I’m sure we all had experienced a situation where we believe that we have delivered an initiative, program, or project successfully. Probably we are also claiming that we had created additional value for the business. However, our organization or customer did not perceive any real value.

Where did the disconnect occur? These situations usually happen because we had a measurement problem, not a lack of value.

How to make sure we are delivering value to our organization or customers? Everything starts by not being afraid of measuring the value. Value measuring is the necessary tool to understand how we are doing versus expectations of our stakeholder interests.

Why measurement is important?

Measuring the provided value is essential because, without it, organizations limit their ability to evaluate the effects of the expected changes. That is why the establishment and use of performance measures are fundamental requirements for redesigning processes and projects.

Measuring the provided value is essential because, without it, organizations limit their ability to evaluate the effects of the expected changes.

Based on my experience, we can measure almost anything by considering the following three value enablers to reach an organization's objectives.

• Faster by accelerating the business and IT/OT outcomes. This may impact in a faster time-to-market for initiatives with associated downstream benefits and reduced the work associated with project or procedure execution.
• Better. Improving or de-risking the IT/OT environment by creating effective IT/business technology roadmaps and leveraging best practices, organizations can reduce both project execution and operational risk from their IT environments.
•  Cheaper by reducing the labor expense associated with project implementation or improving KPIs such as timeline or quality.

What is Value?

A common mistake is to forget that value can be different things to different people and organizations. That is why I always try to validate the definition of "value" of my stakeholders (and leadership team). Here is my favorite definition:

Value is something that the recipients recognize as a fair return since they believe it is useful and essential.

Value can be represented by financial and non-financials metrics (i.e., staff retention, quality of service, or order fulfillment time). Financial metrics are measures used to assess the economic impact of a solution or investment. Here is a good set of metrics that we could use to discussing the monetary value.

• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Payback Period
• Return on Investment (ROI)
• Hurdle Rate
• Anything else an organization uses internally to evaluate projects

Obviusly, large organizations want to express improvement in their investments in technology. My recommendation is to have an open mind when searching for units that could represent value for initiative, program, or project. Here are a few ideas for you to consider:

Developing the Benefits for a Business Case 

I don't see a transformational project without a value-case aligned with the stakeholder desired benefits.  

Benefits should be identified based on stakeholder interviews. Users typically define benefits in terms of improvements in cycle time, quality, productivity (cost per unit output), and satisfaction (both employee and customer). These measures need to be monetized to determine their financial impact in a business case.

A business case should be conservative and includes high-level ROI estimates. In my own experience, providing excessively detailed business case (in either costs or benefits) tends to obscure and confuse identifying which assumptions are most important.

From my point of view, these four steps are needed to develop the benefits of our business case.

1. Identify stakeholders with your project or program sponsor, including users in both IT and business units. Diverse geographic coverage is highly recommended, and 10-20 interviews are the best practice. 
2. Develop a list of benefits questions based on the existing benchmark, customer stories, and our research of our stakeholder's major pain points for activities in a business process.
3. Survey stakeholders and summarize the responses to convert them to financial measures.
4. Agree on process improvement goals for the business case. My advice is asking your project sponsor to identify stretch but achievable goals for improving the capital expenditure request process. The final goals should be agreed to by the stakeholders. An example of the improvement goal calculation could be "Reduce the time it takes finding information by at least 30%. The results in a savings of $1.5M are based on a current total annual cost of $5M ($1.5 = $5M x 30%)"

TIP: As part of the process, besides the desired outcome, entry to capture the current state. As a reminder, you will need it to calculate the ROI, and you may not have other opportunities to meet again with the subject matter experts.

Defining Value Realization

Our efforts to create value is mainly focused on how to measure a potential quantifiable benefits of our initiative, program or project. However, value realization is our effort to unlock and make real the promised benefits leveraging the approved investments by our stakeholders.

In my perspective, value realization must be at the front page of any transformational or innovation engagement as the way to show the tangible or actuals to the business value of an IT/OT solution.

Unfortunately, too many consulting firms focus on value realization in the early stages of a project or program. To do it right, we should use a repeatable approach for each project/program and even in each major release.

Introducing Microsoft Digital Advisory Services or DAS

To help large organizations to succeed in the Digital Era, our Digital Advisory Services (DAS) are available to reimagine and transform their customer engagements, their employee experiences, even their business models and operations.

Digital Advisors is the role at Microsoft leading the DAS execution; they bring their expertise, as well as Microsoft's resources (such as Area Solution Architects), experience and innovation, to empower our customers to reach their digital aspirations.

To guide each step of our customer's Digital Transformation (DT), our Digital Advisors use a unique DT Program of Change model. The model described in the next diagram is used to partner with a forward-thinking approach to applying our technology to solve business problems by understanding our customer's goals, identifying risks, and creating actionable roadmaps for the journey ahead.

Something I love from Microsoft is that our Digital Advisor Team covers the entire customer success lifecycle. Yes, including make sure value realization happens with every project.

What is Next?

We are focused on helping you accelerate your digital journey, and our worldwide presence helps you evolve your projects from small pilots into global solutions. No matter where you are on your digital transformation journey, Microsoft Services can help. If you’re ready to connect with us to learn more, please contact your Services Executive now (or send me a private message).