Value Proposition is defined as an analysis and quantified review of the benefits, costs and value that an organization can deliver to customers and other constituent groups within and outside the organization. The value proposition unfortunately so far is measured by a simple P&L formula where value=benefit/cost.
The creation of value is a strategic endeavor.
Unfortunately there are too many players with their own value drivers that influence the overall value proposition game, mostly in their favor.
Most BI projects are measured with the traditional manufacturing and technology value benefits based on the experience of knowledge workers created by the principles laid down from Taylor (industry); Ford (assembly line) and Deming (JIT manufacturing).
With the advent of the new Information era, currently dominated by the likes of Google, Yahoo and the new MS Bing some of the traditional processes simply burst at the seams. Add to this the traditional manufacturing/ construction project management techniques still practiced in project management and we have spaghetti of legacy processes with which we are trying to drive modern value parameters.
Most of these principles were based on the traditional sales techniques of an society that was dominated with a single, or few knowledge workers defining assumed values. Parts of the impact of these processes are evident in the aftermath left by the financial crisis of October 2008 or 10/08 and the various industries that were dominated by traditional knowledge workers.
In marketing we measure customer value as the total benefits that a vendor promises that a customer will receive in return for a customer’s payment.
In BI the result of this traditional knowledge based decision has been reported by Gartner, AMR, Forrester and even Business Week clearly identifying that Business Intelligence is not meeting business expectations. Taking a deeper dive on we find total spend on BI in 2008 at $8.8 billion.
By September 8, 2010 Gartner still reports that Quote “After decades of investments in IT, many organizations still feel that its ability to generate true business insight that can elevate that organization's capability to compete in its chosen market(s) is not as effective as it could and should be. Business intelligence, analytics, pattern recognition, and "smart" solutions are the new vocabulary of IT's value; new IT-related initiatives that don't fit within this framework will be increasingly less attractive to enterprises that are not interested in more "IT for IT's sake," but are laser-focused on "IT for the business' sake."
In other words 'Without Business in Business Intelligence, BI is Dead' (Gartner 2010)
The modern information era will now get dominated by the marketing concepts and ‘Business Value Attainment’ processes that changes the ownership of BI processes from knowledge workers to Business Value Workers.
The focus of this new breed of Business Value Workers is elimination of knowledge for the sake of knowledge, or IT for the sake of IT, but the true measure of BVA, or meeting business expectations.
Business Value Attainment is the new mantra for BI success
It should not come as a surprise to read that 92% of BI projects are declared successful in week 1 of go-live and only 55% of them remain so by week 10.
One of the key reasons for this is a fundamentally defective manner in which we manage BI projects, based on the CFO technique of construction project audits. Look around in any projct room and we only see charts measuring cost, tasks and time. So it should not come as a surprise that at time of go-live we meet all these requirements 92% of the times and declare the project a success.
However, 8-10 weeks down the line we hit the wall of ‘Business Expectations’ and bang the successful IT project suddenly has to face the reality of not meeting expected business value. In 45% of the case it fails.
Some assume that this may be higher but then that is playing into conspiracy theories. Looking back we find very few projects that actually measure and report on ‘business expectations’ from the start of the project with the same intensity as they do cost, time and scope. Infact if we look at all the project management training from PMP or PMI to programs from MS projects, to other IT project management application and business expectations simply does not exist. Try this one out - go look for ‘Business Expectations’ or anything resembling that aspect of a BI project and dont be surprised when you dont find it there..
That ladies and gentlemen is the reason we do not achieve business expectations is because we never planned, measured, audited or reported it throughout the BI project lifecycle. Nice surprise....
So the question is ‘How does one alter the BI processes to safeguards enterprise BI investments’ - Install the BVA pronciples and processes into your BI Project processes.
Conclusion
Value is a many faceted subjective mirror where each partner sees only the reflection of their own value drivers that overshadows all else.
Business Value on the other hand is an objective methodology of measuring Informatics ‘defects’ in an empirical manner that eliminates the traditional value based smoke and mirrors.
Action Item: One measure that can be implemented next Monday by any executive is ‘Give me a list of total reports, analytics and informatics available in each BI/DW environment and then let users select ones that they can use today without any further changes’ that is BVA.
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