Here is a stepwise approach to developing a quantifiable value model for your program vision.
- Establish the Vision of the Business Imperative. Why is it being considered? Research the corporate executive vision to see how this project or initiative may meet that goal. Tie it to industry developments where applicable.
- Identify Business Drivers emanating from the executive vision. The corporate vision, as stated publicly, is usually quite lofty and vague. Drill into this vision further to get to business drivers.
- Derive Objectives from the broader business drivers. For instance, a broad drive to become a sustainable organization will require specific objectives in transforming operations, business models, technology systems, etc.
- Identify Key Program Components that correlate directly to the specific objectives. Many of the key components of the program likely will end up as projects inside the program portfolio.
- Identify Benefits for each of the key components. These benefit statements will be used later to develop the quantifiable value proposition.
- Identify Costs for each of the key components. Make sure to include both direct and indirect costs. Each cost line item may consist of multiple key cost metrics.
- Anticipate Risks to the program. Short-term disruption to productivity, market disruption, shareholder dissatisfaction, etc. Assess the probability of occurrence and the potential impact on the overall vision.
- Quantify Benefits by Associating Relevant KPIs. Each of the benefits may be quantified using one or more key-value metrics. Do not make the KPI calculation overly complicated but make it easily relatable.
- Gain an Initial Agreement of the value model with key stakeholders. Calibrate and re-calibrate using the key value and cost metrics as necessary.
- Socialize Value Model to all stakeholders. Ensure projects are adequately instrumented for value measurement and tracking. Use value model to prioritize program portfolio roadmap.
