{"id":8739,"date":"2023-10-05T16:50:53","date_gmt":"2023-10-05T20:50:53","guid":{"rendered":"https:\/\/www.business-case-analysis.com\/blog\/?p=8739"},"modified":"2023-12-26T20:50:37","modified_gmt":"2023-12-27T01:50:37","slug":"soft-benefits-business-case","status":"publish","type":"post","link":"https:\/\/www.business-case-analysis.com\/blog\/soft-benefits-business-case\/","title":{"rendered":"Do Soft Benefits Really Belong in a Strong Business Case?"},"content":{"rendered":"<p><strong>Captain&#8217;s Log, Entry 8172.5<\/strong>\u2014<em>Non-financial and so-called Soft Benefits outcomes from an investment or action deserve value and a place in the business case\u2014when they help meet important business objectives.<\/em><\/p>\n<ul>\n<li>Non-financial and so-called Soft Benefits belong in the business case when they contribute to meeting business objectives.<\/li>\n<li>Important benefits from an action are sometimes hard to value\u00a0in financial terms.\u00a0 Case builders struggle especially in assigning value to non-financial outcomes\u2014the so-called &#8220;intangibles.&#8221;<\/li>\n<li>Are these benefits soft benefits? Or, real business benefits that belong in the business case?<!--more--><\/li>\n<\/ul>\n<h2>The Answer is Yes! These Benefits Belong.<\/h2>\n<p>The answer to such questions can be\u00a0an emphatic Yes! Outcomes qualify as business benefits if they meet two conditions.<\/p>\n<p>Outcomes contribute to meeting important business objectives.<br \/>\nThere is tangible evidence for the outcomes.<\/p>\n<p>Notice especially that the word\u00a0financial does not appear in conditions (1) or (2) above. If both 1 and 2 apply, then non-financial outcomes qualify as legitimate business case benefits.<\/p>\n<h2>Soft Benefits?\u00a0Don&#8217;t Touch Intangibles!<\/h2>\n<div style=\"display: block; float: right; margin-left: 20px; width: 320px;\">\n<p><img decoding=\"async\" loading=\"lazy\" style=\"display: block; float: right; width: 320px; height: 320px; border: 1px solid #ffffff; border-radious: 5px;\" src=\"https:\/\/www.business-case-analysis.com\/blogimages\/soft-benefits-value.webp\" alt=\"Do soft or intangible benefits belong in the business case?\" width=\"320\" height=\"320\" \/><\/p>\n<p style=\"font-size: 85%;\">Nonfinancial and other soft benefits belong in the business case when they contribute to meeting business objectives.<\/p>\n<\/div>\n<p>It is very important that case-builders see\u00a0the problems with two dangerous and potentially damaging terms: Intangibles\u00a0and Soft Benefits.<\/p>\n<p>Business people sometimes apply these names to outcomes such as increased customer satisfaction, stronger branding, reduced risk, or improved company image, for instance. Regarding the words intangible and soft, we present a certain business case doctrine to participants in Solution Matrix Business Case seminars:<\/p>\n<p>Tangible means touchable. It does not mean financial, as many people seem to think.<br \/>\nIf an outcome is truly intangible, that means there&#8217;s no evidence it has occurred and no way to measure its qualities.<\/p>\n<p>Truly intangible outcomes do not belong in a business case.<br \/>\nOutcomes such as higher\u00a0customer satisfaction or better branding\u00a0are non-financial outcomes. However, the case builder can verify and measure these benefits through evidence that is indirect, but tangible nevertheless. Examples include impacts on key performance indicators (KPIs) such as customer satisfaction survey scores, are examples that can receive financial value this way.<\/p>\n<h3>Soft Benefits are Second-Class Citizens in the Business Case<\/h3>\n<p>To call an outcome a soft benefit is to make it a second class citizen in the eyes of everyone. As such, it loses respect and carries little weight among decision support criteria. Second-class status for many non-financial outcomes is unfortunate and unnecessary. Such outcomes may represent strategic business objectives. They may represent the very reason for undertaking programs, projects, acquisitions, or other actions.<\/p>\n<h3>The Gun-Shy Colonel&#8217;s Soft Benefits Dilemma<\/h3>\n<p>Several years ago, a colonel in the US Army Medical Service Corps turned up in one of our business case seminars.\u00a0The Colonel had a very specific case-building need: A\u00a0business case to support a funding request for a new training facility. He was trying to justify the new building entirely in terms of cost savings. The old site was costly to maintain and it was too small. The army was currently renting expensive classroom and clinical space off base in order to meet high volume training needs. A new building designed for the purpose should be less expensive to run. And, a new building would do away with the need for outside rentals.