Over the last 3+ years I have worked with different internal and external organizations, colleagues from different backgrounds and colleagues with different objectives. One thing that they all have in common is that they have been asked at one stage or another what value they have brought to their customer.
This is an inherently difficult questions to answer. Especially without having the preliminary work completed to allow us to connect the dots and provide the evidence. That however, does not take away from it’s validity.
For example, before we utilize a new digital solution we cannot answer definitively what the improvement, innovation or advancement has been. Until we get through Go-live and into operations, we rely on potential benefits, and point of view documents. This could be defined as perceived value, but perceived by who? During discovery, these types of documents are great to get the appetite for innovation but they are generally not too customer specific. They also do not help to measure or govern the value of a project as we move from away from inception. So if we wait until we get to operations and haven’t set the success criteria in connection with what we care about, the business needs, then the discussion of value is not only based on perception, it is based on emotion.
To enable us to track measured ‘value’, we need to leverage a fully integrated End to End Value Management process. From discovery through delivery starting with empathy. Empathy for the user.
With this in mind, how are you thinking about your Digital Transformation? How will you showcase the “value”? Does taking the leap into new cloud environments, IoT applied data or machine learning mean that you get the value defined in technology terms? Or will you be able to describe how you are moving the needle on Business Objectives.
Every day we see the evidence of dramatic shifts happening throughout the world. Most notably in the form of disruption. While we are talking about Digital Transformation, we can talk of digital disruption. Examples of Digital Disruption. If you are not a cause of disruption, then it’s safe to say you will be effected by it. Just think about Netflix and Blockbuster.
Digital Transformation is the goal for so many, but the drive for this transformation is coming from customers. If you are an enterprise or B2B, then I mean the customers of your customers. They want a better experience, intuitive UI, integrated systems, and mobile freedom. This also means that the drivers for our solutions are not the technology teams, but the business and owners of the business processes. They are responsible for the customer satisfaction and will be working with their technology teams to realize the potential of this shift. This is where empathy is very important. They are also the ones who are responsible to reinvent their business model. That is if they are able to understand their current model and forecast the future one.
You may have also seen numerous articles, white papers, websites, twitter accounts all discussing the “commoditization of IT”, and how the new drivers are the business. Beware the outsource, or now the insource. The result of this is we now need to ensure that our technological advantages and future solutions have a direct connection to Business Value. While all being mapped to the technology. We want to do things right, do the right things and have an increase in speed and agility but be able to explain the ‘why’.
The Role of Business Value in Selling Digital Technology:
- “Software offers no ROI by itself. The value of technology is how you use it to change and improve your organization’s business processes.”
- The power of business value analysis lies in the ability to quantify the business benefits of a technology in terms that CFOs and other executives can readily understand.
- Emerging from the field of marketing in the late 1990s, the theory of perceived value denotes that the value of a product or service is co-created by both the buyer and seller of the product (Vargo & Lusch, 2004).
Value of innovation:
So where is the value of innovation? If you ask business leaders to define value, you are going to get a dizzying variety of answers. Why is it so hard to define the term? Value means different things to different people. The definition depends on what they see as value in their organization. Finding value is equally elusive. Applying value to innovation can be difficult for many organizations.
Understanding the value is like any other process. An organization needs vision and a clear understanding of their values and mission. It begins with an idea or a vision of where an organization would like to be and what the path looks like to get there. In the beginning, the true value of innovation will only be perceived. That perception though is a powerful force that moves the innovative idea forward. Never underestimate the value of perception with innovation. It creates possibilities and fires imaginations. Perception creates visions of excellence and success. As momentum builds moving the idea forward, measurable results begin to develop. Organizations then can begin to compare performance data, benchmarking against established best practices. Now, real value can start to be applied. As innovations grow and age, measurable value can be assessed and applied. Organizations will suddenly find that the innovation is resulting in continuous quality improvement.
In my previous series of blogs, I discussed the 6 steps of Design Thinking and how they can help you to answer questions and find solutions. Design Thinking is a human-centric approach for solving problems by creating new ideas. In the sense of Digital Transformation, target solutions are expected to help you to re-define your business model. Design Thinking is one approach I suggest for understanding and discovering the foundations upon which you will start your transformation.
As you focus on technology innovations to help navigate an increasingly complex business environment, stay focused on delivering value and business outcomes aligned with your organization’s strategy. That’s the lesson I have learned as we’ve worked with thousands of companies to ensure that projects are delivered on-time, on-budget – and on-value.
I invite you to the next blogs in the series, Where’s the Value? In this series, I will be breaking down the 5 main phases in a value management project to help you identify and track measurable value. But more importantly, help you understand and define what value means to you and your stakeholders. Be sure to review the 6 steps of design thinking to provide you and your team a new method to ask the right questions. Hopefully this will provide you with some new tools to take the first steps of your digital transformation and be a digital disruption-and-change agent for your organization.