Now I once heard you talk about ‘monetising time’ can you elaborate on that?
In the business world, because this programme of education is mainly focused on the business world although it does apply in your private life just as well, but in the business world we’re going to make business decisions as we go through this course where how we decide what to do with a particular activity is going to be based on return on investment. And the unit of measure for return on investment is money.
So ‘monetising time’ is recognizing a monetary value to the time. And it also is recognising that times value varies. If you’re paid a $1000 an hour or if you’re paid $10 an hour the unit of time per hour varies based on the level of skill and ability or the marketplace determines what that time is worth. We need to monetise time - add a value to it - so that we can do analysis with it.
And business cost, how does that come into play?
Business costs are a challenge because frequently staff will comment relative to their time, that their salary is their hourly rate. And you can’t just do an analysis on the value of time based on a person’s hourly rate.
You can’t do that for two reasons.
The first reason is their hourly rate doesn’t include all of the on costs, the superannuation and the infrastructure costs that need to be analysed.
And the second area is that the hourly rate doesn’t include non-productive time when they’re sick or on vacation or having public holidays where they’re still paid.
Those two things vary, so in the business cost area it’s a matter of looking in the first instanced at all of the infrastructure costs that provide you as a productive human being. It’s your hourly rate which may be $20 or $30 an hour, it’s the office space you occupy, it’s the software tools that you need to do your job, it’s the superannuation that must be paid.
All of those expenses, and we’ve got a complete list of them in the software tool - all of those need to be taken into account to determine the total expense relative to an hour of an individuals’ time.
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