Business Value Framework – Changing Focus from Requirements to Value
The Big Themes in Digital Transformation
The Atos Consulting Team met (virtually) in the fall of 2020 to talk about how the world was changing as a result of the pandemic and its implications for our customers. One of our sessions focused on the big themes of technology-led change over the past decade and what might change in the future.
Our conclusion was that the basics had not changed. Our customers were still laser-focused on their customers and the balance between efficiency and experience. The importance of extracting insight from increasingly diverse data sources had not gone away either. In fact, the pandemic had turbo charged both customer focus and the need for data. With both customers and staff working from home, our clients needed to quickly adapt in order to keep pace with a volatile business environment. Since then, the pace of change has barely slackened.
Talking to clients who were, like us, trying to figure out what the new world was going to be like, we detected a number of patterns. One was that existing transformation programmes, or those that had recently concluded, were not delivering in the new world. Another was that transformation resources were in such short supply that they were hampering delivery of key business objectives. Finally, the rapid changes demanded by the pandemic demonstrated that transformation programmes were often too slow to deliver and even when they were on time and on budget
The implications of “Business as Usual”
Slow Time to Value
Many of our customers are complex organisations. Functions have differing priorities and resolving these into a set of requirements and factoring in all the dependencies is a difficult task. Once this is done in a waterfall change programme, delivery can take many months, if not years. By then the business need may well have changed and what is delivered is yesterday’s requirements – or requirements are changed mid-flight and the black hole of change control appears.
Underwhelming Business Impact
In addition to the challenges of requirements evolving while the enterprise changes, there is the risk that what is delivered does not meet the expectations of the business. This is often because the desired results are not sufficiently thought through. For instance, in a direct-to-consumer new business process the intended result might be a better conversion rate, but customers must proceed through several steps before they pay. If they drop out of the process at the fulfilment stage, it may indicate that the actions needed from the end customer are not presented with enough explanation or there are too many steps.
Re-engineering a process to reduce manual steps and increase speed without addressing customer experience may deliver a technology solution on-time and on-budget with requirements fully delivered; which still does not fix the issue of low conversion rates that impact business value.
Change delivered late, or which does not have the impact needed to meet business expectations, frequently results in repeated tilts at the same problems. The history of technology-led change is littered with failed or abandoned projects. Not only does this create unnecessary cost, the abandoned projects make it harder to persuade CxOs to have another go. Change champions in both IT and business functions have a harder time getting funding due to the perceived risk. As the pace of change is accelerating this reticence is understandable but also damaging in a competitive and volatile market.
The Change in Focus Needed
We have found that there is great value in examining processes in detail and understanding the journeys of customers, employees and other users through them. The requirements for change are embedded in the blockers and impediments to the delivery of value – that is agreed upon by the business, sometimes for the first time. This also allows us to identify opportunities to eliminate non-value add steps in a process or automate.
Understanding where value is generated across a process, rather than focusing on the business KPIs, means bottlenecks and points of failure can be identified and handled. Adopting a value-outcome approach enables change programmes to answer three questions:
What should we work on next and why is it most important? – If an enterprise understands the value added at each stage of a process, then the points where improvement is needed, and the consequences of change are easier to understand. Prioritization becomes more data driven and less dependent on negotiation and guesswork.
How effectively and efficiently are we converting ideas into action? – The same data that is used to understand value and prioritize activity is used to judge whether the change is efficient or effective during a short Agile Change sprint. We will talk more about how an Agile approach helps the Business Value Framework in a future blog. This evaluation enables change programs to measure delivery by external business metrics rather than internal project management measures.
Did the changes deliver the anticipated results? – Even with a data-driven understanding of value, a change programme will not always deliver what is needed at the first time of asking. Because Agile sprints are short, change can be evaluated and adjusted.
The same measures of business value are used to prioritize change, during the delivery sprint as measures of success and after delivery to measure results over time.
The elements of the Business Value Framework
The new approach to technology-led transformation we created in lockdown has now been sold and is being delivered to several of our customers. It has a few key elements which we will be discussing in future blogs but in outline they are:
Discovery – This is where we explore the demands of business functions, customers, employees, 3rd party suppliers, shareholders and stakeholders. This is about discovering WHAT needs to be done and the components are:
- Business drivers – Understanding the key business metrics and drivers – the things that keep business functions awake at night. Answering the question of what are the most important outcomes, objectives and customer and user experiences?
- Value stream mapping – Finding out where value is created in a process journey and how the process does (or does not) drive business outcomes. This analytics-derived insight will also guide delivery.
- Focus prioritization – Joint working sessions between IT and business to decide focus areas as a result of the insights gained
Design – Here we define the scope, organization, customer experience model, architecture, and platform considerations needed to deliver the intended business impact. In addition to technical artifacts, workshops also structure the development roadmap.
Lean Agile Delivery – The creation of cross-functional product development teams responsible for executing against development designs using CX, Analytics and Lean Agile led approaches. Teams can be structured as a joint-development teams or as a standalone development pod. They incrementally deliver valuable process change, working software and analytic models in short sprints then iteratively improve from PoC to MVP to Pilot and production.
Transformation Capability – In order to ensure the ability to deliver value-based change becomes permanent we use two accelerators:
- Tasktop™ to measure and visualize performance data derived from business processes to ensure informed decisions are made about where and how to deploy development teams to maximize value.
- Agility Health Radar to understand current product delivery maturity and plan to fill the gaps in individual and organizational capability.
In the second blog of this series, we will look at the Discovery Phase of the Business Value Framework and how a combination of Data Science, Domain Subject Matter Expertise and our resources in Customer Experience Design (both people and our CX Labs) allows us to identify where our clients can get the most bang for their buck.
We will then, in the third blog, talk about how Lean Agile Delivery solves the problem of slow time to value and finally we will discuss how Tasktop and Agility Health Radar helps make the capability to deliver value-based transformation permanent.