Even in sectors where cost-justification may appear unnecessary, it may therefore be helpful to address it. In most sectors, the question of cost-justification has to be addressed and answered in detail. This shouldn't be too difficult. There are not many other investments a company can make that offer this type of benefit. Whatever basis of calculation is used for this analysis - payback, Net Present Value, or Discounted Cash Flow Return on Investment, the problem is basically the same.
Benefits can only occur in one of two ways.
Either they come from a reduction in the company's costs or from an increase in sales. Where it is clear, the benefits are referred to as tangible or direct benefits. Where there is not a direct relationship, the benefits are referred to as intangible benefits. Tangible benefits are relatively easy to identify, but there are not many of them, and they are often difficult to achieve in practice. One of the most tangible benefits is to shut down a department or group, and fire everyone who was connected with it.