Business value indicates all forms of value that determine the health and well-being of the firm in the long run. The term encompasses creation of value for all stakeholders: shareholders, employees, customers, suppliers, partners and society.
Businesses need to constantly add value to stay in business and grow. By focusing on value, they can differentiate from their peers and move ahead in the crowded marketplace. The business world is replete with examples of how businesses that have clear values and strive towards value realization succeed in the long run. Unilever is a good example. The company founder William Hesketh Lever gave prominence to value right from the beginning by offering products with health benefits at a time when disease and malnutrition more widespread in Britain. He even took care of the schooling and healthcare needs of the laborers in the company’s Congo plantations and paid them good wages. The tradition of adding business value continues even today as the company focuses on its environmental and social impact. Another company in a different space, a leading phone company, is a glaring example of companies that failed to add business value and lost its exalted position in the market. Its belated attempts at course correction may well be a case of too little too late.
To succeed, businesses clearly need to determine their value dimensions and apply various enablers to realize those values. Today, technology has a significant role to play in this regard and relevant IT programs play a considerable role in actually delivering the intended value. However, businesses that have large IT programs have a common problem: The focus is mostly on the management of the project rather than the outcome. Even in cases where business value is considered, an organization’s CXOs perceive different values and each measures success of the IT program by considering only those value dimensions relevant to them. For Business Value Assurance (BVA), i.e. for ensuring that maximum business value is derived, businesses need to look at value dimensions in their totality, determine what the IT and business enablers are, establish the relationships between them and accordingly invest in enabling technologies.
Towards this end, they need a BVA framework that transcends delivery of project management in the conventional sense and ensures that organizations realize the potential value of investments. Such a framework helps identify value dimensions and their enablers, establish a process for planning and tracking benefits, set a timeline and facilitate course correction. It also ensures that the CXOs are on the same page on the value dimension front.
In these uncertain times, it is imperative for organizations to transition from a passive, rudimentary form of value management to an active BVA process that enables enhanced business performance. With a suitable BVA framework, businesses across the spectrum can focus better on business outcomes. Do you think BVA can help achieve success in large IT programs? Do write in.