Cost-benefit analysis helps project managers identify the balance between project strengths and weaknesses to make better-informed decisions that increase project viability and efficiency. Using a cost-benefit analysis template can provide a framework that takes the guesswork out of getting started to increase speed and standardize reporting procedures.
In this article, you’ll learn how a cost-benefit analysis supports better-informed decision-making, and we’ll share our free Cost-Benefit Analysis Template you can use on monday.com.
What is a cost-benefit analysis template?
Before we describe the template, let’s define cost-benefit analysis. Cost-benefit analysis is a systemic approach to identifying the strengths and weaknesses of a project, plan, product, or company. You can use this analysis to create a visual overview of an endeavor’s health, compare two or more options, or determine the feasibility of a project or effort.
A cost-benefit analysis helps create a visual overview to ensure total benefits outweigh the costs of a course of action to support better-informed decision-making.
A cost-benefit analysis template is a preformatted tool that helps you create consistent, comprehensive cost-benefit analyses.
Why use cost-benefit analysis templates?
A cost-benefit analysis template is the perfect place to help teams:
- Identify a project’s strengths and weaknesses
- Compare expected monetary costs and benefits to determine project viability
- Create a visual representation of the cost-benefit balance
- Brainstorm intangible benefits
- Identify roadblocks or issues in projects, products, or organizations
The most beneficial cost-benefit analysis templates offer the ability to customize them to meet the unique needs of your company or project.
A cost-benefit analysis template helps identify strengths and weaknesses so you can better determine project viability.One of the best ways to understand what cost-benefit analysis involves and how it works in the scope of business projects is to look at some examples of this type of template used in specific scenarios.
What are some examples of cost-benefit analysis templates?
You can apply a cost-benefit analysis to various sectors and decision-making procedures within your company. Although they’re most often used to determine project viability, you can also apply them to products or a company’s overall financial health.
Cost-benefit analysis for projects
You can use a cost-benefit analysis to determine the viability of a new project or compare two project ideas. This tool lets teams looks in-depth at what a project or effort might cost and what the positive outcomes might be. Brainstorming before you start a project — and pulling multiple team members into the process — ensures you have a comprehensive picture. Using a template to manage the brainstorming keeps the team on track and focused.You can create such a template with monday workdocs, too.
After carefully weighing the pros, cons, financial implications, and contributions to goal progression, you can make the best decision for your company’s overall health.
Financial cost-benefit analysis
A financial cost-benefit analysis looks at the overall financial health of your company, including net present value and cash flow. You may find it helpful to break down the analysis by department to better understand where financial setbacks are happening. Once you’ve determined where setbacks are coming from, you can use this information to make adjustments to increase your financial health.
For example, imagine you wanted to decrease how much of the budget was allocated to your marketing department. You could use supporting documents like the marketing budget and marketing project updates to determine which plan aspects are performing the best. Once you’ve identified those top performers, you can relocate funds and work hours from other projects to those better marketing campaigns.
Cost-benefit analysis for products
A cost-benefit analysis for products can:
- Determine the viability of new project ideas
- Calculate the profitability of newly launched or ongoing projects
- Identify bottlenecks, roadblocks, and other problems pertaining to a specific product
For example, you might want to create an app for customers. Perhaps the marketing and sales departments think an app will open doors for more people into your sales funnel. Before you jump on those hunches, conducting a cost-benefit analysis helps you understand factors such as how much the app product might cost, whether customer and consumer feedback indicates it will be used, and what type of ROI you might get. This helps you make the best business decision possible about the potential product.
Pairing a template with a solution that supports more informed decision-making overall and simplifies project management can streamline vital work processes. Faster, more efficient project development and management can significantly boost your company’s bottom line.
monday.com’s Cost-Benefit Analysis Template
monday.com’s Cost-Benefit Analysis Template provides the framework for faster, more efficient decision-making. Once you’ve determined the viability of your project, you can use monday.com’s Work OS to streamline management processes by:
- Centralizing projects: Our platform lets you manage multiple projects from one user-friendly, customizable dashboard. Identify bottlenecks or roadblocks and quickly see the status of all ongoing projects.
