For decades, governments, banks, hospitals and schools have relied on data tools to decide who is efficient and who is not. However, according to new research from the University Surrey, many of these rankings are flawed, because they ignore the impact of time and shocks like recessions or pandemics.

The study, published in Expert Systems With Applications, has developed a new approach, Time Envelopment Analysis (TEA), that shows how organisations’ efficiency changes over time. Using real-world economic data from 63 countries, the study found that standard methods routinely misrepresent performance, failing to account for sudden disruptions or gradual improvements.

Unlike existing approaches, TEA looks at performance over time instead of as a single snapshot. It combines three tools: one that tracks how shocks like recessions play out, one that ranks efficiency between organisations and one that checks how outside factors affect results. After running 400,000 tests, the research team showed TEA is far more reliable than the old methods.

Dr Mehdi Toloo, co-author of the study and Reader in Business Analytics at the University of Surrey, said:

“Too many decisions about funding, investment or even hospital safety ratings are based on outdated efficiency tools that freeze organisations in time. Our method recognises that businesses and governments do not operate in a vacuum. By accounting for shocks – whether financial crises, pandemics or supply chain disruptions – we can provide a far more realistic picture of performance. This matters because mismeasuring efficiency leads to bad policy, wasted money and unfair comparisons.”

The study shows that TEA is especially accurate when organisations face smaller recurring shocks, such as gradual declines in technical efficiency, but can also handle larger disruptions. In practice, this means TEA could help governments assess how health systems recover after crises like Covid-19, or help businesses understand how investment in new technologies pays off over time.

Dr Toloo continued:

“TEA would improve accountability and policy by replacing one-off efficiency scores with dynamic assessments that better reflect reality. For decision makers, this means fairer comparisons, better risk management and stronger evidence to support reforms.”

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