Community is central

It has been said that all politics is local ... but even more so, all life is local. More than anything else, this is the central concept of TVM Value Accountancy.

The community is complex.

People in their own community know what is going on ... and have an ability to hold people accountable most of the time. People in a community often know about things ... even if they cannot do anything about them.

People need a structure that will make it possible for what they know to be used for the good of society ... to make their knowledge valuable ... and people need to be able to see metrics about society that have local meaning.

The challenge is to build a structure that does the job of facilitating the collection, transmission and storage of data without the structure becoming the dominant piece of the system. The data are at the center of everything ... with the structure being merely something to facilitate the data related activities.

Reality ... data ... analysis ... activity ... impact

TVM Value Accountancy is a datacentric management process.

The process goes from reality to data, to analysis, to activity, to impact. Data are critical to decision making ... and the management process. This graphic presentation is not 'circular' as such ideas are often presented, but one where things flow from left to right. This makes for easier understanding of the state, progress and performance of everything, especially the performance of society.

Implementation is at the center of making progress ... but before successful implementation there is planning and organizing ... and everywhere there is data collection and the use of data to improve everything so that results and impact are optimized.

Note the change in status or state from the beginning of the period to the end of the period.

Progress is the situation getting better. Progress is the relationship between the cost of the activities that changed the situation and the valuadd that resulted.

The following graphic shows how pervasive data need to be in the management process. In every aspect of the economy there has to be collection of data, analysis of the data and planning for action. Without data, decision making is nothing more than guesswork, and the results are unlikely to be very good. Without data it is difficult to have accountability.

The following graphic shows the connection between implementation interventions and results. An initial development intervention may need to be quite substantial because there are many big things to fix. As time goes on things needing fixing get smaller and things fixed have continuing value. When done well, a much smaller intervention will sustain progress into the future ... sustainable development.

Congestion Costing

Many cities have a problem with street congestion ... and several cities around the world have tried to address the problem with some form of “pricing” that charges users for road use. But before the discussion of congestion pricing, it would be useful to have a discussion of congestion costing. How much does it cost society to have such a dysfunctional system of city transport so that productivity is far below what is should be. This is where data about behavior of cost is useful. Operating a truck has three major cost elements, the labor cost, the cost of fuel and the cost of the equipment (truck). These costs vary based on time (labor), the power being used (fuel) and mainly time (for the truck). A truck stuck in traffic has high costs ... and is doing nothing useful ... just waiting to get moving and go somewhere.

There might be another big cost ... the cost of not delivering on time.

Buses carrying passengers have another cost to society which is the opportunity cost of the time being wasted by all the passengers on board. If 30 people on a bus are delayed one hour by congestion ... what cost does this have. If the costing is done at $50 an hour, the hourly cost is $1,500 ... and at a low wage rate of $10 an hour it is still $300 an hour.

How many people in a city like New York lose an hour a day because of getting stuck in traffic. Maybe its 500,000 people ... maybe a lot more. At a wage rate of $10 an hour, not that much above minimum wage, the daily cost is $5 million. For a year this amounts to $1.25 billion.