Cost-Benefit Analysis
Cost-Benefit Analysis lists what the client will spend versus what they will gain. Required by most BSIT/BSIS programs.
Cost-Benefit Analysis
What this section does
Compares the costs of building and running the proposed system against the benefits the client will gain. Helps the panel see whether the project is economically defensible.
Table 3.4 - Cost Analysis
| Item | One-time (PHP) | Recurring (PHP) |
|---|---|---|
| Development (sweat hours) | 206 hr equiv | - |
| Server (i3, 4GB, 256GB) | 25,000 | - |
| UPS | 3,500 | - |
| Tablet (Android 11) | 8,000 | - |
| SMS gateway credits | - | 1 / SMS |
| Internet (existing) | - | 1,500 / month |
| Electricity (delta) | - | 200 / month |
| Domain + SSL (optional) | 1,200 | 1,200 / year |
| **Total** | **37,700** | varies |
Table 3.5 - Benefit Analysis
| Benefit type | Item | Estimated value |
|---|---|---|
| Tangible | Manual reconciliation time saved | PHP 17,600 / year |
| Tangible | Missed orders avoided | PHP 78,000 / year |
| Intangible | Faster customer pickup | Improved word-of-mouth |
| Intangible | Better inventory visibility | Fewer stock-outs |
| Intangible | Data-driven best-seller insight | Smarter procurement |
Payback calculation
| Item | Value |
|---|---|
| Total one-time cost | PHP 37,700 |
| Annual tangible saving | PHP 95,600 |
| Payback period | ~5 months |
Mentor's tip
Use realistic local prices. Inflated savings ('we save the bakery a million pesos') invite skepticism. A 5-month payback is more believable than a 2-week payback.
Panel defense checklist
- [ ] Cost table separates one-time and recurring.
- [ ] All hardware, software, and labour included.
- [ ] Benefit table separates tangible and intangible.
- [ ] Tangible savings have a unit and source (hours, missed orders).
- [ ] Payback period calculated.
- [ ] Currency consistent throughout.
- [ ] Assumptions stated (PHP 80/hr labour, etc.).
Common mistakes
- No recurring costs (SMS credits, electricity).
- Tangible benefits without a unit ('faster service').
- Currency mixed (USD in costs, PHP in benefits).
- Unrealistic savings that the bakery owner would not endorse.
Mentor’s tip: Two tables: cost (one-time + recurring) and benefit (tangible + intangible). Compute payback period. Use realistic local prices and tag every saving with its unit.
Discussion
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