A survey of cost-benefit methodologies for information systems

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