Understanding value from different perspectives helps to deepen understanding of strategic goals of the business, improve performance effectiveness and long term business advantage.
The value of contemporary business is multilateral. Creating new revenue streams and generating business value is a strategic aspect of business success. Value is tricky though because it’s subjective in the eye of the beholder.
Value proposition should be customer-focused; the value chain process is the flow of activities, which include what managers, employees and applications do: Business value is multifaceted to improve stakeholders’ satisfaction and enhance corporate brand name. To build a customer-centric organization, the organizational value propositions should be customer focused and define the ideal business model, distribution, products & services, the brand by segments they want to go after.
Business managers need to check up how balanced and effective the value chain is, and gain customer insight via an in-depth understanding of the business value chain and oversight of key business processes. The value chain process is the flow of activities, which include what managers, employees and applications do to produce goods and services and deliver them to the customer. The whole value chain needs to be aligned, engaged, and contributing by sharing the value so varying stakeholders get their fair share.
Value proposition of new business model design: Business model innovation is part of organizational growth cycle. The management needs to ponder: what value does this investment provide the business,” and how to improve ROI. To perceive the value of the business model and make an objective assessment of an investment, you need to have a very clear idea of the new product/service – its development cycle, the overall “value proposition,” in which it fits into the overall “product portfolio,” the wider competitive landscape and the price/business model.
It’s important to define the ideal business model, the wider competitive landscape and your price/business model. One of the benefits of mapping products/services delivery is making the work being done and its impact on the whole system more visible from different perspectives. The management needs to evaluate whether you have common values and a dynamic enterprise business model that takes into account initial business investments, customers, products, services, economical cycles, market shifts to ensure business effectiveness and profitability.
Putting the effort at the portfolio level to qualify and quantify value in terms of both strategic value and tactical value: Business values should be identified by the organization, qualified by leadership, quantified by management and worked into the architecture of the system. There are economical value, customer value, culture value, reputation value, societal value, etc. Quality attributes help the business identify and prioritize business value that often impacts the soft success factors of the company.
Quantitatively, business value is often measured by optimization of cost and consumption of the organizational assets in support of the business solutions that are identified within the organization’s revenue producing stream. Quantity attributes enable the performance management to keep improving. Discussions with the organizational management will identify what is important to the organization and should focus on. The parameters should be set and counted to calculate business value holistically.
The business value plays a bigger role in determining which task needs to be addressed first by setting the right priority, or creating a business justification case. Forecast is important to identify potential value declines. Understanding value from different perspectives helps to deepen understanding of strategic goals of the business, improve performance effectiveness and long term business advantage.