The Underground Man

Benefit/Cost ratio in project management

I am studying project selection metrics today. It struck me that during project selection that one should be calculating the benefit/cost ratio for all your projects. Yet, in the startups that I've worked for (as opposed to the one I owned) no one but me ever considered BCR. Perhaps because there was a concern for obtaining market share and anything, however ephemeral, that contributed to that almost-mythical market share could be justified.

So with an infusion of cash (say something like $17million during the period I was at Asimba) there was no real analysis of the cost/benefit of the projects that we did on the Website (the primary hypothetical revenue generation mechanism of the firm). No one had a clue, or even seemed to care that 1) project cost wasn't tracked, and 2) benefit from project execution wasn't quantified in any way. Not even a suggestion that the project completion would contribute directly to the bottom line.

I think this was probably symptomatic of the dotcom firms during the boom years. I suppose that my firm (Art & Science W³ Development) was somewhat of an exception in that we were the agency that built the Web sites for these firms. Our revenue stream didn't depend on the validity of the client firm's business model (good thing, that).

We were the miner's supply store, not the miner.

Posted by artandscience at March 20, 2004 01:05 PM