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The Value in Value Management

The Value in Value Management

Optimal performance in business depends in part on the ability to identify, track, and manage value creation over time. Companies embark on a host of projects, software implementations, mergers and acquisitions, virtualization and mobile initiatives, and more in an effort to improve performance, reduce costs, and create value. But the well-known adage “You can’t manage what you can’t measure” is especially apt for value management. If you don’t identify, track, and ensure the ongoing value of a project, you’re unlikely to meet its financial and operational objectives.

Value management is an end-to-end process that includes discovery, realization, and optimization. There are important questions to answer at each stage as you follow programs from problem identification through justification and implementation to ongoing measurement and improvement. Comprehensive value management programs combine such processes in a cohesive, systematic methodology designed to identify, track, and manage value throughout the lifecycle of a project. It can be used with software implementations, performance improvement programs, major transformations, and departmental initiatives.

Realization, Analysis, Measurement

A key step in the value management lifecycle is value realization, where it is critical that all stakeholders have a clear understanding of the business case, team roles, and expectations. During this step, you highlight the key value drivers and the changes needed to deliver value. You also establish metrics – financial or operational – along with data sources, ownership, baselines, and targets essential for accountability and long-term success.

A well-conceived project identifies KPIs and performance drivers up front, as part of the business case. Then you identify initiatives based on strategy; prioritize them according to impact; then manage the resulting initiatives, tasks, milestones, and subtasks.

Using Strategy Management to Track Value

One of the best ways to manage value is through a tool designed for the purpose. SAP Strategy Management supports scorecards and initiatives management to track and measure performance improvement efforts over time. You can also perform deeper analysis to identify the causes of problems, collaborate on issues, and take corrective action if target values are in jeopardy.

Tools like SAP Strategy Management allow you to document objectives, define performance improvement activities, assign teams and owners to these tasks, monitor performance against defined KPIs, and report and present the results to all stakeholders. There is a direct link between KPIs, activities and objectives. Alerts flag any KPIs trending red or not moving; so you can take proactive action or drill deeper into the scorecard to understand which group, department, or supplier is the cause. Users can comment on performance; comments are shared with other stakeholders who can then respond so that a collaborative dialog is captured and associated with the KPI.

What’s Next

Strategy management helps you track and realize the value of your organizational objectives. Business Analytics Services from SAP can help you optimally implement SAP Strategy Management and other supporting analytical tools – creating a comprehensive framework that helps ensure long-term project value.

For more information on how Business Analytics Services from SAP can help unlock the long-term value of your projects, visit us online.

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      Author's profile photo Shashikant Sangalad
      Shashikant Sangalad

      Thanks, very well explained