“We’ve agreed what sort of benefit it is, now we are simply haggling over the price.”
If you look hard enough, there are no qualitative benefits. How should we measure the benefits we create for our customers / service users? If the new system will improve lives, how much of an improvement will it be? Where’s the breakeven point that shows if we’ve spent wisely?
Instead, I see business cases that say this stuff is qualitative and shouldn’t be given a money value. If it’s to be measured at all then it will be in a table of weighted scores buried in an appendix where no-one will give it much thought. There we can compare quality benefit A against quality benefit B. What we can’t do there is compare quality benefit A with cost £C.
So how can we ever tell if the investment is worthwhile? When we make comparisons between our quality benefits we create a currency for them. A is worth more quality points than B so within our business case we have a local currency of ‘Quality Points’.
That currency can be converted to any other and at some point we can match our Quality Points for £s. I know that it’s not real money. We won’t end up with a bag of cash. What we will get is a sense of scale, a feeling for just how relatively important these benefits are. We have a means to compare our local project against all the others.
The exchange rate depends on the market involved. I accept that the market is going to be small and imperfect. It’s going to be the stakeholders in the portfolios around our project. It will be their willingness to pay for all the various options they face that will determine the relative value of our benefits.
When our projects take this approach, the portfolio doesn’t have to choose between your weighted score and mine without knowing how we picked our weights. Their choice won’t be perfect but it will be a bit more rational and fair.
“Would you pay £50 for this benefit?”
“Certainly”
“Would you pay £50,000?”
“Of course not”
“Then we’ve agreed what sort of benefit it is, now we are simply haggling over the price.”