When the actual benefits of a venture are less than the projected or estimated benefits, the result is known as a benefit shortfall.
If, for instance, a company is launching a new product or service and projected sales are 40 million dollars per year, whereas actual annual sales turn out to be only 30 million dollars, then the benefit shortfall is said to be 25 percent. Sometimes the terms "demand shortfall" or "revenue shortfall" are used instead of benefit shortfall; see
volume risk.
Public and private enterprises alike fall victim to benefit shortfalls. Prudent planning of new ventures will include the risk of benefit shortfalls in
risk assessment and
risk management
Risk management is the identification, evaluation, and prioritization of risks, followed by the minimization, monitoring, and control of the impact or probability of those risks occurring. Risks can come from various sources (i.e, Threat (sec ...
.
The discipline of
benefits realisation management Benefits realization management (BRM), also benefits management, benefits realisation or project benefits management, is a project management methodology, often visual, addressing how time and resources are invested into change management, making d ...
seeks to identify any benefits shortfall as early as possible in a project or programmes delivery in order to allow corrective action to be taken, costs to be controlled and benefits realised.
See also
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Boondoggle – A project continued despite awareness of a benefit shortfall
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References
* Cost Management: Book: Measuring, Monitoring & Motivating Performance By K. P. Gupta
Problems in business economics
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