Cost benefit analysis of information systems: a survey of methodologies

Cost justification has become one of the most important factors influencing the pace of business automation, particularly end user computing. The primary difficulty in cost justification is the evaluation of benefits. This paper identifies and discusses eight methodologies which have evolved to quantify the benefits of information systems. These are: decision analysis, cost displacement/avoidance, structural models, cost of effectiveness analysis, breakeven analysis, subjective analysis, time savings times salary, and the work value model.