SPA Conference session: In Search of Business Value | |||
| One-line description: | Is there a meaningful measure of business value to offset against IT costs? | ||
| Session format: | Think tank (75 mins) [read about the different session types] | ||
| Abstract: | Thousands of MBA-trained managers have managed to embed the term “cost-benefit analysis” into the standard business lexicon under which the majority of us operate. When it comes to IT, everyone seems to be expert at measuring the costs down to the last penny but far vaguer about providing measures of value against which to compare it. Many IT initiatives seem to revolve around cost – either reducing the cost of IT or using IT to reduce headcount and hence reduce operating costs. Is the use of IT to reduce costs the only way we can measure its value? Conversely if we are reducing IT costs by, say, offshoring then if we have no clear measure of business value delivered, how do we know if we are still delivering the same level of business value after the change? Even if you come up with a measure of value, how do you assign weighted percentages of this to different parts of your process? For example if you create a Lean value stream map you can say that each step adds value but how much value? Could you take the cost of that step away and cause a smaller reduction in the business value delivered hence improving your cost/benefit equation? This thinktank sets out to explore whether this exercise is ever meaningful or whether it is so full of holes it just gives you distorted figures which are effectively meaningless. The key questions to be answered include: * What are the common types of business value? * How can we quantify or measure these types of business value? * Can all benefits be quantified? * In what context are the different business value measures valid? * Can you map value to its associated cost(s)? * Are there too many assumptions around cost/benefit for them to be useful? * Does anyone actually believe in the cost/benefit analysis? | ||
| Audience background: | Architects, designers, developers, analysts and managers involved in any aspect of software development. | ||
| Benefits of participating: | * Develop a better understanding of measures of business value * Form a potential set of ways to define, assign or measure business value that can be applied back at work | ||
| Materials provided: | * Definition of key concepts, e.g. cost-benefit analysis, value stream * Examples of business value measures * Example scenario for application of business value measures | ||
| Process: | * Introduction to the problem and the key questions. Describe some example measures of business value * In groups of 4, explore whether the example measures of business value are used to measure projects in your organization. List any other business value measures that are used for projects in your organisations, how they are quantified and in what context they might apply. * As a whole, reflect on the business value measures and obtain a better group understanding of what is being measured. * In groups. based on a supplied scenario, how would you apply the business value measures you have discussed. How can they be measured? What costs are there in the scenario? Can you identify any relationships between value and costs (e.g. where decreasing the latter decreases the former)? Pick the most promising candidates and prepare a short presentation based on the scenario. * Present your candidate measures to the other groups illustrating how they relate to the example scenario * Summary and conclusions | ||
| Detailed timetable: | 00:00 – 00:10 Introducing the problem 00:10 – 00:20 Exploring business value measures 00:20 – 00:30 Reflect on business value measures 00:30 – 00:55 Applying business value measures 00:55 – 01:10 Presenting business value measures 01:10 – 01:15 Conclusions | ||
| Outputs: | A set of candidate business value measures with associated quantificationa and applicable contexts written up for the SPA2010 Outputs Wiki. | ||
| History: | None | ||
| Presenters | |||
| 1. Andy Longshaw Barclays Bank |
2. Nick Rozanski BlackRock |
3. Chris Cooper-Bland Endava (UK) Ltd |
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