Chapter 10
Cost-Benefit and Risk Analysis
Chapter Summary: Cost-benefit analysis provides a vital perspective to help decision makers make the best choices based upon the information and resources available to them. This chapter introduces concepts and tools to estimate the costs and benefits of new technologies. Since every technology implementation will have different chances of success or failure, the chapter extends cost-benefit considerations to incorporate uncertainty and to apply risk analysis.
The technology delivery system (TDS) provides a framework for looking at the future of an innovation, and preceding chapters have introduced concepts and tools for adding substance to that framework. Every TDS presents numerous opportunities for decisions. Technology managers must choose among alternative paths with the awareness that they are allocating scarce resources.
