How can cost-benefit analysis improve the total quality of your program?

2 Estimate costs and benefits

The next step in CBA is to estimate the costs and benefits of each alternative that you are considering for your program. Costs are the resources that you need to invest in your program, such as money, time, staff, equipment, materials, and risks. Benefits are the positive results that you expect to gain from your program, such as revenue, savings, quality, satisfaction, impact, and value. You should use reliable data and methods to estimate the costs and benefits of each alternative, and express them in monetary terms if possible.

3 Compare alternatives and select the best one

Once you have estimated the costs and benefits of each alternative, you can compare them and select the best one for your program. The best alternative is the one that maximizes the net benefit, which is the difference between the total benefit and the total cost. You can use various techniques to compare the alternatives, such as the benefit-cost ratio, the net present value, the internal rate of return, or the payback period. You should also consider the sensitivity and uncertainty of your estimates, and how they might change under different scenarios.

4 Monitor and evaluate your program

After you have selected the best alternative for your program, you need to monitor and evaluate your program to ensure that it is delivering the expected costs and benefits. Monitoring is the ongoing process of collecting and analyzing data on your program activities, outputs, and outcomes. Evaluation is the periodic assessment of your program relevance, efficiency, effectiveness, impact, and sustainability. By monitoring and evaluating your program, you can track your progress, identify problems, make adjustments, and report your results.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?