Why is it important for organizations to consider associated costs when creating a business case?

1. Human Resource Management
(8 slide presentation-not including title slide or references) (APA format)
(Must Include 3 scholarly references)
(Slides should be innovative, with professional backgrounds (not bland)
(Every slide should be titled according to the rubric below)
Cost Analysis
The purpose of this assignment is to help you achieve course outcome 4 and module outcomes 1 & 2.
The Great Resignation has been linked to the COVID-19 pandemic. It is characterized by the large number of individuals who have resigned from their jobs. As discussed in this module, turnover is one of the main HR metrics that drives decisions on talent strategy.
For this assignment, imagine that you are an HR director for an organization that you are familiar with or like that is having issues with staff turnover. Create a PowerPoint video presentation for the CEO of the organization that includes the following:
Identify your selected organization, and include its industry, mission, vison, and goals.
Give a current snapshot of internal and external labor considerations (i.e., stressed staff, market forces, etc.) and express concerns with the current staffing levels.
Develop at least 2 recommendations to retain current staff.
Develop at least 2 recommendations to attract new staff.
Provide a cost analysis showing the benefits of implementing recommendations.
Provide a timeline for implementing recommendations.
Provide metrics that will be tracked to show the progress of the recommendations.
Assignment Requirements
The PowerPoint presentation should be 7 slides, not including title or reference slides, and conform to APA guidelines.
2. Human Resource Management
(500 words per post) (APA citations) (in-text citations are a must)
Indirect Costs
The purpose of this discussion is to help you achieve Course Outcome 5 and Module Outcomes 1 & 2.
As discussed during this week, common HR measures are often tied to direct costs that impact business, but we need to always keep indirect costs in mind as well.
For this week’s discussion, select ONE of the following prompts to answer:
Which are two HR measures commonly used by HR at your organization to make staffing and talent decisions? What costs are associated with the measures? Explain and give an example.
Why is it important for organizations to consider associated costs when creating a business case? Explain and give an example.
Identify the differences between direct and indirect costs and how they impact business decisions. Explain and give an example.
3. Human Resource Management
(350 words per reply) (APA citations) (in-text citations are a must)
Jerick Flores
Dec 17 7:20pm
Manage Discussion by Jerick Flores
Reply from Jerick Flores
Module 6 Discussion: Direct versus Indirect Costs
Direct and indirect costs both affect business and should play a role in business decisions, but they have differences that should be accounted for in different ways. Direct costs are business expenses that can be specifically tracked and tied to a project or product (Stacey, 2024). If a business is producing a purchasable product, the materials to create that product are a direct cost, as would the salary of the employees fully making the product. In the HR world, a direct cost of hiring an employee would be the salary of the new employee, the cost of advertising the position, and any costs to perform processes like background checks.
Indirect costs are business costs that may not be directly traceable to a specific product of project (Stacey, 2024). This might include things like the cost to operate the building where the employees are completing the purchasable product, salary for staff that may somehow support the product or employees making the product but are not directly making the product, or the money lost if the product is not sold on time. In the HR world, an indirect cost of hiring an employee might be systems and technology, the salary cost of staff giving time to help onboard an employee at some point, or the cost lost while the employee is being onboarded. As mentioned, indirect costs may also be the potential benefit or loss of benefit if the project is not completed. For example, if this employee is not hired, what is the loss of profit by not having this person in the organization performing their job?
The main differences between direct and indirect costs are the ability to link a known number to specific projects, profits, or services (Stacey, 2024). If one is calculating the true cost of an initiative or product, direct costs have direct involvement, while indirect costs may need to be calculated based on time or influence (Stacey, 2024). Direct costs can be simple to tie to a business case, while indirect costs may be more difficult to discern. If one is working on a proposal for budget to hire a new employee, the cost of the salary and the cost to post the job is direct, while the amount of hours it takes for an HR professional to work on the hiring or the cost of the rent where the employee works are technically costs to hire the position but are indirect. These would need to be calculated and included to understand the full picture. Both costs impact business decisions as they are both a part of the business case for making the decision. Direct costs may seem more obvious and are likely to be automatically included; however, indirect costs are important to consider as they can help make or break the business case. The indirect cost needed to support the initiative weighed against the potential revenue loss and the direct costs may make a clear case to move forward (or not) with the proposal. Some business costs, such as the rent of a workplace, might be something dealt with separately and not included in each specific business case.
References:
Stacey, E. (2024, October 1). Direct costs vs indirect costs: Understanding the difference. Under30CEO. Retrieved December 17, 2024, from https://www.under30ceo.com/direct-vs-indirect-cost…
4. Human Resource Management
(350 words per reply) (APA citations) (in-text citations are a must)
Terry Gilliss
Dec 16 6:19am
Manage Discussion by Terry Gilliss
Reply from Terry Gilliss
Why is it important for organizations to consider associated costs when creating a business case? Explain and give an example.
When organizations develop a business case, it is crucial to consider associated costs for several reasons. This includes ensuring financial viability, enhancing decision-making, and fostering accountability. By evaluating costs comprehensively, organizations can create a more robust and persuasive business case that aligns with their strategic goals.
Financial Viability
Primarily, understanding associated costs helps determine the financial viability of a project or initiative. A well-prepared business case should include direct costs (such as initial investments) and indirect costs (like maintenance, operational expenses, and opportunity costs). For example, suppose a company proposes to implement a new software system without fully accounting for ongoing licensing fees and training expenses. In that case, they may find themselves facing budget overruns that could jeopardize the project’s success. A classic illustration is the implementation of an Enterprise Resource Planning (ERP) system; while the initial investment might seem justified by projected efficiency gains, neglecting to factor in long-term support and upgrading costs can lead to significant financial strain.
Enhanced Decision-Making
Considering associated costs also enhances decision-making processes within organizations. By providing stakeholders with a comprehensive view of potential financial implications, leaders can weigh options more effectively. For instance, when comparing two potential projects, Project A with lower upfront costs but higher ongoing expenses versus Project B with higher initial investment but lower long-term operating costs—having detailed cost analyses allows decision-makers to assess which option aligns better with their organizational priorities and resource availability.
Fostering Accountability
Moreover, incorporating associated costs into the business case fosters accountability among team members and stakeholders involved in project execution. When clear cost expectations are established upfront, teams are more likely to adhere to budgets and timelines. This accountability can be particularly important in larger organizations where multiple departments may be involved in funding or executing a project. For instance, if a marketing department proposes launching a new campaign without adequately considering promotional materials’ production or distribution costs, it could lead to friction between departments when unexpected expenses arise.
Conclusion
In conclusion, considering associated costs when creating a business case is essential for ensuring financial viability, enhancing decision-making processes, and fostering organizational accountability. By doing so, organizations position themselves for success by making informed decisions that align resources effectively with strategic objectives.
References:
McKinsey & Company (2020). “How to Build an Effective Business Case.” Retrieved from [McKinsey & Company] (https://www.mckinsey.comLinks to an external site.).

 

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