- September 28, 2021
- Posted by: Manuels Effe
- Categories: Insight, Value For Money
From the reassuring conclusion of our first discussion on value for money when it emphasized that we can Do More With Less by applying the principles of Value for Money, it is important that we familiarize ourselves with its underlining structure so as to gradually get to grips with the basic elements for it all. We will begin this with Programme or Transaction Logic as it underlines all transactions we carry out as individuals, companies or government.
The word ‘Programme’ or “Transaction’ is loosely used and it encompasses for example, an Individual purchasing a car, a company building a production plant as a project, a health education programme embarked upon by a not-for-profit organization or a massive adult education programme carried out by government.
A Programme or Transaction is defined by the Dot.com dictionary as a specially arranged selection of things to be done, usually comprising of Strategic Objective, Input (staff, consultants, raw materials and capital that are used to produce output), Activity or Process, Output or Results delivered by the programme or transaction usually the result from the process and the ultimate Impact of the result.
Every transaction, project or programme must as a necessity have these elements and it is the understanding of these elements and how the inputs and activities or processes are prudently applied and implemented that stimulate value for money results.
The Programme or Transaction Logic is fundamental to understanding and evaluating value for money and its components are reviewed below so as to establish a very clear understanding.
We start with the Strategic Objective which sets out the desired Quantitative and Qualitative outcome of a transaction or programme. It requires that the desired outcome of a transaction, expenditure, project or programme is properly defined after a robust and lucid strategic planning process. This is, however, usually not the case as we do not in most cases precisely define what we want out of a transaction which makes it difficult in determining whether or not the objective is met.
As expected, a housewife, desirous of buying a cooker, should define the type she wants, purpose and benefits. A company, investing in staff buses should have it properly defined. The same for a government that wants to build an office accommodation in preference to renting one. It would have to define the sort of office accommodation it requires, cost, time it will take to build and its purpose. Strategic objectives are required to be unambiguous with a clear baseline against what the final outcome can be compared.
And to achieve an objective, Inputs are applied. Inputs, also referred to as resources, are in various forms and range from financial input in the form of budget, precisely the financial outlay, physical inputs, varying from buildings to equipment, data inputs, largely the information flow, human inputs made up of all grades of staff to system inputs, which lays out the procedures etc.
The next element is Activity or Process, which is usually a systematic series of actions that embody all of the actions that transform inputs into outputs or a series of actions or steps taken to achieve a particular end. They are also a collection of tasks and work-steps performed to complete a project or programme and could include actions as an activity or process. Planning the construction of a building will involve land purchase, architectural and structural drawings and getting a builder to carry out the work. Processes are important because they impact positively or negatively on the planned objective.
A well marshaled process or activity delivers a good output. Known generally as products of a transaction; outputs are harvests of a process or activity. The goods or output of a yam farmer is yam production, the output of a medical doctor is healing of patients, just as the output of a trip to Benin is safely arriving there.
From of all these, we get our results or outcomes – the immediate positive or negative short-term effects of outputs on targeted beneficiaries, taking for instance, the impact of constructing an inter-state road, aimed unequivocally at opening up communities on that route and improving commercial activities. The impact of a successful healthcare service is when people live longer and healthier. However, impacts could be positive or negative. For instance, if you negotiate with criminals, while it could present an immediate short term solution, it stands to encourage more people into crime, being a norm for people to gravitate to what is rewarded.
On the whole, transaction or Programme Logic presents the clearest understanding of a cause-and-effect relationship among inputs, activities, outputs, outcomes (results) and Impacts and a framework for planning, implementing, monitoring and evaluating whether a transaction has given the best value. Most importantly, it makes process improvement possible as we apply the lessons learned from past mistakes in inputs and processes to get better as we progress.
Acquisition of resources as inputs in a process determines economy and minimizes cost of used resources with regard to quality, quantity and price. Use of inputs in a process to produce outputs determines its efficiency as the relationship between outputs, e.g. goods, services etc. and resources used to produce them determine the extent to which intended outcomes are achieved by outputs from a process to determine its effectiveness and the extent to which objectives are achieved and how the relationship between the planned and the actual impacts a service.
It should be noted, however, that Outcomes are subject to other influences outside the actions of outputs. Good examples are cases of peer influences that confuse students even when all other factors are standard, community conflicts that disrupt project construction, and even a poor attention by a cook to the cooking process.
Understand the Programme or Transaction logic and regularly apply it to plan, implement and review your transaction and you will be on your way to do more with less. It will be it if you stay applying the Value for Money Principles.
Be a more Value for Money enthusiast and player, go with us on our coming editions.