<\/p>\n<p>Unfortunately, the colonel&#8217;s estimated savings fell short of the new building costs, even when projected across thirty years. He was not looking forward to taking his case up the chain of command.<\/p>\n<h3>Finding Value in Soft Benefits<\/h3>\n<p>The new building promised other benefits, of course. However, the colonel was not sure how to bring\u00a0them into a business case. The case, after all, had to survive scrutiny as it moved up the chain of command. The last thing he wanted was to be hit with a charge of soft benefits. So he focused on what everyone agrees is a hard benefit: cost savings.<\/p>\n<p>Business Benefits Come from Business Objectives<\/p>\n<p>I had to ask him: Do you mean to say that the entire mission of the Army Medical Service Corps is to save money?<\/p>\n<p>Of course not!!! (The question may have touched a nerve.)<\/p>\n<p>Our mission is to:<\/p>\n<p>Provide the army with the best available health care.<br \/>\nMaintain high medical readiness in all conditions&#8230;. and so on through a long list of impressive mission statements.<\/p>\n<p>I asked him:<\/p>\n<p>Will the new facility help you do these things better?<\/p>\n<p>Of course!<\/p>\n<p>Can you prove that?<\/p>\n<p>Certainly!<\/p>\n<p>The colonel showed in concrete terms how to shorten the training cycle for several specialties. And he showed how staff could collaborate more effectively with the new facility. He also showed how they could reduce critical support skill shortages with the new building. And, he explained how it would be easier to recruit high-quality civilian staff with the new facility.<\/p>\n<p>In conclusion, the Colonel had tangible evidence to\u00a0make the case:<\/p>\n<p>The new building would help reach \u00a0mission\u00a0objectives.There is no better definition of a hard benefit than that.<\/p>\n<h3>What are Soft Benefits Worth in Real Money?<\/h3>\n<p>The business case stands or falls on the strength of its reasoning, not its financial math. Giving\u00a0financial value to benefits should be the last case building step, not the first.<\/p>\n<p>To build the benefits list\u00a0for the case, start with a\u00a0focus on important\u00a0objectives. If you can show in tangible terms that your proposal helps meet objectives, the benefit is real.<br \/>\nIf leaders\u00a0agree there is value in reaching the objective, it follows that the benefit has value.<\/p>\n<p>That much of the structure is now solid. To give value to a non-financial outcome, then take two more steps:<\/p>\n<p>Firstly, agree on\u00a0the value of reaching the objective.<br \/>\nSecondly, ask: What part of that value belongs to the benefit outcome?In other words,\u00a0 before trying to estimate benefit value, find\u00a0the value of reaching the objective.<br \/>\nThe Outcome: Building Approved!<\/p>\n<p>The colonel\u00a0found his superiors were very\u00a0willing and able to agree\u00a0the value\u00a0of meeting goals. As a result, they readily agreed on\u00a0figures for the value of:<\/p>\n<p>Fewer\u00a0skill shortages.<br \/>\nShorter training cycles.<br \/>\nRecruiting and retaining staff.<\/p>\n<p>Now, there was only one more question.<\/p>\n<p>What part\u00a0of this value belongs\u00a0to the new building?<\/p>\n<p>The agreed figure was not 100%. But it was not 0%, either. That was more than enough to make the case.<\/p>\n<h3>Where to Go From Here: Take Action!<\/h3>\n<p>First-time and veteran case builders alike can start with our article online <a href=\"https:\/\/www.business-case-analysis.com\/business-case.html\">Business Case Analysis<\/a>.\u00a0 After that, learn case design and development from the <a title=\"The Business Case Guide\" href=\"https:\/\/www.business-case-analysis.com\/business-case-guide.html\" target=\"_blank\" rel=\"noopener noreferrer\">Business Case Guide<\/a> or the best-selling\u00a0<a title=\"Business Case Essentials\" href=\"https:\/\/www.business-case-analysis.com\/business-case-essentials.html\">Business Case Essentials<\/a>. Download these resources and more from <a href=\"https:\/\/www.business-case-analysis.com\/master-analyst-shop.html\">The Master Analyst Shop! <\/a>\u00a0 Or, take the 3-day fast track: Learn and practice the premier case building methods at a <a title=\"Business Case Seminars\" href=\"https:\/\/www.business-case-analysis.com\/business-case-seminar.html\">Business Case Master Class Seminar<\/a>.