D9.7 Cost, Benefit, and Risk Evaluation

A public report, led by Fraunhofer, documenting the Cost, Benefit, and Risk Evaluation

This deliverable aims to conduct a benefit, cost and risk analysis for the pilot partners in COMPOSITION to make a statement on whether the planned use case implementations are worthwhile from the point of view of the pilot partners. It will also be discussed whether the investments into the entire COMPOSITION project are economically reasonable. This will be accomplished by developing an approach for benefit, cost and risk analysis that meets requirements derived from the project’s context, e.g. practicability or reusability. The approach is divided into two phases. First, the business models of the individual pilot partners, specifically the use cases, are visualized. These results have been presented in detail inD9.9. The next step is to evaluate the business models with a focus on the business value increase that occurs through the implementation of the use cases. This procedure is based on value-based management, a scientifically and practically recognized method of corporate management. Specifically, this is presented by the so-called Benefit Management, which aims to quantify all benefits and costs from an IT project and to determine a holistic project value. The implementation is carried out by Fraunhofer project members with the help of the BeneFIT-Method and the associated BeneFIT-Tool, scientifically and practically field-tested methods of Benefit Management.

The approach is applied holistically to every pilot partner and at least every use case that is to be implemented in the further course of the project. In order to determine the necessary values, workshops are conducted with experts from the pilot partners. The aim is to identify all benefits, costs and risks associated with the use cases and, afterwards, obtain meaningful estimates for the cash inflows and outflows of the benefits and costs. Based on these estimates, a modified form of the BeneFIT-Tool is used to determine an expected project value from the point of view of the pilot partner at hand. The expected project value gives an indication as to whether the implementation of the use cases will be worthwhile in the next few years from the pilot partner's point of view. It was found that the implementation of all use cases will probably payoff in the next five years from the pilot partners’ perspective.

A comparison with COMPOSITION's overall budget also shows that the level of investment and the benefits of the project are already appropriate and in similar dimensions. If more companies join the ecosystem in the future and use COMPOSITION products and solutions, the overall added value of the project will increase even more. From a risk perspective, technical risks are particularly important in order to ensure good performance of products and services. In the long run, this is relevant in order to reduce the extent of impact of market risks, e.g. a competing product to COMPOSITION. For the next steps, the approach at hand will be enhanced and improved based on the results of this deliverable. For D9.11 a new benefit, cost and risk analysis will be carried out