Home » Glossary » Cost-Benefit Analysis

Cost-Benefit Analysis

Definition

What is the cost-benefit analysis?

A cost-benefit analysis is a systematic method used by organizations to determine which actions should be made and avoided. The cost-benefit analyst adds up the potential benefits of a scenario or activity, then subtracts the overall costs of pursuing that action.

Many consultants or analysts create models to put a monetary value on intangible elements like the benefits and expenses of living in a particular area. A cost-benefit analysis can provide solid results that may be utilized to draw reasonable conclusions about the feasibility and advisability of a decision or scenario.

cost-benefit analysis
What is the cost-benefit analysis?

Benefits of cost-benefit analysis

A company or organization may decide to use cost-benefit analysis as part of its decision-making process for various reasons. First, the cost-benefit analysis helps simplify decisions by reducing them to costs versus benefits.

The cost-benefit analysis enables you to start writing down every possible cost and benefit involved in a project, which can help you find less-obvious aspects like indirect or intangible costs.

Cost-benefit analysis is also data-driven as it allows an individual or organization to assess a choice or potential project without regard to personal biases or prejudices.

As a result, it provides an unbiased and evidence-based assessment of your options, which can assist your company in becoming more data-driven and logical in its operations.

Get Inside Outsourcing

An insider's view on why remote and offshore staffing is radically changing the future of work.

Order now

Start your
journey today

  • Independent
  • Secure
  • Transparent

About OA

Outsource Accelerator is the trusted source of independent information, advisory and expert implementation of Business Process Outsourcing (BPO).

The #1 outsourcing authority

Outsource Accelerator offers the world’s leading aggregator marketplace for outsourcing. It specifically provides the conduit between world-leading outsourcing suppliers and the businesses – clients – across the globe.

The Outsource Accelerator website has over 5,000 articles, 350+ podcast episodes, and a comprehensive directory with 3,000+ BPO companies… all designed to make it easier for clients to learn about – and engage with – outsourcing.

About Derek Gallimore

Derek Gallimore has been in business for 20 years, outsourcing for over eight years, and has been living in Manila (the heart of global outsourcing) since 2014. Derek is the founder and CEO of Outsource Accelerator, and is regarded as a leading expert on all things outsourcing.