In order to balance the management of the values and benefits created for developers it is important to conduct a feasibility study of the project from operational and economic perspective. Carrying out a feasibility study can significantly help the manager to achieve the success of the business more than what novelty of the innovation can achieve (Briggs, Claxton & Sculpher 2011). This study can help the firm to assess the competitors, assess the strength and weaknesses, and assess the wiliness of the customers to buy their products generally evaluate the project’s financial viability. Therefore, in order to achieve the balanced development values and benefits, various managerial techniques should be applied.
The first technique is to evaluate the costs against benefits by conducting a cost benefit analysis. This analysis takes the manager through the consideration of all the costs against the projected benefits. The managers should therefore be able to weigh the expected revenue against costs. This is done through the calculation of the anticipated difference between the projected net profit and the profit margin (Gutzwiller & Steffen 2000). The cost benefit analysis also involves gauging the volume of sales required to break even on the production by dividing the aggregate cost by price of each unit. It is also important to interpret the margin of error anticipated regarding the consistency of economic assumptions.
It is also important to consider reviewing the weaknesses and the strength of the organization under which development benefit and values are under consideration. This will include identifying various challenges that a company encounters and the managerial stronghold that enable the managers to achieve the anticipated value and benefits. A manager should also be in a position to ascertain the main competitors and evaluate their advantages. This can enable the management to formulate strategies that can help them to overweigh the competitors’ advantages.
The managers should also be able to risk analysis by conducting a risk breakdown structure of the project or product. This should involve listing all the possible risks that are detected as potential, and then estimate their likelihood of occurring. Having identified the likelihood of the risk occurrence, the manager is then supposed to identify the means to mitigate or reduce the likelihood of the risks (Holmes 2002). Moreover, the financial and schedule consequences analysis should also be evaluated to enable the management to formulate strategies that can aid in reducing those consequences. These particular risks are normally categorized into management risks, implementation risks, operational risks and external risks.
It is also significant for the project manager to keep the risk breakdown structure updated all through the project. In the course of the project it is significant for the manager to periodically add or eliminate the items to the risk structure management as suitable. Regarding the project experiences, the managers are also allowed to alter mitigation policies for each item in the risk breakdown structure (Stringer 2009).
All the discussed techniques are some of the techniques that managers should apply in their projects in order to identify the risks and cost that are bound when establishing the values and benefits of a project. Having a critical evaluation of cost and risk analysis, the managers are able to identify risk and cost that are anticipated in the project and how they can alter the estimated benefits and values of the organization. Managers should therefore consider these tools significant in the development value and benefits management.
Briggs, A., Briggs, A. H., Claxton, K., & Sculpher, M. J. (2011). Decision modelling for health economic evaluation. Oxford: Oxford University Press.
Gutzwiller, F., & Steffen, T. (2000). Cost benefit analysis of heroin maintenance treatment. Basel: Karger.
Holmes, A. (2002). Risk management. Oxford, U.K: Capstone Pub.
Stringer, L. (2009). The green workplace: Sustainable strategies that benefit employees, the environment, and the bottom line. New York: Palgrave Macmillan.