Why is a Financial Analysis Worksheets included with the Stage 2 Alternatives Analysis?
The Financial Analysis Worksheets (FAWs), located in SIMM Section 19F, replace the existing Economic Analysis Worksheets (EAWs). Stage 2 Alternatives Analysis is the first opportunity in the project approval lifecycle for the Agency/State Entity to present the cost analysis of the identified alternatives for addressing the business problem/opportunity. The FAW is included in the Stage 2 Alternatives Analysis and compares the current business process/system with the various identified alternatives. This was formerly referred to in the Feasibility Study Report process as the Economic Analysis Worksheet (EAWs, but has been renamed the Financial Analysis Worksheet to (1) clarify the focus of the document and (2) assure the use of the correct analytical process/forms.
The FAW is a multi-page document (spreadsheet) that allows for the fiscal analysis that compares the current method of addressing a business problem to various alternative approaches. A key concept of this review is to develop apples-to-apples comparisons of various component cost and revenue impacts. This is done through the review of the average annual cost of multi-year cycles, which allows for cycles of varying time frames to be compared. The FAW brings project cost analysis in line with standard budget analysis and can be refined in later stages of the PAL. Additionally, the FAW format aligns with the current budget process documents.