If the only performance measure of importance is "cheaper," then you should do a benefit-cost analysis, because it is relatively easy to convert "cheaper" into dollars, and costs are already in dollars. The "cheaper" criteria chosen by the agency can be such items as saved time, avoided cost, and cost savings. Anything that in terms of equipment, space, time and other attributes is in the "cheaper" category.

Benefit-cost analysis provides information on the full cost of meeting specific service objectives through the Web and weighs those against the dollar value of the benefits received. The net benefits of the proposed project, examine the ratio of benefits to costs, determine the rate of return on the original investment, and compare the benefits and costs for each level of aspiration (i.e., modest, moderate, and elaborate) with the others. Benefit-cost analysis requires three steps:

This description of benefit-cost analysis gives the impression that the three steps will be easy to complete, but, in fact, benefit-cost analysis can be very difficult. The cost worksheets contained in chapter 4 of this guide will help with the first step, but placing a dollar value on each benefit (second step) can sometimes be problematic, especially if these performance variables are of the "faster" or "better" type. How might one calculate the dollar value of reducing customer waiting time by 10% or of providing client information with 20% fewer errors? Increasing the number of in-coming inquiries or the number of services provided may be more costly, not less so. In general, benefit-cost analysis may be most useful where the performance variables are of the "cheaper" type and, therefore, more amenable to quantification in dollar terms.

For a more in-depth discussion of what to do, please see James Edwin Kee, "Benefit-Cost Analysis in Program Evaluation," in Joseph S. Wholey, Harry P. Hatry, and Kathryn E. Newcomer (eds.), Handbook of Practical Program Evaluation. San Francisco: Jossey-Bass, 1994.