Challenging Business Value
A small effort, leveraging a huge impact!
In the past few years we have participated in various ICT-projects. During these
projects we often heard colleagues say: “We have to generate Business Value!”
But what do they really mean by that? We have noticed that there exist quite a
lot of definitions about Business Value. And inevitably, due to these different
perceptions, many projects find it difficult to achieve it. We see this as a missed
opportunity, as achieving Business Value asks for a small effort, but can cause a
huge impact!
Optimizing for and steering towards Business Value determines to a large extend the
success of the project. Making this value visible and manageable during the project is
an important task for the business analyst and the project manager. Once this value
has become manageable to the project team, it will be possible to optimize it through
challenging. In this article we describe the six steps for “Challenging Business Value”.
What is Business Value?
Business Value, in essence, means “something
of value to a company”. Using this definition,
pre-visualizing the value objectively in a project
is quite a difficult, if not an impossible exercise.
If we want to make Business Value truly visible,
we have to understand its characteristics:
 A business is prepared to invest into the
development of a solution to generate
additional value (investment costs).
 A user is willing to use the solution (what
will it cost me as a user) to generate more
value (operational costs).
 The perception of added value (satisfaction)
is determined to a large extend by the value
the product offers to the users and its
environment (useability and social value).
 Whereas the discontentment (dissatisfaction) is determined to a large extend by
negative experiences during product usage
(risk profile).
Based on these characteristics Business Value
can be defined as follows:
Business Value = the sum of the perceived
value and the risk profile, divided by the sum of
the investment costs and the operational
costs during (a part of) the product life cycle.
Why is Business Value hardly visible
in a project?
With the definition as described above, it
becomes apparent which insight we want to
gain. Now that we know this, which signals do
we receive on a daily basis indicating that
Business Value is hardly visible, nor
manageable, in our project?
Below some of the most common pitfalls that
we see in projects.
Hidden in different sources
Not only at the start, but also during execution
of an ICT project, we see that a lot of
organizations find it hard to define the intended
Business Value, as well as making this value
measureable. Quite often this is only considered
once we are well underway delivering regular
project results. By the time we want to make
this explicit we face a large number of diverse
documents, hiding the Business Value and
therefore making it invisible to the organization.
An incoherent set
Quite often we see that several project
members are involved because of their
respective expertise and want to give the
project a direction, following their profession.
For example: the business case of an ICT project
typically composed by a more financially savvy
person; scope and planning of work by the
project manager, whereas the business analyst
or the development team focus on functionality
and quality. The economic variables time,
money and risk often get managed individually
by a project support office. At first glance,
interrelation and intended Business Value seem
to be manageable and measureable, however
the variables have already a life of their own
ever since we started. The interrelation
gradually fades, fragmenting the Business Value
into individual perceptions.
Killing fires
Too often we see that firefighting is still more
appreciated than preventing it in the first place.
And in line with this argument, we see that
delivering a solution is more appreciated than
delivering the best solution. Is it that we have
become satisfied more easily? Is “normal” the
new standard and has “excellent” become
synonym for “too expensive”? If that is the case,
than that is a missed opportunity: especially at
the beginning of a project most benefits can be
achieved at a lower cost. The sooner you
challenge the Business Value, the more Business
Value you will get out of a project!
Time for an approach that has proven itself in
practice: right from the start make Business
Value visible in a practical way and increase this
value during the project in a systematic way.
Time for “Challenging Business Value”!
Six steps to generate more Business
Value in a systematic way
The following six steps can be executed in any
phase of the life cycle of the ICT solution. The
steps are interrelated, resulting in an iterative
way of working. Put differently: step 1 doesn’t
have to be completed fully to start with step 2.
These six steps to systematically generate
Business Value are:
1.
2.
3.
4.
5.
6.
Define the Business Value proposition
Explore the possibilities
Challenge the best fit solutions
Interpretate the Business Value
Determine the plan
Excecute the plan
Step 1 – Define the Business Value proposition
During the first step it is key to make explicit
what the Business Value is the project
contributes to: the proposition. This step gives
us insight into the problem that is at stake or
the opportunity that has been identified. And
given this context in the current situation (as-is),
we make a first translation by describing where
we want to go to (to-be). This translation
divides up into the intended usage on one hand
and the added value to the organization on the
other.
We make the translation of intended results
sufficiently specific to reach a shared interpretation, we add focus by introducing the
steering variables importance and urgency, and
make it measureable through one or more
indicators.
In addition to that, based on the context of the
project and the problem definition, the most
important principles and constraints for the
project are described more specifically. The
results are grouped and accompanied by
measureable indicators.
Step 2 through 4 – from Business Value
proposition towards best-fit solution
Step 1 provided sufficient direction and a
framework to identify ideas and alternate
solutions that need validation (Explore). The
most promising proposals will be optimized for
value during the whole product lifecycle
(Challenge).
Step 5 and 6 – Determine and Excecute the plan
The best-fit solution is determined during these
steps, further detailed with the introduction of
an execution plan. The plan visualizes at which
point in time (parts of) Business Value can be
expected through this solution approach. An
excellent execution of the plan, combined with
steering toward Business Value assures both the
delivery of intended value during the project
phase, as well as delivered value realized during
the operational phase.
Small effort, huge impact
Making value visible and manageable is an
important prerequisite to create more value. By
embedding this competency in a practical way
right from the start of the project, a key
performance indicator for a successful project is
fulfilled. Not only does focus shift from solution
to result, the reliability with which a project the
intended Business Value delivers, is increased
significantly. Put differently: small effort, huge
impact!
Interested?
To come to a well-founded proposal the most
important functions and qualities of the
solution will be quantified and its contribution
to the Business Value proposition will be made
explicit through relations (Interprete). The table
below reflects the information you will have
gathered after performing step 2 through 4.
Do you see ICT projects start without visible and
manageable Business Value? Synergio supports
you to strengthen the collaboration between
demand and supply and enables development
teams to be much more productive. United we
stand to achieve more Business Value in ICT
projects!
For additional information please send an email
to [email protected] or call us at +31-852735185.