Cost Benefit Analysis (CBA)
The Cost Benefit Analysis is the first of the four design and planning phases required to establish a Common Back Office.
The practice since February 2023 has been not to create CBAs but to establish baselines for cost and resources which are used to establish the Business Case after the proposals have been submitted. Below are reported the steps followed before February 2023.
This step will be led by the UNDCO technical lead with support from the UNDCO functional leads and the Project Implementation Unit (PIU) of the lead entity. It will be based on consultations with the Operational Management Team (OMT), UN Country Team (UNCT) and Project Management Offices of the larger UN entities. The analysis follows four main steps:
Define the baseline: review of collected data to define the cost of current structure. Data is revised to allow reliable comparison with the future structure (e.g., filtering service lines to be included in the CBA, removing oversight roles, etc.).
Short-list CBO services: based on the data and consultations with the OMT and UNCT, a list of services is short-listed based on potential (ease of implementation and potential benefits, in terms of cost efficiencies and quality gains). The defined tier 1 services are included as part of this, and some or all of the tier 2 services are included.
Propose the CBO structure: proposal of a structure for each service line considering several factors such as volumes to be managed (based on baseline year), productivity ranges, the current structure of the hosting entity in the country, etc.
Calculate the difference between the current and the future cost: calculation of efficiencies based on the difference between the current and the proposed future capacities required to provide the services short-listed.
[1] The CBA indicates the consolidated structure to manage the workload of the baseline year. The CBA structure is indicative of the capacities needed but may need adjustment in case of changes in volume of business.
[2] Bidding entities are encouraged to do their own supplementary due diligence to determine the future structure required to deliver quality services.
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