Opportunity Cost and Cost Avoidance
Creating still further complexity, the benefits associated with one course of action must be considered not only in and of themselves but in relation to the benefits (and costs) associated with other alternatives. The opportunity cost is the cost of the loss of a benefit that might have been realized from a different course of action.
Today we live in a world of infinite choice but finite budgets. Money spent to implement application A means that application B will have to be put on the back burner, delaying or eliminating any benefits it would drive. Money saved by limiting infrastructure build-out may be exceeded by the opportunity cost due to unserved, revenue-generating demand, or reduced labor productivity.
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