Thursday, July 10, 2008

Quality Planning Benefit/Cost Analysis

Since it costs money to implement project quality planning in your organization, it's important to understand the benefits of quality planning, so you can justify these costs if necessary. In addition, knowing the benefits of meeting quality requirements makes tasks more meaningful and successful. The four main benefits of meeting quality requirements on your projects are:
  • less rework
  • higher productivity
  • lower costs
  • better customer satisfaction.
Weighing benefits against costs can help with the major decision-making issues of a project. A benefit/cost analysis involves estimating the costs and benefits of meeting quality requirements, and then assessing the available project options. The benefits, of course, should outweigh the costs. The general procedure for analyzing benefits and costs is explained below.
  • Analyze the plan, decision, or process by examining its activities and events.
  • Calculate or estimate the benefits and costs related to each element.
  • Compare the sum of the benefits and costs.
Subtracting the costs from the benefits should always produce a positive number. A negative number indicates the benefits are not worth the expense.

Benefit/cost analysis is a useful tool for project quality planning. It's a simple procedure you can use to determine if the benefits of quality planning outweigh the costs.

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