Linking the Project to the Organization Objectives
The organization needs to be able to ensure that its capital expenditure validation and approval process is directly linked with the value chain of their activities. Business drivers or causes of investment need to be linked to the benefits that will flow to the organization, its customers and stakeholders. Examples of these types of costs or benefits are shown below, for Sewer Pump Stations:
| 1. Environmental Impacts | See Sewer Spills Process (Relates to 4) |
| 2. Repair Costs | As Estimated - Event Related |
| 3. Loss of Service | Not Applicable - ERS or Overflow |
| 4. Outage/Time off Supply | Related to 1 |
| 5. Number of Customers Affected | Not Applicable |
| 6. Public Image | Applicable - Related to 1 |
| 7. Other Property Damage | As Estimated |
| 8. Secondary Impacts | As Estimated |
| 9. Loss of Income/Product | Not Applicable |
| 10. Injury or Fatality | As Estimated |
By understanding these costs or benefits in full economic cost terms, the organization has a proper cost benefit model that can be used to evaluate the NPV or AEC (average economic cost) of the options.
By understanding the quality of the data used in these various benefit calculations, the organization can also understand the confidence level that they have in the preferred option and in any secondary options.
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Setting an Appropriate Project Analysis Budget
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