The BCA Tool comprises guidelines and spreadsheets to support balanced and systematic decision making and provide evidence for use in WSC investment business cases. The tool is fully consistent with Australian, state and territory government BCA guidelines.
What’s in the BCA Tool?
The BCA Tool is a comprehensive set of resources, which we recommend you access in this order:
INFFEWS BCA Tool: Benefit: Cost Analysis and Strategic Decision Making – provides guidance on BCA basics; strategic issues related to BCAs; whether to conduct a BCA; using economic information, including BCAs, in strategic decision making
INFFEWS BCA Tool: Rough BCA Tool – provides guidelines and a spreadsheet for a ‘rough’ BCA, which is useful as a first step towards a full BCA, and a test of whether a BCA is feasible
INFFEWS BCA Tool: Guidelines – explain key concepts behind BCA, and pitfalls to avoid when doing a BCA
INFFEWS BCA Tool: User Guide – provides detailed step-by-step instructions and advice for completing a BCA in the spreadsheet tool
INFFEWS BCA Tool Spreadsheet – captures the qualitative and quantitative information, calculates BCA results and conducts a sensitivity analysis to test the robustness of results
INFFEWS BCA Tool: Comparison Tool – makes it easy to compare the results from BCAs for multiple projects, or different versions of the same project
INFFEWS BCA Tool Training Resources – contains videos and slide sets used in training courses.
How do I use the BCA Tool?
The BCA Tool collects information in a logical order. The three main sections of information build towards the overall economic assessment of the project being evaluated:
To assess your project, complete one copy of the spreadsheet in Microsoft Excel. The spreadsheet captures both contextual and quantitative information about the project and calculates the BCA results. It also generates a summary report which you can provide to decision makers, and automatically conducts five types of sensitivity analysis.
The information collected in the spreadsheet is integrated in a very precise way to evaluate the Net Present Value and Benefit: Cost Ratio for each project. The questions are designed to feed into the calculations of the BCA. The answers to later questions often depend on the answers to questions earlier in the spreadsheet.
For some questions, you have the option of responding to a simplified five-point scale or providing a specific numerical response. The choice depends on the quality and detail of information available to you.
The BCA Tool is designed to be fully flexible in the types of benefits that it can handle. It includes some specific benefit types that are expected to arise in certain types of water related projects, but it is flexible enough to also handle other benefit types. The main benefit types are market benefits, non-market benefits, cost savings or delays, and risk reductions.
Several different types of costs may need to be considered in a BCA. They are the cost of the project itself (cash costs to the funder, in-kind costs to the lead organisation and private costs to participants), ongoing costs to maintain the benefits generated by the project, and the opportunity cost of the funds invested in the projects.
Upgrade to the latest version
The BCA Tool includes the facility to efficiently transfer the data for a BCA from an old version to a new version. So, if you want to re-examine an existing BCA in a later version of the tool, you don’t need to re-enter all the data manually, one number at a time.
Want more? Watch our upcoming Couch Time – Conversations with the CRCWSC session featuring the tool developers Professor David Pannell and Dr Sayed Iftekhar as they discuss some of the big issues with BCA and how the updated tool can help. The discussion includes the potential roles of the BCA Tool in an organisation, the use of sensitivity analysis in the tool to get insights into the robustness of results, the scale of project for which doing a BCA is worthwhile, and the roles of economists and non-economists in successfully completing a BCA.
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And you can see two of our partners demonstrating the BCA Tool in practice, and download the recently released INFFEWS Benefit-Cost Analysis Tool: Booklet of Applied Examples. We also have available Constructing business cases for water sensitive investments: a handbook for local government.