refined until the sum of these is equal to one.
  • A dollar value is assigned to each event.
  • Multiply the probability of each event by the dollar value of the event and sum the result to produce the Bayesian benefit value.
  • Repeat the process for each year the benefit is being evaluated for.

For each benefit:

example of bayesian analysis
Example of Bayesian Analysis

Project: Advertising campaign

Intangible benefit: improved brand awareness

Value outcome: increased sales

the bayesian estimate
The Bayesian estimate

Project: Advertising campaign

Intangible benefit: improved brand awareness

Value outcome: increased sales

the next steps
The next steps

The values assigned to the benefits are recorded in the business case and entered into the benefits section of the financial calculator for financial analysis.

For further assistance refer to the guide for financial analysis.