Introduction Citizens Against Government Waste (CAGW) is a private, nonpartisan, nonprofit organization representing more than one million members and supporters nationwide. CAGW’s mission is to eliminate waste, mismanagement, and inefficiency in the federal government. CAGW was founded in 1984 by the late industrialist J. Peter Grace and syndicated columnist Jack Anderson to implement the recommendations of President Ronald Reagan’s Private Sector Survey on Cost Control, also known as the Grace Commission.
Background
Businesses often use a cost-benefit analysis to determine the best course of action to achieve a goal. Entrepreneur Magazine stated it is “a process by which you weigh expected costs against expected benefits to determine the best (or most profitable) course of action.” For example, a company’s sales director must decide whether or not to implement a new computer-based system for management and sales processing. The sales force has a minimal understanding of computers, there are few computers in the office, and an extensive training program would have to be implemented for the system to work efficiently. By doing an analysis on the cost of purchasing, installing, training the sales force, and lost productivity compared to what the system would do to increase sales capacity, enhance customer service and retention, the sales director finds the benefit would be $90,000 annually compared to cost of $55,800 to install, train the employees, and lost productivity. Clearly, the payback time of less than a year is worth the investment.