Learning activities are budgeted in a wide variety of ways, so the degree of estimating the costs will depend upon the organization you are working for. Generally speaking, the closeryou are to your customers or clients, the less you have to estimate. For example, a small Training & Development department located within a manufacturing facility might only have to justify its timeand capital expenditures, while a training vendor will probably have to give a full development estimate before a training program is approved.
Budgeting training is often a difficult chore asplans are often based on training an "average person." But, as we soon learn, although there are many models and statistics of an average person to be found in various literatures, there are actuallyno average people to be found! We are all unique in some form or manner. This makes any activity that must place a variable on people highly uncertain and inaccurate at times.
Although the budgetmay not be correct the first time, especially if the training is new or complicated, it still should be performed at this time to give the training staff a goal to aim for. The budget or the programcan be adjusted when more information has been obtained. After all, this is what the ISD model is all about, performing evaluations throughout the various phases and then using the feedback toadjust the program for the desired results.
Quantifiable costs plus quantifiable benefits adjusted for the risks equals value. An attempt to quantify every benefit and cost forinclusion in the financial analysis, even the so-called intangible or "soft" costs and benefits. The reason it is important to quantify everything possible is this: If no financial value is assigned toan agreed cost or benefit, that impact contributes exactly nothing to the financial analysis.
Retrieved from http://www.sourcingmag.com/dictionary/Cost/benefit_model-45.htm on December, 2009.