This post is part of a series that explores questions that a good business analyst will ask. This is Question 7 of 8.
How Much Will This Cost?
ROI is on everyone’s lips. Return on Investment. What am I going to get for giving up x? When it comes to cost the Business Analyst can offer two solutions:
Reduce Costs or Increase Benefits.
The reduction of costs can come from the amount of work put into a project. Remember that discussion on resources? Well, resources play an important role when it comes to cost reduction.
One company I worked for produced websites for their clients. The only problem was client after client would come back and say, you’ve made this error.
What they were missing was critical. They didn’t understand how important cost reduction was.
They also didn’t understand the importance of need prioritization based on value.
Without the Quality Assurance and Quality Controls in place, projects were guaranteed not to be streamlined.
Cost is also not a one time occurrence on a project. The time it takes for a technician to complete a task that was previously missed takes time from other projects in the silo.
Sometimes, as in the case of the QA and QC additions, what reduces costs also increases new benefits. Actions that were priorities were now given more weight.
Laura Brandenburg is well known Business Analyst who truly understands the value that BAs offer their employer. She discusses the formula:
|Value achieved through the solution- Cost of the solution = Return on Investment.|
When you’re dealing with costs, think about it in the following ways:
- Think in costs holistically. Understand that costs are not limited to just one project.
- Move beyond the thinking that only people have costs associated with them. Resources, opportunities and interaction all have costs associated with them as well.
- Scale your costs according to the size of the project and the stakeholders associated with the project. One size cost projection does not fit every product line solution.
Understanding the role of costs takes time and it’s time well spent. To learn more about Business Analysis and ROI, read Laura Brandenburg’s article, How Does Business Analysis Create Value?