Project Help - cost effectiveness

2cool2cool Feels At HomePosts: 53Registered
Hi I have done loads on my unit 10 project and my tutor said I have nearly completed it but I need to do a cost analysis or cost effectiveness part?

Could someone please help as I dont know what to write for that. If anyone has done something for it please could you help.

Your help would be very much appreciated. Thank You

Comments

  • NBBNBB Well-Known Posts: 125Registered
    Hi,

    I based my project on purchase ledger which the payment terms are set to 90 days, we have a procurement card for low risk low value purchase order's. So for the cost effective bit I explained how the Procurement Card offers the opportunity to improve the cost effectiveness of the purchasing procedures by reducing the volume of small value purchase orders, invoices, associated paperwork, and enables electronic capture of invoice information without compromising control and at the same time, will benefit from quality management information

    That is the example I used for cost effectiveness anyway!!
  • JanJan Experienced Mentor Posts: 654Registered
    I looked at the accounting software in place - it had cost thousands to put in and £600 per annum to get someone in to close off the yearend. Looked at the costs both in time and money saved by introducing a new system. Had to be careful though - if it saved me too much time they might have reduced my hours!
  • 2cool2cool Feels At Home Posts: 53Registered
    How many cost effectiveness scenarios have you done in your project
  • vishavisha Well-Known Posts: 218Registered
    A measure of cost effectiveness is obtained by measuring COSTS against objective OUTCOMES.

    Analysing cost effectiveness of a recommendation can be evaluated by reviewing a number of alternatives in implementing that recommendation and considering other alternatives to improve the outcome. Identify the best alternative in terms of OUTCOME and COSTS.

    Therefore you need to identify the Cost and Outcomes of your recommendation:

    Outcomes are the result of your recommendations………………………Costs could be

    Employees paid on time………………………………………………..............…BACS cost against Use of Cash costs
    Invoices produced and posted on time…………………….....……………..Software costs
    Debtors chased on time……………………………………..............……………Extra Staff / Overtime /
    Goods delivered on time………………………………………..........…...……...Use of Courier company
    Management accounts produced accurately and in time ……………..Computers/ staff / overtime etc

    Your analysis does not have to be Quantitative but can be Qualitative. Therefore if your recommendations are to change work practice then there may not be an implication on increase or decrease of costs but certainly improvement in the quality of the objective outcome.
  • speegsspeegs Experienced Mentor Posts: 854Registered
    Visha's post is fantastic, but I would like to add to it further.

    You could also consider the cost benefits of related to contingency planning. For example:

    Training your staff = Staff feel more motivated and valued, staff become multiskilled and can cover for each other.

    Purchasing off-site location servers for backups and laptops for staff = If there was ever a power cut, your staff could log into the server remotely from laptops reducing the amount of downtime. Staff can also work more flexibly by being able to take their laptops home and work from home.


    This is the great things about the cost benefit analysis. There are so many options you can choose from. Everyone who has put something above my thread is 100% correct in what they recommend and everyone had a different idea. This is what makes this section very straight forward, once you figure out what you are actually be asked for.:thumbup:

    Finally, well done for nearly finishing your project. :thumbup: Good job!

    Speegs
  • 2cool2cool Feels At Home Posts: 53Registered
    Thank you very much to all of you!!!

    Please if anyone else has any ideas keep on posting. The information that has been given above has been a huge help thank you very much
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