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If you can’t measure it …

“If you can’t measure it, you can’t manage it.”

Variants of this quotation and are attributed to Austrian-born American management consultant, educator and author Peter F Drucker, a man described as “the founder of modern management”. Whether or not you subscribe to this binary view, our day-to-day experiences tell us that well defined and consistently collected data (both quantitative and qualitative) can indeed provide us with powerful decision support information.

It has been over two years since Outcare embarked on a quest to learn more about itself as a means of both affirming whether its service delivery model was delivering the intended benefits to clients and gaining assurance that it was not exposing itself to undue commercial risk by entering into service contracts which used the language of outcomes rather than outputs. A quest to specify and measure outcomes.

Since the implementation of the Delivering Community Services in Partnership Policy (DCSP), by the Western Australian State Government in 2011, the relationship between funded Not-for-profit organisations (NFPs) and those government agencies that purchase largely human services has changed. Central to this change has been the broad adoption of the Person Centred Care and Individualised Funding policy frameworks that have, among other things, led to a requirement for funded NFPs to identify outcomes for use as a measure of performance rather than the more traditional outputs focus of previous funding policies.

Funded NFPs must identify and agree their proposed outcomes with their funding agency and then report against these in order to demonstrate the value of the work they are contracted to undertake. They do this via a tender process.

In particular, the outcomes aspect of the funding changes introduced by the DCSP provide significant challenges for NFPs, government agencies and the support services sector. Overall, the key challenges are:

  1. Identifying/creating a measurable outcome(s) that demonstrate the attributes of successful activity;
  2. Alighting upon outcomes that allow for reporting timeframes to match financial reporting / contracting timeframes (e.g. financial year) notwithstanding that many human services outcomes see the transpiration of significant time before they can be realised;
  3. Identifying and collecting the data needed to support the measurement of the developed outcomes; and
  4. Reporting outcomes achieved on a regular basis and in a comprehensive fashion such that budgeted and actual outcomes are credible and reliably represent the effectiveness or otherwise of the NFP.

If poor outcomes are designed or proxies for outcomes are accepted that are not reliable and/or credible, the impact on the acceptance and utility of the outcomes is significant and negative—this impacts the funder agency’s reputation, the service provider’s reputation and the overall acceptance of the policy. In short, if the outcomes are not credible they impact the funder, the service provider and the service user negatively.

Credibility, in terms of outcomes, is built by ensuring: (1) that the outcomes are relevant to the objectives of a service(s) in the interests of the service recipient; (2) that data relative to the level of achievement of outcomes is able to be collected in a cost effective way; (3) that the measurement of the outcomes produces greater information value than the cost of its collection; and (4) that the reporting of outcomes influences management decisions and performance assessment.

The DCSP is mandatory policy to be applied in all funding arrangements involving service purchases from NFPs by government agencies. Therefore, organisations such as Outcare must attend to the identification, adoption, measurement and reporting of suitable outcomes attributable to performance measures.

Outcare was early to recognise that the identification and pursuit of measureable outcomes are expected to enhance the capacity of a NFP to both pursue its mission in a meaningful way and to demonstrate that it is effective. The building of this capacity is, of course, in the interests of the service recipient, funder and service provider. Therefore, while this as change process presents challenges for government and the NFP sector, organisations like Outcare will ultimately see their clients benefit from services provided that are demonstrably enhancing outcomes.

Outcare was also quick to respond to these matters and has to date invested in commissioning two separate consulting projects, the most recent of which was aimed at developing an Outcome Measurement framework and implementation plan.

The identification, creation and reporting of outcomes for any human service type is always complex and difficult. The challenges faced include both identifying the most appropriate outcome to measure, the best way to measure it and the most effective way to report it. This requires clear lines of attribution from the activities and processes implemented through to the outcome so that reporting of outcomes is demonstrative of the effectiveness of the provider’s work.

The investment Outcare has made and continues to make toward the identification and measurement of outcomes is critical to its future success and demonstrates the commitment that Outcare maintains toward creating real opportunity for its clients.