- Automating routine tasks and approvals: Save time and increase efficiency by automating everyday tasks and approvals. When you automate key processes, projects can keep moving forward.
- Collaborating seamlessly: Collaborate with teammates and stakeholders via one platform, reducing the risk of lost emails and stalling projects. Because our Work OS is cloud-based and we have a mobile app, you can collaborate with coworkers in real-time, no matter where they are.
- Monitoring performance: Detailed performance monitoring helps further support informed decision-making. Intuitive dashboards summarize every project’s status and viability while highlighting any key metrics you’ve designated.
Our Cost-Benefit Analysis Template supports these features by ensuring your project starts and stays on track. Other templates support better-informed decision-making, so let’s explore a few additional options that you can utilize to determine project health and viability.
Related templates to cost-benefit analysis template
A cost-benefit analysis template supports better decision-making and helps identify problem areas in your projects, products, or company. Other templates can help determine financial viability and streamline project management processes.
Gap analysis
Our Gap Analysis Template lets you easily compare actual results with predicted results to determine whether you’re on track to achieve your goals. If not, gap analysis can help spot problems so you can identify the best path forward. A gap analysis template expands the focus from just the financial aspects of your organization to include improving your business structure, filling skill gaps, or fine-tuning internal processes.
Fishbone diagram
A Fishbone Diagram Template is a perfect solution for identifying problem causes or helping a team produce ideas. This diagram aims to identify numerous potential causes for a problem or effect and immediately sort them into categories. You can use a fishbone diagram to help fuel brainstorming sessions and keep your team’s creative juices flowing.
Workflow chart
Our Workflow Chart Template helps you visualize complex information and make challenging or technical processes easier to understand. Using a workflow chart can help streamline processes, identify key metrics, and understand problem areas within a process. With all crucial information laid out on one page, it’s easy to identify disruptions and implement necessary modifications.
Charts, graphs, and other visualizations are ideal at helping you communicate costs, benefits, and other elements of a project or business. But before you can do that, you have to know the details behind the visuals. Start with some of the answers in our frequently asked questions about cost-benefit analysis.
FAQs about cost-benefit analysis templates
What are the three components of a cost-benefit analysis?
The three primary components of a cost-benefit analysis include:
- Costs: The cost component is about determining the financial implications of a project or product. Consider costs for materials, man-hours, marketing, overhead, and anything else relevant to the analysis. Add these costs to get your total.
- Benefits: The benefits may or may not be monetary, but if they aren’t, you should assign a monetary value. This component determines what you’ll get back for your financial investment. For example, a marketing campaign may produce sales — a financial gain — but it could also increase online presence, promote branding, and boost your company’s reputation.
- Conclusion: The conclusion component answers whether a project or product is going to produce positive or negative results. You can determine this by deducting the costs from the benefits to see if you’ll see gains or losses.
What is the standard CBA formula?
The standard cost-benefit analysis or CBA formula looks like this: Benefit/Cost or B/C. Once you’ve added the monetary value of your benefits and total costs to undertake a project, you simply compare them to see which is larger.
For example, if you end up with 900/400, your benefits would significantly outweigh the costs and the project should be well worth undertaking. However, if you reverse these numbers to 400/900, your costs would substantially outweigh the benefits and you should probably scrap the idea.
How do you perform a cost-benefit analysis?
To perform a cost-benefit analysis, you should:
- Brainstorm the potential costs and benefits of an endeavor
- Assign monetary values to any non-financial costs or benefits
- Tally the costs and benefits
- Place total amounts into the formula, which is Benefits/Costs
- Compare values to determine whether an endeavor is viable
Make data-driven decisions with monday.com’s Cost-Benefit Analysis Template
Our Cost-Benefit Analysis Template supports better-informed decision-making by providing a visual representation of the overall health or viability of a project, product, department, or company. monday.com Work OS makes it easy to customize the template to better support your industry, project needs, or company’s preferences.
Join the project managers and teams that are already using monday.com’s Cost-Benefit Analysis Template to understand the viability of their projects better. Are you ready to help your projects thrive?
Get started