Ultimately, value is why we do things, and when value is not realized as expected, businesses are damaged and at a personal level people are highly frustrated. ERP implementations, notorious for their failure to deliver value, are among the best-known examples of how hundreds of millions can be spent on projects that, while certainly different, rarely deliver the business impact promised in the business case.
So, what’s the problem? Over-selling? Lack of program discipline? While many factors can contribute, the lack of value to the business doesn’t result – despite what many would have you believe – from an inevitable inability to track granular details and complex cause/effect linkages. It’s not death by a thousand cuts, in other words. In most cases, the reason value isn’t realized is frustratingly obvious. And that reason is – most large programs are simply not geared to be managed on value.
Here’s what typically happens: The process starts with a business case, with two sides and lots of folks involved whose job is to detail and justify each and every component of cost, effort, time-line and reward. The problem is that, amidst all this effort, the “reward” or value part is only loosely defined with little if any linkage to program manageable activity – and that part is what needs the most rigorous oversight. Almost all PMOs will carefully manage a project to be on-time and on-budget. And while requirements change or issues arise, the timeline and costs are managed relatively well. Notwithstanding this focus on schedule and budget, most projects fall short on the value management component.
Managing to value is not hard. Start with a value map – literally, a piece of paper – and write down the business goals. Break those goals down to value contributor on one side and the activities needed to achieve those goals on the other. Using this simple document, you can align activity to value levers with the appropriate accountability. This can happen as early as when the business case starts to be developed. So, when a firm and/or an individual states, “This is what can be achieved,” it becomes easy to ask “how?” and for those hows to be documented and then aligned to project plans and activity.
By starting the process early, programs can avoid the fate of “going live,” only to have all involved learn that the business impact anticipated by the system has not been achieved. A value map, along with a project plan, addresses this problem by using various milestones to keep stakeholders aware and accountable to the value as it is created and released to the business. Because missed milestones are easy to see, when they don’t happen you can avoid the unpleasant surprises at the end of the project.
Value realization management is a critical and a rarely identified need in a program’s structure. Value mapping offers a powerful – and better yet, simple and easy – mechanism to manage programs. Here are five steps to get started.
Step 1. Involve the primary stakeholders in the business case development in a way that holds them accountable to determine business objectives
Step 2. Ensure the business case is based on stakeholder commitment to potential savings drivers and socialized objectives
Step 3. Have each stakeholder sign their thread through the project linking business case goal to value lever and mechanism that will drive savings/improvement.
Step 4. Develop a value map as a part of the contracting process and execute as an exhibit to the contract
Step 5. Align and link the value map with the project plan before the project starts and socialize the value map at the project kick-off
Step 6. Use the value map with the project plan to manage the project
By following these guidelines, the likelihood of your stakeholders thanking you early, often and throughout the project is much greater.