The Insider: Quantifying the unquantifiables
I don’t know about you, but I really enjoy evaluating a new product and trying to make a business case for it, and then seeing how other consequences of its use might come into play to give added value.
I’m currently looking at a new product which should help our drivers improve their behaviour, using some weird reverse psychology. The costs, as negotiated, are quite straightforward, but working out the cost in terms of benefit is much harder.
Clearly the vendor puts forward their most optimistic case studies, often citing companies who have seen massive savings, largely because they had absolutely no risk management in place before. Whilst we know we are already driving savings, benefitting from eco-driving courses and mileage capture, sadly we are like many other fleets in that the unknown quantity is the nut behind the wheel. Room for improvement, in other words. But the question is, how much?
I can see that improved driver behaviour will lead to even better fuel consumption, and I know the cost of my fuel purchase. So that saving is easy to quantify, and if (when) the cost of fuel rises again the saving will be even better. I know the bent metal cost of our accidents, and the proportion which are fault versus non-fault; taking a view on the likely percentage drop in both, emanating from a smoother driving style and greater awareness, is more difficult. Based on our existing record, I suspect the drop will be half the maximum proposed by the vendor. Still a good saving though.
But it’s the costs beyond that which get more difficult to quantify. For instance, if we have less at fault accidents, we will require fewer short term hire cars and associated unrecoverable costs; again, I can have a stab at that figure.
Related loss of productivity will depend on the potential productivity of those most likely to stop having accidents, and their level within the company. There must be an algorithm for this kind of stuff but it’s escaping me at the moment. Shall we even start to think about time off work, costs of hiring in staff, or the stress on those picking up extra work to cover absent colleagues?
Then there is the issue of eloquently communicating the new procedures, and the dangers of not effectively combatting the inevitable resistance. In this case I’m told drivers will hate the system for a brief initial period and that then it will become second nature. Wrongly communicated, and with even a sniff of a suggestion of Big Brother, we will have a whole load of worry on our hands, completely unquantifiable.
So if I think this latest venture is a really good idea, my business case has to make the figures look good, and if you report to a Finance Director who sees things only in terms of black and white on a page, it becomes doubly difficult because of all the unquantifiables. If you report into Human Resources, they will get the emotive reasoning, and the product is easier to sell.
Looking on the bright side, as I said at the top, new ideas can bring other unexpected benefits too. For instance, when we rolled out our mileage capture product, a great side effect was the ability to see which employees were visiting which customers and when; whether people from different departments were going in to see them separately, but might have a better effect making a joint visit; who wasn’t getting seen at all, and who was having trouble getting out of bed in the morning. That was on top of cutting out optimistically calculated business mileage, bringing in the necessity for accurate and timely submission of information by all drivers, and a great audit tool to prove compliance to HMRC.
So if we decide to take this new product, what will be the additional upsides? Fewer penalty charge notices to administer – well that must be a good thing. But also a very visible message to our customers and employees alike that we are looking after our drivers’ welfare in a positive way.