Non-financial benefits can be categorized as: 1) those quantified in non-financial terms and 2) those that are non-quantifiable or intangible. Whether benefits can be quantified, or not, will partly depend on the organization systems and processes, so there is no hard and fast rule.
There is a range of benefits where an indication will be given of whether the benefit can expect to be quantified in non-financial terms or is generally expected to be Non-quantifiable. Organizations should seek to realize these benefits and set targets to achieve them. Measurable targets can also be set for the non-quantifiable benefits by using indirect measures or ‘shadow’ metrics that provide a guide that the benefit is being achieved.
Improved Decision-making
These non-financial benefits need to be included as part of the business case economic assessment. The various alternatives for undertaking the ERM implementation are evaluated across a number of non-financial criteria, such as non-financial benefits, fit with strategic objectives, and risk associated with implementation.
These non-financial criteria are usually assessed by experienced individuals, who score them against a subjective scale (for example between 1 and 10) to indicate whether the non-financial benefits are low, high or somewhere in between.
A higher weighting as evidence given to records in litigation, can minimize the likelihood of criminal penalties and/or regulatory fines. With an ERM environment, records presented as evidence will be complete, and completely credible. By comparison, collections of paper records are often incomplete, unreliable or lost entirely. Whether the record is complete cannot be quantified. The benefit may be quantified indirectly through measurement of percentage of litigation cases won. It may even be quantified as a financial benefit because an organization with an ERM environment may be able to negotiate more favourable terms with its insurers.
Many benefits of an ERM environment combine to facilitate the making of decisions which are completed more quickly, and based on better information. These improvements in decision-making can be extremely valuable, though the value is difficult to quantify. Non-quantifiable, but may be measured subjectively through a survey of management opinion.
A properly-configured ERM environment provides information on which users can rely. Records are up to date and complete. Non-quantifiable, but could be measured indirectly by the percentage of external requests for information (for example arising under the requirement to provide information under Freedom of Information legislation) that can be satisfied immediately.
Improved Management of information.
These non-financial criteria are usually assessed by experienced individuals, who score them against a subjective scale (for example between 1 and 10) to indicate whether the non-financial benefits are low, high or somewhere in between.
Increased confidence can be gained from comprehensive audit trails and access controls. In properly configured ERM, a correctly-filed record can never be lost. A paper file store cannot reliably provide either of these. Non-quantifiable, but can be measured indirectly by sampling the completeness of audit trails.
By default, backup copies of the ERM records will be kept. As long as an effective business continuity plan is in place, these backups can be used to recover records from any disaster which affects the ERM environment. Non-quantifiable, but can be measured indirectly as the forecast time taken to recover from a disaster.
An ERM environment can be configured to provide exceptional awareness functionality by circulating new or incoming records according to specified rules. These rules can specify that new records can be made known to all recipients simultaneously, to unlimited recipients in unlimited locations, or to a selective readership. Non-quantifiable, but can be accessed through a survey of users.
By default, an ERM environment implemented to the expected standard will keep a complete audit trail for every record. This will far exceed the level of control possible over paper records, and may provide a valuable resource in the event of audit or other investigations.Non-quantifiable, but can be measured indirectly by sampling the completeness of audit trails.
Have you gained these non-financial benefits in the implementation of your ERM solution?
Do you think these are important considerations in gaining support for such a solution?
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