A new kind of cost/benefit analysis

As our culture changes, so does the way our organizations do business. Have you noticed where additional funding is going in your company? Your Human Resources Department and possibly your Corporate Legal Department have increased budgets. Our litigious society is the reasoning behind the legal funding, and the dearth of qualified employees explains why HR needs additional resources.

When was the last time your technology budget was increased? Has anyone offered you additional funding to provide some new benefit to your organization? More than likely, you were asked to provide the benefit with little or no additional funding.

As a result of the lack of monetary resources, Telecom and IT Managers must learn new ways to cost justify purchases. This is often not an easy task. Many people believe that a cost benefit analysis must be done on a spreadsheet. It is time to rethink this assumption.

Today's technology solutions offer many benefits that can be labeled "soft benefits". Just as any new project or purchase can have soft cost, they can have soft benefits. These are often extremely important issues. The problem is that they can be difficult or impossible to quantify.

For example, how do you quantify the benefit of adding "click-to-talk" buttons to web pages so that customers can talk to live customer service representatives by simply clicking a button on your site. You will almost certainly have pleased customers, and they will probably buy more merchandise because you will be making the transaction easy for them. But, you simply cannot put a dollar figure on how much increased business you will get as a result. Even the vendors who sell such solutions do not have enough data yet to provide that type of information. You cannot afford to ignore the issue, though.

A cost benefit analysis may include a spreadsheet, but it can, and often should, be more than that. To truly analyze the potential benefit of a new technology purchase, you need to include the soft benefits. Increased customer satisfaction may not be easily quantified, but it is important nonetheless.

Next time you do a cost benefit analysis simply list the soft benefits. They could include increased employee morale, enhanced impression of your company by customers and the community, ease of doing business, easier access to data, and a host of others.

We tend to think of technology as hard, and cold, but that doesn't mean it can't have soft benefits. After all, people design and build technology for people, and there are always soft issues when people are involved.

Our culture is creating changes in the way our organizations are funded. New technologies are creating changes in the way we do business. Our analysis of these changes and the value they can bring our organizations must change as well.