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Identifying tangible value in an intangible world

Thomas Ballard · October 1, 2021 ·

This week I was turned on to an article from 2005 titled ‘Identifying the Business Value of What We Do’.

An extract from this article that will resonate from working with your portco tech teams:

‘Half of all users who attempt to register can’t successfully complete the process. Those who do register find the process very frustrating. Fixing the registration process to eliminate any frustration would be important, right? Not necessarily.

How does an improved registration process help the business? How does increasing the number of registrations helps the bottom line, either immediately or in the long term? If we can’t answer these questions, why should our organisation invest any resources to fix it?’

Spool, J. (2005) Identifying the Business Value of What We Do’. This article analyses the technology decision-making process, asking. Available at: https://articles.uie.com/business_value/ (Accessed: 29 September 2021).

Do you find yourself sitting down with your portco tech teams, asking those questions?

What sort of answers do you get? Do you feel satisfied with the exchange? Do you find yourself wanting to know less about the how and a lot more about the value?

A way of helping facilitate these conversations is by asking:

Why do we want to make that change?
What it will cost.
What would happen if we removed the thing we wanted to change.
What is the value of making that change?

But this isn’t the complete answer..yet.

Spool puts forward these five value areas to assess making a change or not:

  1. Will it increase revenue?
  2. Will it decrease expenses?
  3. Will it bring in new customers?
  4. Will it bring in more money from existing customers?
  5. Will it increase shareholder/taxpayer value/EV/EBITDA?

The answer to both the facilitation questions and the value assessment areas are key to putting a $ value on change. 

What if you knew your planned digital transformation could increase the revenue per user without increasing the cost per user? Or your cloud migration would reduce product churn by 5%. Or that your new SaaS products more would positively impact EBITDA. 
 

Those are valuable insights you’d probably want to know, there is no excuse for not being able to put a tangible $ value on change. 
 

Until next time.

Thomas


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