In This Article
How the Annualized Benefit Calculation Method is activated
Overview
Idea or Initiative Benefits are the financial and non-financial values that Ideas/Initiatives are expected to deliver over their lifecycle. They represent the measurable outcomes and improvements that result from implementing an initiative. The idea's benefits can be accessed in the Benefits menu from the Ideas module.
There are 2 types of Benefit Calculation Methods, the Monthly Benefit Calculation Method and the Annualization Benefit Calculation Method. In this article, we will explore how the Annualization Benefit Calculation Method works.
Note: The Annualization Benefit Calculation Method is the default calculation method used in the WiredUp system.How Annualized Benefits are calculated
Once the Monthly Benefit Method has been activated, the following changes will take place:
- VDT values will appear as 'Annualized Benefit' in the Idea Benefit Grid
- Manual Capture values will display as 'Target Annual Benefit' in the Idea Benefit Grid
- All users will see annualized benefit calculations consistently throughout the system
On VDT Calculation Method:
- The Annualized Benefit value is sourced from the Benefits values obtained from the root/output node of the VDT.
- The Benefits per Day is calculated as: Annualized Benefit / Benefit Duration
- The Benefit for Month is thereafter calculated as: Benefit per Day * Production Days in a month
On Manual Capture:
If ONLY the improvement value has been captured On Idea Overview:
- The Annualized Benefit is equal to the Improvement Value
- The Benefit for the day is calculated as: Annualized Benefit / Benefit Duration
- The Benefit for Month is calculated as: Benefit per Day * Production Days in a month
If the Improvement Value AND Actual Monthly Benefits have been captured:
- The Benefit for the Month is obtained from the captured 'Actual Monthly Benefit' for the month
- Benefit per Day is calculated as Benefit for Month / Production Days
- The Annualized Benefit is calculated as Benefit per Day * Benefit Duration
- The Target Annual Benefit is equal to the Improvement Value
Note: the same benefit calculation methods will be applicable to Non-Financial Benefits either in VDT or Manual Capture Method
How the Annualized Benefit Calculation Method is activated
The Annualized Benefit Calculation Method is on by default in the system. If the site administrator would like to transition from the Monthly Benefit Calculation Method to the Annualized Benefit Calculation Method, follow the steps outlined below:
1. The site administrator can activate the site setting by selecting the Annualized option under the Benefit Calculation Method site setting.
- For PMO users, the site setting is located on Portfolios > Site Configuration > Settings > Idea
- For CI users, the site setting is located on Organisation Structure > Site Configuration > Settings > Ideas
Note: the site setting is set as Annualized Method by default
2. When activating this feature, a warning message will appear first. After reviewing the warning, site administrators can click Continue to proceed with the activation.
The benefit calculation method change will not affect ideas/initiatives in Cancelled, Completed, or Archived status. These ideas will retain the calculation method that was in place when they reached their current status.
3. Once the Annualized Benefit Calculation method has been activated, an e-mail is sent to Idea Owners and Idea Facilitators to notify them that their administrator has enabled the Annualized Benefit calculation method for all Ideas/Initiatives within their site. The e-mail sent is similar to the one displayed below
4. The following occurs during the update to the Annualized Benefit Calculation Method
- Ideas undergoing the annualized benefit calculation method updates will display an "Updating Benefit Calculation Method" warning message until the process is complete.
- Ideas being updated to the annualized benefit calculation method will remain in read-only state until the update is completed
- Ideas in Cancelled, Completed, or Archived status will be skipped during the calculation method update process.
When copying or changing an idea or initiative status from Cancelled, Completed, or Archived to Active, Approved, or On-hold, users will see an updated modal message with an information icon explaining that the benefit calculation method will change.Summary
Annualized Benefit Calc Method (Using VDT)
Line Item | Calculation |
Cash In Forecast | Sourced from the Cash Flow Table |
Cash In | Sourced from the Cash Flow Table |
Cash Out Forecast | Sourced from the Cash Flow Table |
Cash Out | Sourced from the Cash Flow Table |
Benefit Per Day | Annualized Benefit / Benefit Duration (Idea Benefit Duration) |
Benefit For Month | Benefit Per Day * Production Days |
Production Days | Sourced from Calendar Site Setting |
Ongoing Benefit | Benefit For Month |
Target Benefit | (Improvement Value / Benefit Duration) * Production Days |
Net Target Benefit | Target Benefit less (Cash In Forecast plus Cash Out Forecast) |
Annualized Benefit | Benefit Value for the month (Actual less Baseline) |
Target Annual Benefit | Improvement Value (Target less Baseline) |
% of Target Improvement Achieved | (Benefit Value / Improvement Value) * 100 |
Variance vs Target Annual Benefit | Benefit Value less Improvement Value |
Annualized Benefit Calc Method (Manual Capture)
Line Item | Calculation |
Cash In Forecast | Sourced from the Cash Flow Table |
Cash In | Sourced from the Cash Flow Table |
Cash Out Forecast | Sourced from the Cash Flow Table |
Cash Out | Sourced from the Cash Flow Table |
Benefit Per Day | Annualized Benefit / Benefit Duration |
Benefit For Month | Benefit Per day * Production Days |
Production Days | Sourced from Calendar Site Setting |
Ongoing Benefit | Benefit For Month |
Target Benefit | (Improvement Value / Benefit Duration) * Production Days |
Net Target Benefit | Target Benefit less (Cash In Forecast plus Cash Out Forecast) |
Annualized Benefit | Improvement Value (Manual Capture from Idea Overview) |
Target Annual Benefit | Improvement Value (Manual Capture from Idea Overview) |
% of Target Improvement Achieved | (Annualized Benefit / Target Annual Benefit Value) * 100 |
Variance vs Target Annual Benefit | Annualized Benefit less Target Annual Benefit Value |
Annualized Benefit Calc Method (Manual Capture) - When 'Actual Benefit for Month' is captured
Line Item | Calculation |
Cash In Forecast | Sourced from the Cash Flow Table |
Cash In | Sourced from the Cash Flow Table |
Cash Out Forecast | Sourced from the Cash Flow Table |
Cash Out | Sourced from the Cash Flow Table |
Benefit Per Day | Benefit For Month / Production Days |
Benefit For Month | Captured 'Actual Benefit for Month' |
Production Days | Sourced from Calendar Site Setting |
Ongoing Benefit | Benefit For Month |
Target Benefit | (Improvement Value / Benefit Duration) * Production Days |
Net Target Benefit | Target Benefit less (Cash In Forecast plus Cash Out Foreca) |
Annualized Benefit | Benefit Per Day * Benefit Duration |
Target Annual Benefit | Improvement Value (Manual Capture from Idea Overview) |
% of Target Improvement Achieved | (Annualized Benefit / Target Annual Benefit Value) *100 |
Variance vs Target Annual Benefit | Annualized Benefit less Target Annual Benefit Value |