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Topics: Benefits Realization, New Practitioners
How to Quantify Intangible Benefits?
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Hello, How to Quantify Intangible Benefits?

1. Ref:PMBOK 6th Ed 1.2.1 Projects: Projects enable business value creation. Page 7

2. Benefits provide to stakeholder after deliverable is achieved at the end of a specific project.

3. Are we able to categorize intangible benefits and make it measurable?

4. If tangible benefits are quantifiable with time, dollar and cents, what about intangible outcomes? Example:
- Goodwill
- Brand recognition
- Public benefits
- Trademarks,
- Strategic alignment, and
- Reputation

Thank you,
Edwin
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Before you can quantify intangible knowledge, you first need to identify and capture it, before sharing or assessing its value/benefit. Unlike tangible knowledge, intangible knowledge is hard to quantify. A good place to start is communities of practice which is like a hot bed for the identification, capture and sharing of tacit knowledge. Once this mechanism is in place and flowing freely, we can then assess its value to the organization, and that value will depend on the metrics the institution has put in place. These intangible assets are why many organizations hold such high stick value way in excess of their tangible assets that are quantified.
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Goodwill is one of those things that I think cant be accurately measured. But there is a fairly simple and crude way to calculate the value of intangible assets or knowledge within an organization. Just subtract the total assets of the company (fixed assets, investment, profits, whatever appears in the financial reports) from the total market value of an organization, and hey presto. If you're in the black and many times over, you have a lot of intangible value, and if it's in the red, you don't.
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1 reply by Edwin Lua
Nov 27, 2017 12:59 PM
Edwin Lua
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Yes, it's difficult to quantify goodwill as this is benefits that resides in every individual. Also, different interpretations do happen for not everyone think alike.
Perhaps, the only way to estimate is by using a broader sense of quantifying, such as is this goodwill a give-and-take or a win-win situation. Plus, over a period of time, let say 1 year of events.
Thanks for sharing!
Network:487



Edwin - By definition, intangible benefits are not quantifiable and thats why we call them intangible, but there are certain situations where do some appr calculations.
The difference between intangible and tangible is also that, tangible benefits can be calculated before you take some actions. The intangible benefits cannot be quantified upfront.

1. If you are company that supplies automotive parts and you go for say ISO certification, your market reputation will improve and naturally your sales should improve but you dont know how much. But you can do a survey with Automobile manufacturers about how likely they tend to go with ISO certified suppliers than non-certified ones given the quality is same. Based on the responses that you get and the auto companies's market share you can make some empirical calculations and do some rough predictions

The scenario that I gave was a simple one and there are many complex scenarios.
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1 reply by Edwin Lua
Nov 27, 2017 1:15 PM
Edwin Lua
...
"By definition, intangible benefits are not quantifiable"
Not any unit of measurement that I could think of. Maybe, trust metric helps.
Wonder if this is correct. It is abstract. FYI https://en.wikipedia.org/wiki/Trust_metric
Thanks for sharing!
Network:1654



The answer is simple: making it tangible. As you know, a project is started to create a product, service or result. How do you verify scope when you are creating a service? The same line of thinking for intangible benefits.
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1 reply by Edwin Lua
Nov 27, 2017 1:10 PM
Edwin Lua
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Are you saying within a span of a year, like an overview results of performance?
Sounds profound, please allow me to rethink "making it tangible".
To verify scope, objectives are met or responsibilities are assigned.
If work done, guess that is verified.
Thanks for sharing!
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You may have to use relative quantification, rather than absolute quantification. In other words, you may want to compare an intangible benefit to another benefit.
Network:1279



Hi Edwin!

Of course organisations can quantify intangible project benefits by converting observational data to dollars or by converting observational data to non-financial (but “hard”) statistics.

You need a benefits realisation plan in order to: 1) outline the activities necessary for achieving the planned benefits; 2) identify a timeline, tools and resources necessary to ensure the benefits are fully realised over time.

"Quantifying intangible or soft benefits is not pure science, but depends on skilful use
of analytical tools, such as comparative or scenario analyses. Some organisations use
cost-benefit or value analysis to quantify the impact of intangible benefits."

"One of the reasons organisations fail at—or simply ignore—benefits realisation is because they don’t assign, or know to whom
they should assign, oversight."

Please see Ref. PMI's In-Depth Report Delivering Value "Focus on benefits during project execution".

Thanks.
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1 reply by Edwin Lua
Nov 27, 2017 1:25 PM
Edwin Lua
...
Hey Jorge, thanks for sharing!

First off, you are saying got to differentiate benefits, sort of as readily codify into monetary language and vaguely tacit interpret into statistic.
Yes! Benefits realisation plan does help to itemise the benefits but not to the level of measures with standard metrics.
I have downloaded that article on Delivering Value: Focus on benefits during project execution. Will spend time reading it. Meanwhile, the link is https://www.pmi.org/learning/thought-leade...ject-execution. For those who are interested.

Thank you.
Network:1510



It has to do with your application. Why do you need to quantify them? In some cases, you ca not easily do that and in other circumstance you can. All you need is to first identify them. Obviously as they can not be easily translated to quantity, they are in "intangible" categories, however, it doesn't mean that it is impossible. You may find some indirect quantified matrices or etc. The reason behind this quantification can get you an idea.
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Everything can estimated, put a value.
Might not be simple, but can be done.
May require SME
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1 reply by Stéphane Parent
Nov 23, 2017 6:02 PM
Stéphane Parent
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You could use expected monetary value (EMV) to provide you with a value estimate.
Network:91697



Nov 23, 2017 5:56 PM
Replying to Vincent Guerard
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Everything can estimated, put a value.
Might not be simple, but can be done.
May require SME
You could use expected monetary value (EMV) to provide you with a value estimate.
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1 reply by Vincent Guerard
Nov 23, 2017 6:09 PM
Vincent Guerard
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Yes, you would need to declare the EVM at the project start and you should confirm sometimes after the project is completed.
Network:105514



Nov 23, 2017 6:02 PM
Replying to Stéphane Parent
...
You could use expected monetary value (EMV) to provide you with a value estimate.
Yes, you would need to declare the EVM at the project start and you should confirm sometimes after the project is completed.
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