Build a Value Measurement Framework

• Rapid changes in today’s market require rapid, value-based decisions, and organizations that lack a shared definition of value fail to maintain their competitive advantage.
• Different parts of an organization have different value drivers that must be given balanced consideration.
• Focusing solely on revenue ignores the full extent of value creation in your organization and does not necessarily result in the right outcomes.

Our Advice

Critical Insight

• Business is the authority on business value. While IT can identify some sources of value, business stakeholders must participate in the creation of a definition that is meaningful to the whole organization.
• It’s about more than profit. Organizations must have a definition that encompasses all of the sources of value or they risk making short-term decisions with long-term negative impacts.
• Technology creates business value. Treating IT as a cost center makes for short-sighted decisions in a world where every business process is enabled by technology.

Impact and Result

• Standardize your definition of business value. Work with your business partners to define the different sources of business value that are created through technology-enabled products and services.
• Weigh your value drivers. Ensure that business and IT understand the relative weight and priority of the different sources of business value you have identified.
• Use a balanced scorecard to understand value. Use the different value drivers to understand and prioritize different products, applications, projects, initiatives, and enhancements.