Cost Benefit Analysis

As per my comprehension, it is a structured formula to achieve cost benefits by cutting down on certain tangible and intangible expenses, also it provides a framework to convince the upper level management to imbibe a new way of working, a technological up gradation or any such progressive change which would help the company increase it’s efficiency. Technological advancements make CBA an indispensable part of business process as after some time technologies get obsolete ands they have to be replaced by new ones in order to maximize profits. Through preliminary survey & feasibility study RIM make sure that their CBA report is fully backed by facts and figures and justifies the need or opportunity to CBA.


Critical analysis of CBA
Excessive focus on CBA and cost cutting can lead to depreciation in quality of work
Eats up room for creativity/innovation.
Not fully equipped to analyze intangible attributes.
If organizations focus a lot on hard savings they might lose on soft savings.
The research, survey, study and report of CBA should be made with utmost caution otherwise it can backfire.
Shouldn’t be carried out at such a level that it deprives the employees from basic facilities.
As it also focuses on reducing production time it will increase pressure on employees.

Media Industry & CBA
It is required as technological up gradation is quite rapid.
isparity is quite evident in Media Industry, varied pay scales being a proof. CBA can provide a tructured framework which can give a blueprint of budget allocation.
Lack of funds lead to lack of creativity & Media industry is considered “Creative”.
Applying CBA to advertising industry would probably hamper it as impact of an ad cannot be measured by any tool precisely, when a producer/company/firm would compare his advertising expense against the sales of the product. He will definitely find himself in loss.

CBA seems to be a rational business technique, but needs to be applied with proper homework, caution and purpose. Execution of the CBA techniques have to be as per the plan or it can yield undesired results.