Analysis ... a step to creating value from data

Data are nothing without analysis, and TVM Value Accountancy is the same. The effective use of analysis makes improves decision making and enables people and organizations to be more accountable. This is what makes TVM Value Accountancy valuable. Experience has shown that performance improves when there is active feedback and there are the data that enables people and organizations to be held to account. People may not like it ... but their performance improves.

The purpose of analysis is to get a better understanding. The data are neutral ... the analysis then produces results that might suggest some conclusions. It really does not matter what analysis is done as long as the result is better understanding and improved decision making.

One value step is moving from data through analysis to understanding ... another is to move from understanding to effective action. In some situations this has been done with wonderful results, but mostly there have been interventions that were more expensive than effective.

Comparative analysis

Comparative analysis has many forms ... including (1) the comparison of data from one locations with another location; (2) the comparison from one time to another time; (3) the comparison from one organization to another (4) the comparison of what should be to what actually is; (5) the comparison of one approach to another approach; etc.

Analysis releases the power of data

Data without analysis is a waste.

There are data … and then there is information, then knowledge and then wisdom.

It takes analysis to move from having data to having information. Knowledge is getting information into the human brain … and then wisdom is sorting this knowledge so that it gets used in a useful way.

The world has a whole lot of data … most gets used for just a very little bit of analysis … a terrible waste!

An issue ... studies

Almost every study needs some data to be the foundation for the analysis and conclusions. Enough data are collected to satisfy the methodology of the study … and analysis is done … conclusions drawn … and report submitted. Some time later another study in a similar area of interest … but usually little or no reference to the prior data. Easier analysis … easier conclusions … easier report without the problem of more data that may or may not fit exactly the new study format, analysis and conclusions. What might be the problem and what might be the solution.

The problem might be that many studies are part of an education process that requires original study, analysis and reporting. In this, the primary objective is passing educational requirements … not helping directly with the progress of society and analysis to make this better.

Merely recognizing this reality and getting the data more completely into the public space could help significantly.

Management of data ... making metrics useful

TVM is about making metrics useful. In order to be useful the analysis has to be fast, based on reliable data and the conclusions clear. The whole process has also got to be affordable … in other words, low cost even if the eventual value of the process has a huge potential to be substantial. Any process of metrics and analysis is part of the “overhead” of society, not directly productive and its cost reduces the resources available for the valuable work!

Adding the value dimension to accounting sounds like it is adding a lot more work … but it may simplify accounting and by adding a dimension to accounting that facilitates answering important questions way better than a money accounting system can do on its own. Part of the essence of good analysis is to focus on matters that are material … that are important.

The big questions about social impact cannot be answered reliably unless there is a value component in the accounting system.

Making analysis fast and useful

Decision making needs to be timely … is best when the relevant data is available and presented in a clear useful manner.

What this means in practice is that available data are used … and the analysis is as good as possible relative to the available data. Rigorous academic analysis takes time … and by the time the analysis is complete, the situation has changed … or should have changed!

TVM recognizes that the academic community and many experts in the international relief and development industry, and in institutions like “think tanks” favor rigorous academic study of complex economic development issues … but this approach is expensive and of rather little practical decision making value. It is too expensive, too little and too late.

Some successful organizations have used simple rapid planning processes for years with good outcomes … for example the UN High Commission for Refugees (UNHCR).

UNHCR Used Really Rapid Planning

For many years, the management approach of the UN High Commission for Refugees (UNHCR) was unusual in the UN system, and very effective. They estimated the number of refugees as quickly as possible and as accurately as possible, and this number established a default budget framework for their immediate operational activity. The UNHCR method made it possible for UNHCR to do in hours what other units of the UN system would take weeks or months to do. This approach saved lives … not to mention saving money!

In much of the business world a rapid planning process is used to take advantage of opportunities and to avert crisis.

Fast Planning in a Business Setting

An international fishing company negotiated fishing licenses to operate in a country's Exclusive Economic Zone (EEZ) … with the provision that a fleet of fishing vessels should be in operation on site within a short period of time … three months, I believe. The expectation was that the international company would not be able to deploy suitable vessels in this time, and the licenses would therefore lapse. The international company did an urgent plan that involved very unconventional solutions and was able to deploy suitable vessels within the time limit imposed … much to the annoyance of the government officials who had designed the “trick”! Fast planning made it possible to take advantage of a desirable opportunity!

Analysis should be done with an open mind about what the results will be. This is rare, because much analysis is done with a clear idea of what the outcome should be, and this has a terrible impact on the objectivity of the analysis.

When I was a student, my tutor, Andy Roy, was very clear about the idea that there were data, there was analysis and there were conclusions. I got high marks for my willingness to do analysis that resulted in conclusions different than the conventional wisdom. We talked a lot about the problem of data and analysis that was used merely to attempt to support conclusions already made.

In my career I have seen another issue ... data and analysis used to get the results that those with control of the purse wanted. This is common in international development where recipients of funds always wanted the analysis to show what their funders expected. I believe that this has been one of the big failures of development, because it has obscured the very limited impact that most development projects have had.