Browse Definitions :
Definition

cost-benefit analysis (CBA)

Cost-benefit analysis (CBA) is an analytical tool for assessing and the pros and cons of moving forward with a business proposal. 

A formal CBA tallies all of the planned project costs, quantifies each of the tangible benefits and calculates key financial performance metrics such as return on investment (ROI), net present value (NPV), internal rate of return (IRR) and payback period. The costs associated with taking action are then subtracted from the benefits that would be gained. As a general rule, the costs should be less than 50 percent of the benefits and the payback period shouldn't exceed 12 months.

A CBA is considered to be a subjective (as opposed to objective) assessment tool because cost and benefit calculations can be influenced by the choice of supporting data and estimation methodologies. Sometimes its most valuable use when assessing the value of a business proposal is to serve as a vehicle for discussion. 

Cost-benefit analysis is sometimes called benefit-cost analysis (BCA).

This was last updated in August 2011

SearchCompliance

  • information governance

    Information governance is a holistic approach to managing corporate information by implementing processes, roles, controls and ...

  • enterprise document management (EDM)

    Enterprise document management (EDM) is a strategy for overseeing an organization's paper and electronic documents so they can be...

  • risk assessment

    Risk assessment is the identification of hazards that could negatively impact an organization's ability to conduct business.

SearchSecurity

  • cyber espionage

    Cyber espionage, also called cyber spying, is a form of cyber attack that is carried out against a competitive company or ...

  • virus (computer virus)

    A computer virus is malicious code that replicates by copying itself to another program, computer boot sector or document and ...

  • spam trap

    A spam trap is an email address that is used to identify and monitor spam email.

SearchHealthIT

SearchDisasterRecovery

  • risk mitigation

    Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business.

  • call tree

    A call tree is a layered hierarchical communication model that is used to notify specific individuals of an event and coordinate ...

  • Disaster Recovery as a Service (DRaaS)

    Disaster recovery as a service (DRaaS) is the replication and hosting of physical or virtual servers by a third party to provide ...

SearchStorage

  • dropout

    Dropout refers to data, or noise, that's intentionally dropped from a neural network to improve processing and time to results.

  • cloud storage

    Cloud storage is a service model in which data is transmitted and stored on remote storage systems, where it is maintained, ...

  • cloud testing

    Cloud testing is the process of using the cloud computing resources of a third-party service provider to test software ...

Close