Valuing the DoD process output

• Main Authors: Bourazanis, Petros, Gusnadi
• Other Authors: Housel, Thomas J.
• Published: Monterey, California. Naval Postgraduate School 2012
• Online Access: http://hdl.handle.net/10945/9964

MBA Professional Report === The Department of Defense (DoD) is facing the challenge to discover a tool to measure its performance as part of its responsibility to taxpayers. As a public institution that provides a public good to the people, the DoD has difficulties in using the prominent investment financial ratios used by the private sector as a metric of their performance. The problem is that DoD does not generate revenue and simultaneously, in many cases, a huge amount of money, as an investment, is spent in favor of its mission without further analysis about the efficiency of this investment. The DoD, by operating more efficiently could increase the value of the output its produces. They should try to enhance the knowledge of their human resources. To measure this knowledge, a methodology called Knowledge Value Added (KVA) is available that enables every organization to value their performance by creating common output in terms of Knowledge units. By creating common units for different organizations, including non-profit organizations, it is then possible to use market comparables to ascertain which organization is more efficient and additionally to value their process output.