Financial and non-financial benefits

Learning objectives

• Classify project benefits without overstating savings.
• Assign clear calculation ownership.
• Link operational and financial measures.

Three kinds of value

• Hard savings — reduce expense or cash outflow.
• Capacity release — value only when the capacity is used.
• Risk avoidance and non-financial gains — real but reported separately.

Garment-factory example

Reducing repair hours may lower overtime, release capacity, reduce shipment risk and improve operator morale; each benefit needs its own calculation rule.

Method

1. Build a benefit logic tree.
2. Define baseline and counterfactual.
3. Assign Finance validation.
4. Track realization after Control closes.

Common mistakes

• Multiplying every saved minute by labour rate as cash.
• Ignoring implementation cost.