Value Management Techniques

*Value Governance

- Govern and Assure (Direct)

- Strategise and Plan (Direct)

- Operate and Optimise (Execute)

- Change and Transform (Execute)



The Val IT Framework (IT Governance Institute - ITGI)

COBIT Framweork for the management and delivery of high-quality IT-enabled services



Val IT / COBIT IT Governance Approach

Val IT

- Strategy (Are we doing the right things?)

- Value (Are we getting the benefits?)



COBIT

- Architecture (Are we doing them the right way?)

- Delivery (Are we executing them well?)



Value Governance Maturity

0 - Non-existent

1 - Initial

2 - Repeatable

3 - Defined

4 - Managed

5 - Optimised



*Business Case Best Practices

• Justification for an investment


• Communication on assumptions about costs and benefits


• Method to inform decision making on allocating scarce resources and capital

Business Case Key Issues

• Developing the Business Case


• Reasons for Project


• Options - Scenario Planning


• Benefit expected


• Risk


• Cost - Financial ROI, DCF NPV


• Timescale


• Investment Appraisal - Cost Benefit Analysis


• Evaluation

Templates

Approval Process and Gates

Acceptance Criteria

• Alignment with Strategy


• Rank, Priority and Opportunity Cost


• Feasibility, Causality, Risk Aversion

Delivery of Benefits



Questions to ask about a Business Case

Is this busine?

Is it the best business case if we were to rank them?

Can we measure the changes?

Is there really a cause/effect link between this business case and the value?

What is the business case doesn't go forward - what are the real consequences?



*Continuous Decision Improvement

Use the outcomes of previous decision-making experiences to improve future decisions and apply techniques to optimize those decisions.



Disciplines

• Predictive Analytics & EDM


• Decision Support


• Optimisation


• Knowledge Mangement

The CDI Cycle

• Communicate improved strategy and policy for decision-making


• Apply policty: make decisions


• Monitor and collect data for analysis


• Analyse & Develop: Learn from earlier decisions and outcomes

*Value Engineering

1. Outcome Planning

2. Function Modeling

3. Speculation & invertion

4. Idea Development

5. Idea Portfolio Building

6. Decision Approval

7. Implementation

Functionality Models

Produce New Procedure

Determine Procedural Options

Establish Procedure Scope (Allocate SME Resource)

Identify Required Technical Outcome

Benefits Definition

Identifying benefit types

Determing benefit certainty

Clear Benefit definition makes functional silo behaviour less easy, exposes negative competition, makes it harder for people to simply be self-interested

Two key elements:

• Defining benefits
• Mapping benefits
  

What is the investment rationale (How hard is the Benefit Definition)?

• Renewal (Easy)
• Process IOmprovement (Moderate)
• Experiments (Hard)
• Transformation (Hard)
  

Defining Benefit Types

• Profit
• Revenue
• Growth
• Share
• Costs
• Time
• Productivity
• Risks
• Customer Experience
• Image & Reputation
• People's Morale
  

Benefit Certainty

• Securable
• Committed
• Anticipated
• Noticeable

Write a benefit definition

• Start the sentence with an active verb that identifies the change (two words)
• Add any subject and conditions

More/Less, Increse/Reduced, Deliver/Eliminate, Greater/Fewer, Faster/Slower, Maximise/Minimise

Benefit Definition Checklist

• Beneficiary
• Description
• Dependencies and CSFs (Critical Success Factor)
• Direct/Indirect - SCAN
• Timing
• Type
• Measurement
• Responsibility

*Benefit Mapping

Benefit Management - Critical Success Factors

1. Framing
2. People
3. Analysis
4. Measurement
5. Governance

A benefits map connects:

1. what is done (ie invested in or consumes resources)
2. Tangible changes in the business (that result form those activities)
3. The end benefits it delivers (meaningful to the business as ROI)

Engaging Business Stake Holders

Benefits Mapping: Planning the Investment

Business Objectives

• Improve Cost Structure
• Increase Asset Utilization
• Enhance Customer Value
• Expand Revenue Opportunities
• Reduce Product Proce
• Improve Product Capability
• Reduce Time to Market
• Reduce Product Lead Time
• Improve Product Quality

Business Transformation (Change) Initiatives

• Concurrent Product Introduction Processes
• Increase Re-use of Legacy Product Info
• Increase use of Lessons Learned

IT Enablement Programmes

• Product Lifecycle Management (PLM)
• Knowledge Management System
• PLM for Engineering

Benefits Mapping: Planning Benefit Delivery

• Identify business change activities (Benefits Map)
• Validate for each BU
• Link to Programme Mgt controls (Milestones)
• Monitor as lead indicators of benefit erosion
• Apply corrective action

Benefits Mapping: Implementing Benefit Realization

Benefits Mapping: Delivering Benefit Certainty

Projects->Initiative/Enabler->Value Driver->Objective/Benefit->Strategic Objective

Process Steps

• Executive sponsorship and briefing
• Access to documentation / information on initiatives
• Access to objectives
• Develop logical structure - strategic objectives through to project
• Share a strawman
• Agree focus with Executive Sponsor: business results nore important than purity of mapping
• Ensure building a map that can be developed with quantification
• Stop when your client has achieved what they needed

Benefits Map: Tracking Benefit Realization

• Activities
• Results
• Enabling Outcomes
• Managed Benefits