Alternative analysis is the evaluation of the different choices available to achieve a particular project management objective. It is an analytical comparison of different factors like operational cost, risks, effectiveness as well as the shortfalls in an operational capability. It requires different tools such as life-cycle costing, sensitivity analysis, and cost-benefit analysis. With alternative analysis, options to the solution are identified to satisfy the needs of an existing or new program.

It is one of the crucial documents produced needed for program reviews and milestones within a project management plan. Most project managers need an alternative analysis before they can even start with the program. The recommendations from the alternative analysis determine whether another program should commence or if the existing one should be continued.

Alternative analysis is often performed to give decision-makers choices for continuing existing programs or starting a new one. With this, it identifies cost-effective actions to avoid duplication of efforts as well as decrease the risks in delivering successful programs in the future.

Alternative analysis is often performed by the Department of Defense Homeland Security and Treasury but commercial industries also do this. However, the latter tends to focus on the life cycle cost, operational, and technical risks.