top of page

What Does ‘Business Value’ Mean in Plain English?

The VP of the business asks IT: “When is the new site going to be live with the advanced search function we discussed?”

IT answers: “That function is on the backlog as we discussed but there’s so much that has to get done before it is operational but don’t worry, we’ll have the site in stages starting in a few weeks. The bells and whistles will come at the end of the project … probably three or four months from now based on the current backlog we originally defined with you and your team.”

VP: “But 50 percent of my department’s revenue comes from people buying our market forecast reports that are buried on the site! If they can’t find the reports, revenue is going to take a big hit.”

IT: “Ok, so that search function isn’t just a bell or whistle for sales then, is it? Ok, we’ll make sure it get’s developed before the non-revenue generating features of the site.”

This discussion led to a facilitated meeting where the business leaders and the project team worked through each item on their backlog and assigned values in an effort to prioritize the backlog not just by perceived order of importance but also by the expected economic and business impact generated by each feature and/or function.

There are proven best practices and tools in teach both customers and service providers how to incorporate these steps and build value-driven business cases for what they are attempting to spend their budgets on but too often these steps are neglected.

There are some governing principles when discussing business value:

  • The proposed technical document (a scope of work, estimation, requirements definition or product backlog) should be translated into an itemized list of business driven features and functions

  • That list should be worked on by the customer and the service provider team to prioritize it first on perceived value and then by numerical (economic) value as it relates to financially impacting the business

  • There must be a mutual understanding and baseline established upfront as to what point in the project the software is usable to go live. It is typically at this point where things can get sticky and where the experience of someone who has operated in these trenches can be invaluable.

There is more to this than these simplistic steps but keeping the conversation simple is necessary before delving into a larger more complex discussion, which this can become. The bottom line is that the discussion of business value needs to be brought into every corner of the outsourcing discussion. Not only is today’s economic climate in support of such a dialogue but it will also help both customers and service providers build a more solid foundation for the objectives they are both trying to achieve.

bottom of page