Value. It’s quickly becoming the latest corporate buzzword and it merits discussion because it is important and I fear value’s value is being lost in the noise. If we simply dismiss the concept as another tactic that my sales peers use to drive an opportunity to closure then we miss the point of what it means to an organization in the first place. I think that a few definitions and a couple tips will help ensure that value becomes a critical component in decision making.
Let’s start with some basic definitions that we can use to anchor the conversation. As a noun, value is “the importance, worth, or usefulness of something”. If I am going to invest in a product or service then I can measure the worth or usefulness of that something. But in order to measure anything, I need to understand the right metrics that should be leveraged. I typically speak in terms of KPIs because they are mutually agreed upon methods for measuring both current state, and trends over time. They are usually agnostic in that they are usually the result of observing data and creating a indicator or score. When it comes to IT operations some of the basics are things like the mean time to repair, detect, or between failure . IT also looks at things like number of requests resolved on the first call or number of incidents related to failed changes. If you start to combine different KPIs you can dive in deeper and get additional context about how your organization is performing. For example availability is a measure that uses MTBF and MTTR. If you need additional inspiration for metrics you can use to measure your organization against check out http://kpilibrary.com for an impressive library.
Now that we have established the tools to measure performance, we can then step back up in the conversation and determine how to measure value in a more personalized way that is meaningful to the business. If MTBF is a critical measure in your organization and you are investing operational and capital budget to affect that number, it becomes much easier to factor in the value you require from an investment and how to measure that value over it’s lifecycle. First having a measure, then having a calculation of spend allows you to determine the impact of that investment. Or back to our definition, the usefulness of that investment.
But value can be a verb as well as a noun. In that definition value is when you “consider something to be important or beneficial”. This value definition can wane over time if not reconsidered on a regular basis. Lots of factors can affect how much an investment is valued including your leadership, your processes, your organizations goals, and external factors such as the economy. Being proactive and scheduling regular dialog with key stakeholders can prevent a value crisis from emerging as a result of changes to any of these key contributors.
So how can you derive the value so that you value your investment in verb context? Work with your sales team in a collaborative and well established cadence outside of the normal acquisition time cycle. If we’re being good stewards to our clients we are willing to have these conversations and in fact should be working to schedule them proactively. The business should also leverage independent and internal analysis to understand how you measure success and value and then apply that measurement to your investments. Share that process with your vendors so that you are speaking in a common language. Lastly, understand the internal issues you are attempting to solve before you even begin your analysis of value. Knowing the problems you are solving and how they affect an organization is key to calculating the value.
Remeber that value is not arbitrary and it is personal and must be defined through your own lens. Ensure all the players involved in calculating and understanding value know what the world looks like from your viewpoint.