Time to Value
A relatively new term is making its way around the software industry called Time-to-Value. So what does it mean, how does it relate to other financial measurements and what benefit is it to you?
We are familiar with many of the existing measurements: Total Cost of Ownership (TCO) that takes into account cost of software licenses, required hardware, infrastructure, training, maintenance and any other operating costs that take the long view of a project; Total Cost of Implementation (TCI) where you add up costs that focus on building the system; and, Return on Investment (ROI) that provides an estimate of when the outlay of funds start to pay off. There are others that many companies use to slice costs in different ways to obtain a better understanding of how funds are being spent. They are mostly cost based.
Time-to-Value takes a different approach with Time, not cost, being the measurement. The focus of this measure is when or how long will it be prior to seeing the Value in whatever you are purchased? Value is generally associated with when end users can realize the benefit of the software being installed.
Looking at it in different ways, you gain immediate value when buying something to eat at a fast food restaurant. You have a longer Time to Value when buying a new car as it could take a couple of days to a couple of months to receive Value depending on how much research you put into the purchase. Longer Time to Value occurs in major building projects where it could take years before Value is realized.
So how can this apply to software needed to address complex and changing business needs of a utility? SAP has been promoting for about two years is Rapid Deployment Solutions or RDS that uses Time to Value from the start. Where it would normally take 12 to 14 months or longer to implement either a sales, supply chain, financial or operations solution, it now takes about 12 weeks. SAP has brought that Time to Value down considerably in an effort so customers realize that Value in a much shorter time. How do they do that?
Rapid Deployment Solutions pre-configure software from the start, thereby eliminating the need for a long and involved blueprinting process. Scope is already set to include Best Practices from previous implementations, all you have to do is review, make minor changes and implementation begins. This allows you to make purchasing decisions based on business functions, and, since most are implemented in 12 weeks or less, Value is realized sometimes within one quarter. With over 75 current RDS’ available today, and more on the way, covering many of the back office functions, you can now leverage integration across multiple business offices much more rapidly.
In the utilities market, SAP has released several RDS’. From analytics of grid infrastructure to optimizing retail promotions to implementing advanced metering infrastructure to support smart meters, with more to come. These utility-specific RDS’ allow customers ready access to mountains of data generated from smart meters mandated by regulations and marketplaces. When combined with optimizing sales, HR, supply chain, operations and financial RDS’ a utility can have a fully functional and integrated platform of services in a short amount of time that address the needs of today’s markets. You can see all of the RDS’ currently available at sap.com/rds.