Definition of Benefit and Disbenefit
Definition Last Updated 17-Dec-2015 12:51
A benefit (disbenefit) is a change in state such that the outcome has greater (lesser) value than the initial state, where improvement (deterioration) is determined by reference to a standard that defines improvement (deterioration), i.e. by the application of rules employing particular criteria.
A benefit (disbenefit) may be an increase in something desirable (undesirable) or a decrease in something undesirable (desirable); if more than one condition applies, there are multiple benefits (disbenefits).
Article Last Updated 17-Dec-2015 12:51
- Business Benefit: Reduced operating cost (for fixed output) – a decrease in an undesirable
- Technical Benefit: Reduced network latency, Lower power consumption
- Financial Benefit: Reduced operating cost (for comparable output), Increased Return on Investment
- Personal Benefit: More time to spend with family – an increase in something desirable
Note that in these examples the values that make reduction in cost, power consumption, desirable are implicit: this is usually the case in reality because certain values are known to be shared or the chain of reasoning to a shared value is short.
In the case of “reduced operating cost” for example, there is still room for ambiguity: reduced costs may increase profitability which may increase shareholder value and hence share price at a time when the cost of capital is especially important to a business, or reduced costs might allow the business to reduce the price of its goods or services in order to gain greater market share or improve public perceptions of “value for money”.
For this reason, benefits should be traced to explicit statements of organisational priority and value as far as possible.