Value Case Methodology

Sustainable ideas, technologies and innovations are plentiful, but how do you make the best joint decision together with your partners? When you are contributing to big social issues you could be dealing with large consortiums, where each party mainly promotes its own interests and trade-offs in the decision process. The value case methodology enables you to reach concensus.

Transition trajectories where joint action needs to be taken and where prospects remain blurry are often threatened by a lack of investment. For example, the value that the investment in sustainability generates for each party remains unclear, the risk seems higher than the return, financial considerations predominate the discussion, or private negotiations make it difficult to come to an agreement.

The Value Case Methodology enables us to help you map all the values of the consortium members in a comprehensive, independent and objective manner, and use these to align your objectives. This allows you to reach a widely accepted investment decision in a joint project. The method has four steps. After each step, you can move forward and take a decision. If you are not yet ready to take a decision, you should proceed to the next step.

Four steps

Step one is Design. Suppose that you and other stakeholders are considering to invest in district heating. What are the actions that need to be taken and by whom, which party takes what part of the costs and benefits, and who carries the risk? Communication about these types of questions offers clarity about the objective of the investment both for yourself and for the other parties involved.

The second step is Quantification. We offer insight in the values that you gain relative to your objectives. In this step we help you quantify the impact of the decision against objective measures: From financial and social effects to environmental impact.

Step three is Valuation. Suppose that you want to reduce the CO2 emissions or retain the autonomy of a region. Both will lead to costs. How do you trade off what is important? The subjectivity of the answer is likely to complicate matters. A building society has different wishes and deems other aspects important than, for example, a house owner. The Value Case Methodology allows us to extract objectives from stakeholders and transform these into a single combined value for each party, the so-called economic utility.

Negotiation is the fourth and final step. The design step establishes how the costs and benefits are divided among the parties in a consortium. A decision-maker may decide in step two or three that the trajectory contributes insufficiently to the objectives. For example, because it becomes too expensive, the environmental benefits are too little, or independence is at stake. In the fourth step we support you with the exchange of values in the negotiation process and to reach a plan that is favourable for all parties.

Already applied in practice

The Value Case Methodology has already been applied in practice. For instance, we were asked to assess the profitability of storing energy in a parking garage. This assessment allowed the project partners to anticipate the increasing number of electric vehicles and possibilities to produce sustainable energy locally. However, they found that promising locations with lots of electric vehicles tend to be located in bigger cities. In such cases, interests of several parties are bound to play a role. In addition, realising this concept would require the collaboration between parties from both the mobility and energy domain.

Besides, there is a lot of uncertainty in how transport may develop. What percentage of car owners remains driving on petrol, and what percentage chooses for hydrogen or electric means of transport? And who is responsible for maintaining the battery? We designed several scenarios with the Value Case Methodology. The methodology allowed us to demonstrate the relationship between various parties now and in the future, and provided them with insights which parties and developments are crucial to make this concept work.

Want to know more or contribute?

We assist consortiums in their decision-making process for sustainable innovations and transitions using our Value Case Methodology. The methodology is continuously being improved. Preferably we would like to do that in a practical setting. That is, together with you, in a project. We have experience in investment challenges and decision processes that arise in the energy transition, and also to some extent in the circular economy and mobility.

Can we help you map the opportunities for value creation, such that you can make a balanced decision? Do you want to know more about the methodology? Then do not hesitate to get in touch with us.

Strategic Business Analysis
Contact

Dr. Mirjam Groote Schaarsberg

Email

FOLLOW TNO ON SOCIAL MEDIA

Stay up to date with our latest news, activities and vacancies

TNO.nl collects and processes data in accordance with the applicable privacy regulations for an optimal user experience and marketing practices.
This data can easily be removed from your temporary profile page at any time.
You can also view our privacy statement or cookie-information.