8/7/2017 Benefit shortfall - Wikipedia

Benefit shortfall
From Wikipedia, the free encyclopedia

A benefit shortfall results from the actual benefits of a venture being lower than the projected, or estimated,
benefits of that venture. If, for instance, a company is launching a new product or service and projected sales are
40 million dollars per year, whereas actual annual sales turn out to be only 30 million dollars, then the benefit
shortfall is said to be 25 percent. Sometimes the terms "demand shortfall" or "revenue shortfall" are used instead
of benefit shortfall.

Public and private enterprises alike fall victim to benefit shortfalls. Prudent planning of new ventures will include
the risk of benefit shortfalls in risk assessment and risk management.

The discipline of benefits realisation management seeks to identify any benefits shortfall as early as possible in a
project or programmes delivery in order to allow corrective action to be taken, costs to be controlled and benefits
realised.

See also
Cost overrun
Cost-benefit analysis
Optimism bias
Reference class forecasting
Underconsumption macroeconomic form

References
Cost Management: Book: Measuring, Monitoring & Motivating Performance By K. P. Gupta

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This page was last edited on 23 December 2016, at 20:49.

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