BPR Engagement: Value Planning
November 27, 2013 Leave a comment
Spend most of yesterday reading through process documentation for process modeling engagement. This morning will likely be the same. Came up with some ideas to partition processes differently to better visualize the value they create thanks to reading Rummler’s “rediscovering value“. It reminded me to go back to the dual roots of value creation for any business: Value for business stakeholder and value for customers/clients. I’m going to have to purchase an updated version of Rummler and Brache’s “White Space“. While not the most engaging read I’ve ever had, I still find it to be one of the most influential in my thinking about value creation.
When I was working on value concepts for Microsoft one of the problems I continued to see by the approach was an inability for the tools and methods being developed to find linkage with the business’s rational for existence other than to maximize shareholder value. This has led to most business case methodologies being nothing more than cost saving / cost accounting methodologies. Despite using Cranfield’s expansion on benefit’s realization (BDN) it becomes all too easy to focus on cost savings as a means for justification. Which is typically what happens in the press on time to deliver. Which such approaches this creates an artificial limit on the potential value a corporation can achieve from its investments. That is to say it compares with the difference between a certificate of deposit in the bank and investing in a start-up business. One has lower (project) risk and a guaranteed lower return while the other is more speculative with the possibility of higher returns. One can see why most managers chose the CD-like options, they are neither incented or compensated to take risks. However the project risk which they focus on is only one risk they are exposed to. If they had to account for opportunity costs and other market factors such as the cost of doing nothing (e.g., competitive advantage erosion) in their accountabilities perhaps decisions made might be different. However, corporate practices have eliminated most managers from such exposure**.
**something I’ve started to add into the Modern IT Portfolio Management Process under work in Structure in Threes