Opportunity cost
The value of the best thing you could have done with a resource instead. Money and supervision capacity spent keeping a losing system alive carry the opportunity cost of the winning system they could have funded, which is the deeper reason a kill is a portfolio success.
Defined in 3 GAGE programs, which carry 5 distinct definitions of it. The wording above is taught in AI Governance: Applied Mastery.
How each discipline defines it
The same term does different work depending on who is using it. These are the definitions as each program teaches them, unedited.
The value of the next-best alternative use of the same capital, which a robot investment implicitly forgoes when funded. A payback period judged against an organization's hurdle rate is an implicit claim that this investment beats the return available from that alternative use.
The value of the best thing you could have done with a resource instead. Money and supervision capacity spent keeping a losing system alive carry the opportunity cost of the winning system they could have funded, which is the deeper reason a kill is a portfolio success.
Revenue or efficiency that correct data would have unlocked, which the quality failure prevented, evidenced by a credible counterfactual comparison (a clean baseline, a parallel unaffected system, or a before-and-after comparison).
The value of the best alternative use of the money you are requesting. The "alternative" target of every hostile question is an opportunity-cost question; the quarterly portfolio review from Topic 8.3 is the artifact that answers it.
The value of the next-best alternative use of the same capital, headcount, or time that is given up by choosing to build a particular robot. Part of a complete status quo cost estimate, especially when a bottleneck process is turning away potential revenue.
Where it is taught
The exact lessons this term appears in. The first 7 topics of every program are free with a free account.
- The cost of bad data: pricing last quarter's silent drift in real money · The Money of Data, AI Data Governance: The Data Chair
- Build, buy, or kill: the quarterly portfolio review with real numbers · The Money: Budgets, ROI, and Risk, AI Governance: Applied Mastery
- The hostile board: defending your AI budget to directors who interrupt · The Money: Budgets, ROI, and Risk, AI Governance: Applied Mastery
Terms it appears with
Not an alphabetical neighbourhood: these are the terms taught in the same lessons, ranked by how often they appear together.