Capture Value with a Value Management Plan
“A goal without a plan is just a wish” ~ Antoine de Saint-Exupéry
Have you ever been part of a project that put great effort into putting together a business case but did not create a plan to measure and capture the value? I bet most of us can answer "yes". Putting a plan together allows all stakeholders to have a clear understanding of how value will be achieved. It should be reviewed on a regular basis with stakeholders to understand changes, mitigate risks, and measure results.
Value Management Plan Components:
Original Business Case and Assumptions
KPI, Metrics, and Data sources to measure
Timeline to capture benefits
Business Owner/Sponsor responsible for the benefit
Steps to achieve the benefit and process changes
Risk/Issues to achieving the plan
Original Business Case and Assumptions:
Review the original assumptions that went into the business case. Are the assumptions still valid? Many times, the original business case can be somewhat broad. When putting a plan together, it is important to put more specifics into the business case. For instance, if revenue or sales goals are used, it may be time to narrow that down by the specific increases across divisions. Also, review any assumptions that went into the numbers to ensure they are still valid.
Having buy-in and input from all major stakeholders involved in procuring the value is also important. The best way to have transparency is to do this from the start.
KPI, Metrics, and Data Sources to measure
The next step is to define how the measures will take place and assign ownership for the measurement. Optimally, the organization has predefined metrics and KPIs and a single source of that data used throughout the organization. When that is not the case, it is important to define the metrics and the level that the metrics will be measured. Next, agree on the source of the data.
Timeline to capture benefits
To measure the progress of the benefits, it is important to define the timeline for which they will be measured. In my experience, I find quarters to be a good time frame. It aligns with a company's fiscal calendar and any special accounting done on a quarterly basis.
This is another area where transparency is important. It is unrealistic to expect most benefits to appear on day one. There is often a learning curve of new processes and kinks to work out. You likely may see a dip in the first quarter and then a general ramp-up. It is important to consider and document all the assumptions to create transparency for the stakeholders reviewing the value management case.
Business Owner/Sponsor responsible for the benefit
To capture benefits, it is important to establish who is responsible for seeing the benefit to fruition. Many times, this will be someone in the business. One benefit may need to be broken into categories to get to the daily ownership .... defining division responsibility would be an example.
Steps to achieve the benefit and Process Changes
Laying out the steps to achieve benefits often involves process changes. Have the high-level steps to achieve been mapped out? If so, is the next step to ensure all the process changes have been documented and agreed upon? Do all parties understand their ownership in the process? Do they understand where to go if they have issues with the process? This is a great place to engage your organization's process, training, and change management folks.
Risk/Issues to achieving the plan
Lastly, identify all risks and issues associated with achieving benefits. Some examples could be a delay in the project, a change in law or regulations, or a change in demand. Laying those cards out and working on mitigation strategies is needed.
Value management plans are an important part of allowing your company a better chance of achieving the business case. It is a living document that should be reviewed on a regular basis. This allows the organization to adapt and make changes where necessary.
