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Combining cost and performance assessments for decision support

Given the cost and performance assessments that you make, the key question is what level of agency investment in Web-based services to recommend. Is the elaborate version the best level of investment or is it too expensive? What about a moderate or only a modest investment at first? It may be that the cost and performance assessments support taking no initiative on the WWW at all. But how would you know? It is sometimes very difficult to draw an obvious conclusion from all of this information.

There are many ways that cost and performance information can be combined and integrated to support decisions about WWW investments. Three approaches are reviewed in this chapter: benefit-cost analysis, resource allocation methods, and multi-attribute utility models. Describing these three approaches in detail is beyond the scope of this guide. However, a general overview may help you get started, and references for additional reading are provided in case you are interested in learning more. Examples are presented in Chapter 7.

Why would the agency choose one over the others? The answer to this question depends on several factors. There is no one right way to say which method or methods should be used by a specific agency, but certain indicators can be found. If your agency is only concerned with cost, you should probably perform a traditional benefit-cost analysis. If the agency has a short list of performance criteria (as described on p. 17), the multi-attribute utility model should be chosen. If the agency has a long list of performance criteria, they should probably use the resource allocation method.

Figure 5. Indicator/Tool

Recommended tool:
Cost important
Benefit-cost analysis
Short list of performance criteria
Multi-attribute utility model
Long list of performance criteria
Resource allocation method