Problem Management — the questions
1.2 What is the cost/benefit advantage of the proposed solution?

Obviously, new policies and projects are intended to provide some benefit, otherwise there would be little point in considering them. In most cases it is only the short-term benefits that are considered, because they can be demonstrated easily. But it is important not to neglect long-term planning, even when it provides no short-term benefit.

Every change incurs costs, both direct and indirect, and it is essential to know what these are before implementing any new policy or project.


A change might have very obvious benefits to the bottom line, but that increased profit could easily be eaten up by the cost of implementation. Consider that repair and maintenance costs could be almost totally eliminated by replacing all equipment every year. As the actual costs of this plan can easily be determined, that this might be a bad idea is obvious.

But some changes can have more insidious side effects, saving money now, but incurring very large costs years later. Such things as reduced maintenance schedules, not bothering with rust-prevention, and not helping workers to keep their skills and knowledge up to date are blatant examples, but in many situations the hidden long-term costs are not so obvious.


Even some short-term costs might not be obvious. Replacing something intended for a specific purpose with something that does the job even better sounds like a good idea. But what if some other people happen to be using it for other purposes? For them, the replacement might not work as well, or even at all.


That a proposal has short-term and long-term costs should not prevent one from going ahead with it though. The important thing is to know what those costs are ahead of time, and to ensure that they do not significantly detract from the benefits. Two years down the road when people notice the drawbacks, it will be very handy to be able to point out that the original proposal had already taken them into consideration.

On the other hand, if the benefits of a proposal do not significantly exceed the costs, no matter how attractive that proposal otherwise may be, it is generally better to drop it and to spend one's time and resources on other matters. The time spent analyzing the situation has not been wasted, as it's very likely that someone else will eventually come up with the same proposal, and you already have the analysis for it.