What is Value for Money?

Value for Money (VFM) is a performance management tool that uses data to understand the process of translating money into results (outputs), and the degree to which these results actually improve the lives of the poor (outcomes and impact). Value for Money is known for:

“…maximising the impact of each pound spent to improve poor people’s lives.”
— Department for International Development, 2011
… effective, efficient, and economic use of resources, which requires the evaluation of relevant costs and benefits, along with an assessment of risks, and of non-price attributes and/or life cycle costs, as appropriate.
— World Bank, 2016

How programmes use VFM Analysis

Value for Money helps programmes plan, execute, and manage complex operations, targeting the attention of all levels of operational management on achieving sustained results at cost.

Now more than ever, the push for evidence-based decision making and sustainability metrics are driving the need for VFM. Programmes use this analysis to:

  • Report to donors and prepare for other external reviews;
  • Assess key processes to mitigate risks;
  • Guide programme operations; and,
  • Secure competitive advantage in tendering.

The nuts and bolts

VFM analysis begins by assessing the “Four E’s” of programme operations: Economy, Efficiency, Effectiveness, and Equity. Using data, (e.g. programme results, financials, partners, regions, internal processes, sustainability, and beneficiary uptake), our Makana VFM ManagerTM reports on cost-efficiency, cost-effectiveness, sustainability sensitivity, unit-costs, regional analysis, implementing partner assessment, procurement, contracting models, and more.

If you are currenlty using Excel to assess Value for Money, you may want some advice to overcome the problems with Excel (crashes, hidden macros, lost data), contact us. We’d be glad to provide an hour of free advice to keep your VFM analysis moving forward.

Jump-starting VFM Management

Makana VFM ManagerTM is an easy-to-use cloud-based software, that includes a comprehensive suite of data collection, calculation, and visualization tools. Provided by programme for three years with prorated extensions, it enables powerful VFM reporting almost immediately.

To get started, we’ll guide the collection of data, input all past data, and train programme staff to use, update, and create VFM analyses for automated export for all your reporting needs. Makana VFM Manager brings all data and VFM calculations together in secure database software, visualizes VFM charts and tables, and collates evidence for strong programme management and reporting.

Makana VFM Manager customizes analysis to different user view levels: senior management sees an overview of programme VFM with capacity to drill down to any data level; regional managers see data for their focus areas and responsibilities; implementing partners see analytics focused on cost and results data for their outputs and responsibilities.