The quantification of benefits is where most valufiers become gun shy. They are afraid of putting themselves or their organizations on the line by projecting benefits based on their calculations. If there is an industry-standard way of calculating benefits, there is generally no hesitation. So how does one quantify benefits? Let’s walk through two examples....
A key component of the value model is the list of benefits attached to the intended project or initiative. In general, the benefit statements are very easy to articulate but the “value” of the value model lies in how we plan to measure and track these benefits. In a typical model, every benefit statement needs...
Business value is generally defined as the net benefit of a course of action of an enterprise. In this context, an action usually manifests itself as a program, project or an initiative. Obviously, since the potential value of a “possible course of action” cannot yet be realized, we will have to simulate it to help...
When one is explaining value modeling to a CFO, you want to focus on the main things: the value proposition of the organization, how you calculated the metrics, what metrics did you use, etc. So how do you keep the value propositions into easily understood dimensions that are generally applicable to companies across industries. I...
Harvesting value in IoT is not all that easy. The traditional business models have usually not been equipped to make or monetize the tremendous amounts of data that comes from a device or a sensor. So when a business wants to get into IoT, it needs to make sure that it has some core capabilities...
In addition to the six basic patterns described in an earlier post, three advanced patterns that are more specialized patterns of the basic ones are described in this post. Multi-Customer Interaction: In this pattern, multiple users interact with a single thing and business. In this situation, it is important to keep the interaction stateless between the interactions....
When the industry talks about IoT, it does seem like there is only a singular pattern that is applicable across all industries and consumer segments. The reality is that there are multiple IoT patterns that need to be considered when devising solutions or creating value. In fact, this may be one of the main problems...
Despite all the hoopla about IoT, monetization has not been easy. Companies are still discovering how to make money off of this latest phenomenon. Currently, monetization models exist (as described in the previous post) and new ones are being developed. However, quite a few challenges need to be overcome before enterprises view this as a...
While monetization models are evolving with increased sophistication, today most of them can be grouped into primarily six categories: Device Operations: One of the older monetization models for IoT is in device operability. The earliest implementations of IoT were basic in that it mostly provided for remote operation and maintenance of devices. When the industry...
Gordon Hui (HBR, 2014) discusses the shift of the value mindset due to IoT. He makes a distinction between Value Creation and Value Capture. He refers to value creation as those activities that increase the value of a company’s offering and encourage customer’s willingness to pay. Value capture, according to him, is simply the monetization...