Information Technology Reference
In-Depth Information
Table 13.3
Costs
Benefits
Cost/Benefit Analysis Table
Development costs
Reduced costs
Personnel
Fewer personnel
Computer resources
Reduced manufacturing costs
Reduced inventory costs
More efficient use of equipment
Faster response time
Reduced downtime or crash time
Less spoilage
Fixed costs
Increased Revenues
Computer equipment
New products and services
Software
New customers
One-time license fees for software and
maintenance
More business from existing
customers
Higher price as a result of better
products and services
Operating costs
Intangible benefits
Equipment lease and/or rental fees
Better public image for the organization
Computer personnel (including
salaries, benefits, etc.)
Higher employee morale
Better service for new and existing
customers
Electric and other utilities
The ability to recruit better employees
Computer paper, tape, and disks
Position as a leader in the industry
Other computer supplies
System easier for programmers
and users
Maintenance costs
Insurance
Figure 13.7
System A
System B
An Illustration of the Point
Evaluation System
In this example, software has been
given the most weight (40 percent),
compared with hardware
(35 percent) and vendor support
(25 percent). When system A is
evaluated, the total of the three
factors amounts to 82.5 percent.
System B's rating, on the other
hand, totals 86.75 percent, which is
closer to 100 percent. Therefore, the
firm chooses system B.
Weighted
evaluation
Weighted
evaluation
Factor's importance
Evaluation
Evaluation
Hardware
35%
95
70
85
35%
40%
25%
75
95
90
35%
40%
25%
33.25
28.00
21.25
26.25
38.00
22.50
Software
40%
Vendor
25%
support
Totals
100%
82.5
86.75
