In the sourcing world, people throw the word “value” around a lot. Everyone wants to see the value. “Show me the value, Jerry!” Mediocre sourcing professionals are content once they can see the value. That is, once they have a report that defines the value in “black and white” so they can cover their rears if something goes wrong. Great sourcing professionals don’t just want to see the potential value; they want to know how that value will be delivered. In the first chapter of their book IT Strategy in Action authors James McKeen and Heather Smith go into detail about the concept of IT value and how to secure its realization. I’d like to share their “Five Principles for Delivering Value.”

1. “Have a Clearly Defined Portfolio Value Management Process”

The Portfolio Value Management Process is a system of measures that will help to judge the value of a project relative to other projects or potential projects. It’s also a type of diagnostic that can be used to determine the feasibility of realizing proposed value. This process will help to view the way the potential value of a project may change as budgets are spent and timelines are either met or extended. The Value Management Process also acts as a tool for managers to use to gauge their faith in the project and to protect an investment that may have originally been undertaken without perfect or ideal information.

2. “Aim for Chunks of Value”

The basic premise of this principal is “Go big or go home.” McKeen and Smith argue that companies should focus on a few key areas and design complimentary sets of projects. Managers should focus on the biggest, juiciest, lowest hanging pieces of fruit first, and put most minor initiatives on the back burner.

3. “Adopt a Holistic Orientation to Technology Value”

In this section the authors speak specifically to IT, but the lesson can be applied to any potential value-generating function of a business. Whether it’s IT, or Invoicing, or Quote Requisition, or any other facet of any business, this lesson will almost always hold true. Never view the project at hand as if it is in a vacuum. Every project is related to any number of other projects along the course of a given process. Taking this holistic approach up front will save a lot of headaches when it comes time for the actual implementation.

4. “Aim for Joint Ownership of technology Initiatives”

Again, this section speaks directly to IT but can be applied to any project with an implementation phase. Managers need to get stakeholder and executive buy-in before beginning any sort of project that may require change. The more members of an organization that take ownership of a project, the higher the chances that project will be successfully implemented.

5. “Experiment More Often”

While I whole-heartedly agree with the first four principles, I have a little trouble digesting this last one. The authors argue that, particularly in IT, executives need to be more explorative and open to investing heavily. To their credit, Mckeen and Smith do mention pilot programs as a way to “experiment” without being exposed to a substantial amount of risk. Many of our clients also find that pilot programs (for our services and suggested suppliers) are a great way to see what real value can be delivered.

In the end, the only value that will ever be realized is value that can be delivered. Don’t just look for potential value. Ask the question, “How is it going to be delivered?” While a project is being implemented, ask yourself “Does it seem like I’m going to get the same value I was promised?” Get everyone on board, aim for the low hanging fruit, and always view the project at hand as a part of a bigger process. It may seem like common sense, but I felt that it was worth sharing the read.
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