SROI Analysis: Stage 3

Sep 8, 2020 | by Fajri

SROI Analysis: Stage 3 Evidencing outcomes and giving them value

This blog is a part of SROI analysis series. In this blog, we will talk about the third stage of the SROI analysis – Evidencing outcomes and giving them value. 

SROI analysis stage 1: Establishing Scope And Identifying Key Stakeholders

SROI analysis stage 2: Mapping Outcomes

In the previous stage, we learned how outcomes can be mapped out and described. The next step is to develop outcome indicators that will be used to collect evidence on outcomes that are occurring for stakeholders. How do we know whether an outcome has occurred? What helped in concluding the same? An outcome indicator is the answer to that. 

For example, how can we establish that the development of public spaces in and around West Java has led to better health in residents, especially among the elderly? The same can be measured and established by gathering information about the number of hospital visits by the elderly as a result of an increased physical activity undertaken at the newly developed park. The reduction in the number of hospital visits by the elderly could be an indicator to establish that the outcome has taken place. The significance of these outcomes will then be assessed by assigning a monetary value to them.    

SROI analysis stage 3 involves four steps: 

  • Developing outcome indicators 
  • Collecting outcomes data 
  • Establishing how long outcomes last 
  • Assigning value to outcomes

3.a Developing outcome indicators 

As stated in the previous two blogs, the only way to measure any change is by measuring outcomes. Developing indicators is a means by which it can be assessed whether an outcome has occurred and by what degree. The next step will be to fill out these outcome indicators in the impact map. Since the outcomes are linked with the stakeholders and concern them, the best way is to engage with them and discuss the indicators in the process of evidencing the outcomes. 

For example, the best way to measure the changes in the fitness level and health of the residents of areas near West Java – as a result of the development of public spaces – is by asking them about the same. If the outcome is ‘better health and fitness in the residents’, then the possible indicators could be fewer hospital visits by the elderly. Most residents reported having lost weight and feeling more agile, this could be another indicator. 

Tip: Remember, while developing the indicators, maintaining an objective standpoint toward subjective data is necessary. For example, While an increased number of hospital visits by a certain group say the elderly population, would be a negative outcome indicator, it would be a positive one for the underprivileged lot who previously did not have easy access to clinics. Therefore, balancing out subjective and objective indicators becomes important.   

Another important thing is to ascertain whether or not it is possible to measure these indicators within the scope and given the resources available at hand. Do your research on whether or not it will be possible to measure the indicators in the future. In the case of an evaluative SROI, see if the cost of measuring the indicators – gathering data and information, conducting surveys, and contacting distant stakeholders – can be met feasibly.  

Tip: If an outcome is important but difficult to measure, ensure that the deed is done. Some indicators are often easy to measure but may not be that relevant or associated with a material outcome. Make sure you choose wisely in this regard. It is better to find multiple indicators for each outcome.

3.b Collecting outcomes data 

After you have finished developing the indicators, it is now the time to collect relevant data and information on the same. There may be a need to tap new sources to get data or turn to existing sources for the purpose. 

This step simply gives the information of the source of the indicator that you have developed. It could be based on your research, experience, or other people’s experiences. 

To begin with, published research, market research firms, consulting companies, could be some of the places from where the information could be gathered. In the case of carrying out a forecast analysis, regular interaction with stakeholders could help in collecting relevant information about outcomes and possible indicators. You can fall back on existing data and other resources available at hand in case of an evaluative SROI analysis. It is better to perform this activity in this manner rather than gathering data about the outcome after the event.

Some of the many ways to collect such information would include surveys and interviews, questionnaires, seminars, case studies, and workshops.

The sample size of your client depends on the scope and resources available. At the end of the day, you should be satisfied with the data and information that has been gathered. It must be relevant.

Consider this example for the ‘Redefining West Java’ project:

  • Stakeholder: Elderly resident of West Java
  • Outcome: Improved fitness and health
  • Indicator: Reduced HDL/LDL, hypertension, blood sugar level; improved agility; fewer hospital visits.
  • Data collection: Telephonic follow up; quarterly visit by a representative 

Indicators can also be quantified. For example, the elderly visited a general practitioner a total of 6 times in three months as opposed to ten visits previously. 

