Cost Benefits Analysis And Feasibility For Office Relocation In The Public Service Agency

Budi Wahyu Mahardhika1,*, Phonny Aditiawan Mulyana1, Asyidatur Rosmaniar1

  • 1: Department Management University of Muhammadiyah Surabaya

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The existence of a Public Service Agency in the Provision of Telecommunications and Informatics has an important role to support the availability of national communication infrastructure. To improve better performance, the agency plans to relocate its office in a 1 km radius from the headquarters of the Ministry of Communication and Informatics. This relocation aims to achieve ease of coordination and cooperation between the Agency and the Ministry so that in the end a significant performance improvement will be achieved. Feasibility study and Cost Benefit analysis examines how the plan will bring more benefits compared to the costs. However, relocation is not just a matter of costs and location but also to determine the extent to which predictions of employee performance improvement will be achieved from this relocation. Furthermore, improving the performance of staff is expected to bring benefits to the Indonesian people in general. Based on the results of a poll conducted on 88 staff respondents stated that the majority of respondents needed a wider living room and archive space to accommodate operational activities. Financially, the office relocation was feasible. The cost for this relocation will be the pay back period in the 5th year with an IRR of 95.74%. The benefit cost ratio is 2.09 which indicates that this office relocation is feasible. Changes in conditions in which income drops 10% will cause the payback period to be reached within 5.33 years.

Keywords : cost benefits relocation and public service agency

Published 16th Oct 2019

Publisher EAI

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