<\/p>\n<p>To learn more on the IIBA <a href=\"https:\/\/iiba.org\" target=\"_new\" rel=\"noopener\" aria-label=\"International Institute of Business Analysis click here\">International Institute of Business Analysis click here<\/a>. For info on the IBF <a href=\"https:\/\/ibf.org\" target=\"_new\" rel=\"noopener\" aria-label=\"Institute of Business Forecasting click here\">Institute of Business Forecasting click here<\/a>. See also the Forbes Guide to GAAP <a href=\"https:\/\/www.forbes.com\/advisor\/business\/generally-accepted-accounting-principles-gaap-guide\/\" target=\"_new\" rel=\"noopener\" aria-label=\"Generally Accepted Accounting Principles\">Generally Accepted Accounting Principles click here<\/a>. For a brief summary of <a href=\"https:\/\/coachingauthority.net\/blog\/2017\/11\/8\/six-key-principles-of-decision-making\" target=\"_new\" rel=\"noopener\" aria-label=\"Six Key Principles of Decision Making\">Six Key Principles of Decision making click here<\/a>.<\/p>\n<p style=\"text-align: left; line-height: 200%; text-decoration: none;\">By <a style=\"margin-right: 1pt;\" title=\"By Marty Schmidt\" href=\"https:\/\/www.business-case-analysis.com\/about-author-marty-schmidt.html\" rel=\"author\">Marty Schmidt<\/a>. Copyright \u00a9 2023.<br \/>\nSolution Matrix Limited, Publisher.<\/p>\n<hr \/>\n<footer>\n<p style=\"text-align: center; font-size: 90%;\">Solution\u00a0Matrix\u00a0 Ltd<sup>\u00ae <\/sup> 292\u00a0Newbury\u00a0St\u00a0Boston\u00a0MA\u00a002115\u00a0USA<br \/>\nPhone +1.617.430.5307\u00a0\u2022\u00a0<a title=\"About Solution Matrix Ltd\" href=\"https:\/\/www.business-case-analysis.com\/contact-form.html\" target=\"_blank\" rel=\"noopener\">Contact\u00a0Form<\/a> \u2022 <a title=\"SML Privacy Policy\" href=\"https:\/\/www.business-case-analysis.com\/privacy-policy.html\" target=\"_blank\" rel=\"noopener\">Privacy Policy<\/a><br \/>\n<a href=\"\/solution-matrix-limited-corporate-and-legal.html\">About Us<\/a>\u00a0\u2022\u00a0<a href=\"\/sitemap.html\">Sitemap \u2022\u00a0<\/a><a title=\"SML Terms and Conditions of Service\" href=\"https:\/\/www.business-case-analysis.com\/terms-of-service.html\" target=\"_blank\" rel=\"noopener\">Terms of Service<\/a>\u00a0\u2022\u00a0<a title=\"SML Refund policy\" href=\"https:\/\/www.business-case-analysis.com\/refunds.html\" target=\"_blank\" rel=\"noopener\">Refunds<\/a><br \/>\n<a title=\"SML Customer Service\" href=\"https:\/\/www.business-case-analysis.com\/customer-service-guarantee.html\" target=\"_blank\" rel=\"noopener\">Customer Service<\/a>\u00a0\u2022\u00a0<a title=\"Your online security and safety\" href=\"https:\/\/www.business-case-analysis.com\/security-and-safety.html\">Safety &amp; Security<\/a><br \/>\nCopyright \u00a9 2004\u20132023 by Solution Matrix Ltd<\/p>\n<\/footer>\n","protected":false},"excerpt":{"rendered":"<p>Captain&#8217;s Log, Entry 8172.5\u2014Non-financial and so-called Soft Benefits outcomes from an investment or action deserve value and a place in the business case\u2014when they help meet important business objectives. Non-financial and so-called Soft Benefits belong in the business case when they contribute to meeting business objectives. Important benefits from an action are sometimes hard to &hellip; <a href=\"https:\/\/www.business-case-analysis.com\/blog\/soft-benefits-business-case\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Do Soft Benefits Really Belong in a Strong Business Case?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":145,"featured_media":7845,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"aioseo_notices":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/posts\/8739"}],"collection":[{"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/users\/145"}],"replies":[{"embeddable":true,"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/comments?post=8739"}],"version-history":[{"count":23,"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/posts\/8739\/revisions"}],"predecessor-version":[{"id":9059,"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/posts\/8739\/revisions\/9059"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/media\/7845"}],"wp:attachment":[{"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/media?parent=8739"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/categories?post=8739"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.business-case-analysis.com\/blog\/wp-json\/wp\/v2\/tags?post=8739"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}