How to Quantify Intangible Benefits?

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.

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.

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.

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.