Tip: Indicators related to wellbeing were once thought to be difficult to measure. There could be other indicators that would seem impossible to measure, however, if they’re related to a significant and material outcome, devise a way to measure them. Conduct some research to figure out what has already been done concerning the indicator that you are dealing with. Be cautious of double-counting the outcomes. Ask yourself if you are counting the same value for a particular stakeholder, twice. 

3.c Establishing duration of outcomes  

Now is the time to determine how long the outcomes, or the benefits stemming from them, have lasted. Some outcomes may last longer than others. For example, in the case of the West Java redevelopment project, the health benefits that the elderly population reaped as a result of the opening up of an open gym could be long-lasting. Such long-lasting outcomes are also expected to generate value, especially those that continue to last even after the completion of the activity. The timescale is nothing but the duration of the outcome or the ‘benefit period’.

Again, this kind of information can be directly sourced from your stakeholders or research and case files. 

Tip: In cases where the duration of the outcome is expected to run over years after the completion of the activity or the project, make sure you have a strategy in place to gather relevant data and information to support the duration of the outcome. 

Simply put, this step is all about establishing a rationale behind the duration of an outcome stated by you. Always document your rationale properly.

For example, the elderly population of West Java reported fewer visits to doctor’s clinic for up to a year, after which most of them, who were above the age of 65 years, developed age-related co-morbidities and had to visit a hospital more often. As a result, some could not use the open gym and park as often as they would previously.  

Always remember, the duration of the benefit of an outcome should not be confused with the longevity of any asset involved. For example, a computer training programme that also provided free keyboards to the participants may have yielded years of benefits in form of an added skill and possible job opportunities, however, the keyboard provided may only last a couple of years.   

3.d Putting a value on the outcome

The next and final step in this stage is to assign a monetary value to the outcomes. For example, when the elderly population paid fewer visits to the doctor, it led to savings worth Rs $80 per person for three months on the clinic visit. This is an example of assigning a monetary value to one of the indicators of an outcome. Fewer hospital visits is an indicator of the outcome – improved health and fitness in the elderly. This way, several other indicators of an outcome can be assigned a value so that ultimately, the outcome has a monetary value assigned to it. This step helps in establishing the significance of an outcome.  

Financial proxies will help you assign a value to an outcome. 

  • Consider this example for the ‘Redefining West Java’ project:
  • Stakeholder: Elderly resident of West Java
  • Outcome: Improved fitness and health
  • Indicator: Reduced HDL/LDL, hypertension, blood sugar level; improved agility; fewer hospital visits.
  • Proxies: Cost of membership of a recreational club; cost of health insurance; cost of visiting doctor’s clinic

Tip: You can identify proxies with the help of your stakeholders. They may not be able to help you fix a value to the outcome related to them, however, they can share with you what the change is worth to them. 

You can identify proxies concerning unit cost and changes in income with some research and estimates of your own and those provided by case studies, government data and information by research bodies.

How to choose credible financial proxies?

Make sure that the proxies that you are considering have been used before or extensive research has been carried out on them by your organization. Proxies can also be determined from market research and by drawing comparisons.

For example, to assign value to ‘fewer hospital visits, the organisation decided to stick to in-house research which favored the Central government’s service cost book for the purpose.

Tip: Document the reason behind the choice of proxies. Alternative proxies that were considered may also be discussed.

This way, your impact map can now have data on indicators, their sources and quantity; duration of the outcomes; financial proxies; values assigned to outcomes and source of financial proxies. 

That’s all about SROI analysis stage 3, you are now ready to move on to the fourth stage of the SROI analysis. The next phase of the analysis will deal with ‘establishing the impact of the activity. We’ll learn in detail about the stage in the next blog. 

SROI analysis stage 3 & the overall concept is sourced from SVI.

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