In a corporate climate where cost savings is king, management enforces strict cost containment as a necessary process for maximizing profits and downsizing the organization to match the economic pressures. The danger is sustaining this cost containment orientation as the status quo and not encouraging a business value orientation that more realistically reflects business impact on the bottom line. Oftentimes the annual percentage line item cuts from management are arbitrarily made across the board-regardless of the prohibitive impact such cuts will have on productivity, risk avoidance, safety, and quality. Moreover, once departments show they can absorb the hit to the budget, they tend to educate management that it can be done again and again, until some managers find themselves coming in at 4:00 am to fill in the gaps they have created in headcount!
Facilities managers understand their direct financial impact to the company's bottom line and believe it's necessary to report it to management but they do not have the methodology or tools to calculate business benefits. By creating a "value orientation" of their contribution to the bottom line and measuring their business impact with an analytics approach, facilities management and other cost centers can strike a more logical balance between cost savings and business impact. Chapel Hill-based Zemo Trevathan and Associates, Inc. delivers an analytics-based methodology of measurement to calculate financial outcomes for facilities management functions, processes, roles, and projects. Adherence to this methodology, known as "value analytics", more effectively reports on return on investment (ROI), impact on strategic goals of the company, and optimization of resources.
Value analytics is a methodology for measuring business impact using the principles of "intervention groups" and "control groups" in statistical analysis to isolate the benefit from other possible inputs to the benefit, information which interviews, surveys, and line item budgets will not reveal. In contrast the cost orientation, the value analytics approach relies on greater connectivity and communication between interacting departments-a systems view-demonstrating alignment with the strategic goals of the organization. In addition, departments may experience increased creative breakthroughs as they consider strategic outcomes and gain a better understanding of the business drivers for internal clients. Measurement of ROI is usually considered a historical look on the benefits of a current project. Using an analytics approach, through careful identification of intervention and control groups, departments can tease out additional information to optimize their strategies and deploy the projects across the enterprise for even greater return. Long considered too expensive, complicated, or impossible, measuring business benefit is not only possible, but it is fast becoming a business imperative.
Measuring the Outcomes
Zemo Trevathan and Associates, Inc. designed a methodology and approach to measure outcomes for specific initiatives, functions, or programs. The output will allow the organizations to utilize this methodology and approach for future projects to determine return on investment (ROI), impact on strategic goals and optimization of resources. The following are performance criteria for success:
- organizations has a documented process flow and defined steps to measure performance outcomes for future projects and initiatives
- The deliverables for this project meet stated objectives and requirements
- Project team members are provided training in the approach and methodology
An analytics approach answers these critical questions:
- What was the return on investment?
- What difference did it make on the agency's strategic goals?
- What worked best and for whom?
- What is the best deployment strategy for the project being measured?
- What could the potential benefit be for future years? For other regions?