You are the business analyst for the TGH Organization and are determining if you should buy or build a solution for your company. You have determined that you can create the in-house solution for $78,000 with a monthly support cost of $8,765. A vendor can create the solution for $61,000 with a monthly support cost of $7,990.
How long will it take your company to break even if you choose the internal solution versus the vendor's solution?
To calculate the break-even point, we need to compare the total costs of the internal solution and the vendor's solution over time. The internal solution has a higher initial cost ($78,000) and a higher monthly cost ($8,765) than the vendor's solution ($61,000 and $7,990 respectively). Therefore, the internal solution will take longer to break even with the vendor's solution. The formula for the break-even point is:
Break-even point = (Initial cost difference) / (Monthly cost difference)
Plugging in the numbers, we get:
Break-even point = ($78,000 - $61,000) / ($8,765 - $7,990) Break-even point = $17,000 / $775 Break-even point = 21.94 months
Rounding up to the nearest whole month, we get 22 months as the break-even point.Reference: This question is based on the concept of financial feasibility analysis, which is part of the business analysis planning and monitoring knowledge area in the BABOK Guide. Financial feasibility analysis is the process of comparing the costs and benefits of different solutions to determine the optimal one for the organization. One of the techniques for financial feasibility analysis is break-even analysis, which calculates the point in time when the costs of a solution equal the benefits of the solution. You can find more information about financial feasibility analysis and break-even analysis in the following sources:
BABOK Guide, section 3.4.5.5, pages 76-77
CBAP / CCBA Certified Business Analysis Study Guide, chapter 3, pages 85-86
Certified Business Analysis Professional (CBAP) | Coursera, course 2, week 3, video 3.3
You are the business analyst for your organization. You are coaching Tom about the different approaches to business analysis.
Which type of business analysis approach has the most business analysis work at the beginning of the project or during the start of a project phase?
You are the business analyst for your organization. A customer has approached your organization and is requesting that your company create new software for them that will help them collect customer information.
In regard to enterprise analysis this business needs stems from which one of the following need generation approaches?
What is Enterprise Analysis: does it differ from Enterprise Architecture?
[Enterprise Analysis - Business Analyst Training]
[External Drivers: Definition & Examples - Video & Lesson Transcript | Study.com]
A business analyst (BA) has defined a business analysis approach and presented the documents to the sponsors, the senior executives, the domain experts, the project manager and the head of technology, to obtain agreement from all. At this juncture, the prefect manager objected to some of the estimates determined m the budget and refused to agree with the estimates. Which guideline or tool, if followed by the B
A stakeholder engagement approach is a plan that describes how the BA will interact with the stakeholders, identify their needs and expectations, and address their concerns and issues. A stakeholder engagement approach can help the BA avoid disagreements and conflicts by ensuring that the stakeholders are involved and informed throughout the business analysis process, and that their feedback and input are considered and incorporated. A stakeholder engagement approach can also help the BA build trust and rapport with the stakeholders, and manage their expectations and influence levels. By following a stakeholder engagement approach, the BA can ensure that the business analysis approach and the budget estimates are aligned with the stakeholder needs and agreed upon by all the relevant parties.Reference:
IIBA BABOK Guide, Section 3.2, Plan Stakeholder Engagement
Five-Step Approach to Stakeholder Engagement, BSR
5 steps to creating a stakeholder engagement plan (with template), Asana
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