Avoided costs, opportunity costs, and cost savings, can all play an important role in business planning, budgeting and decision support.
Avoided Costs? Opportunity Costs?
A routine oil change is a familiar example of cost avoidance. Small investments in preventative maintenance avoid the much larger cost of engine replacement later.
I spoke recently with a project manager whose project funding proposal had just failed.
The Project Management Office—and the company CFO in particular—turned thumbs down on the manager's Stage-0 business case. Why? Where was the red flag? Avoided costs! Read more of this post