Quantifying Benefits - In Projects and in Life

By Sandi Hubert

I've spent many hours quantifying benefits and even teaching Project Managers and IT Analysts how to quantify a benefit to include as a dollar amount in a Return on Investment (ROI) Calculation, never realizing that I would be applying this same technique as a business owner.  Time Savings is one of the most challenging benefits to quantify because it seems so intangible.  Intangible savings can relate to savings in efficiencies, productivity, better service, and greater accuracy, to say the least.  You can easily convert efficiencies, productivity, better service, and greater accuracy to a value of time and then by assigning an hourly rate of dollars to that time, you can multiply out a cost savings.  You just have to ask a series of questions:   

For Improved Efficiencies:
- What becomes more efficient?
- How much more efficient? - <percentage>, <3 times more efficient>, etc. (This may be an assumption or a known statistic).
- Does it save time? If so, how much time? <hours>, <minutes>, etc.
- Whose time is being saved? What's their hourly rate?

Example Quantification of Improving the Deployment Efficiency of Software
Number of impacted clients (700) x Length of upgrade (1.33 min) / 60 (hours) x 12 (months) x 50% improvement of distribution = Time Savings of 93.10 hours. 

I often ask myself, "How much is my time worth to me?" and "Would it cost me less in of my time to hire someone to do this task for me, if I do not have the time to invest in doing the task?"  My husband and I ask this similar question when we have projects around the house.  How much time out of our weekend will it take away from our kids, or how much of an inconvenience and upheaval of our schedules to complete the project and how much is our time worth? Of course we place a value of infinity on the time we spend with our children so it always proves a Cost Savings to outsource home projects.

Work Projects as an Entrepreneur - most of the time it saves me to do it myself if I have the expertise to do the project.  If it's out of my sphere of experience or my ability to figure it out in a reasonable amount of time - well then it's just plain good business to outsource. 

This whole process of quantifying intangibles - makes for a very efficient means of accomplishing goals and making decisions. Have you determined yet, how much your time is worth?