Learn how to go beyond mere numbers in Cost/Benefit analysis
with Mind Mapping
Cost/Benefit analysis is a well-known technique that is widely
used in any business transaction. From simple to large project
management Cost/Benefit analysis is resorted to assess the full
financial implications of a business operation.
As the name implies, Cost/Benefit analysis is adding up the
value of benefits arising from implementation and subtracting
the costs associated with the process. Invariably, costs are
either one-off deal or recurrent. However, benefits are often
experienced after a minimum period of time. This time is built
into the Cost/Benefit analysis as payback period, when the
benefits start accruing, repaying for the costs incurred. Most
companies set a specific period such as 3-years to gauge results.
In its basic form, Cost/Benefit analysis involves weighing the
financial costs and benefits - for e.g., a company deciding to
provide office transport instead of offering transport
allowance. In such a process the company would work out the cost
of hiring transport or buying appropriate mode of transport for
safe return of employees versus individual payment passed on as
transport allowance to the employees. It would however not
measure the satisfactory levels of the employees, the loyalty
factor it could accrue to the company, the punctuality it would
ensure and the teaming and bonding that the travel could bring
among the employees. These are the intangible benefits for which
there are no numerical value assigned.
In project management, Cost/Benefit analysis invariably takes a
major share of the process. In fact, no project is undertaken
without it, as unless benefits outweigh the costs, the need for
incurring costs in the first place is rendered meaningless. This
is how most financial transactions are worked through, excluding
of course the political ones.
In the usual Cost/Benefit there is no scope for incorporating
intangible disadvantages and benefits. However, intangibles such
as emotional satisfaction, environmental concerns and long-term
future consequences are vital to the success of any financial
transaction. This is exactly where Mind Maps can score above the
mere Cost/Benefit analysis.
After thoroughly assessing the financial implications of a
business transaction or a process, it is vital that an
exhaustive appraisal of the often-neglected intangible elements,
are factored in to provide a complete comprehensiveness to the
process. Mind Maps help you to explore these aspects
scrupulously and systematically.
By looking at issues in all their widest aspects, Mind Maps help
you to prepare for contingencies and address them effectively,
and also to see the links between them. Apart from providing a
careful understanding of the whole issue, they could provide new
opportunities and avenues for further action or growth hitherto
unseen. As you gain the full picture, you will be able to see
the associations between various tangible and intangible
elements, and to find creative approaches and solutions.
That is why Mind Maps can be a useful device to help you charter
into unknown territories. While Cost/Benefit analysis derives
its numerical value, Mind Maps go beyond it to bring in the
deeper, underlying causative and emotional factors. They help in
rendering wholesomeness to the process and provide the highest
mental satisfaction. Hence, using Mind Maps indeed has a
psychological advantage. You could learn about them and gauge
for yourself.