by Craig LeGrande, CEO Mainstay
Microsoft’s CEO Satya Nadella has famously said, “Every business will become a software business.” IDC estimates that two-thirds of all firms have deployed IT initiatives in support of digital transformation. As a result, businesses are reinventing themselves to be digital-first and cloud-first and in the process are reimagining their products, services, and internal business processes. This is a great time to rethink how value management is integrated into your critical business processes.
Value Management / Value Engineering Defined
What is value management (or value engineering for some)? The concept has been around for a while and has meant many things to many people. But most would agree that it’s about how you do three things:
- Measure the business impact of the technology investment.
- Credibly explain how those results are delivered.
- Institutionalize #1 and #2 across the enterprise.
When value management is practiced well, technology sellers invariably see better lead generation, more success with large deals, and improved customer retention. Technology buyers, including CIOs, also benefit from integrating value management, helping them showcase the value of their IT investments and align better with the business.
However, value management teams face tough challenges. These include the limited availability of accurate information – such as usage and costs – forcing teams to rely on industry averages and guesswork instead of actual operational data. As a result, many of their mathematical models fail to reflect the real world in all of its complexity and detail. As a result, the content created from such models is less credible and often not compelling enough. Opportunities to showcase the real value are missed.
What’s New with Value Management?
What’s different about the last few years? Enterprises are now investing heavily in data analytics to turn customer, product, transaction, and usage data into insights. In a blog, Gainsight CEO Nick Mehta reinforced the importance of gaining real-time visibility into customer usage data and adopting outcomes-based metrics and processes companywide. It’s clear that these insights have wider application across the enterprise. Such data is valuable not just for customer service and retention, but for many other critical business activities such as product development, pricing, marketing, cross-selling and upselling, sales acceleration, and much more. Yousuf Khan, former CIO of Pure Storage and now a customer success and start-up advisor, explains in his blog how data analytics is the cornerstone of customer experience – that is, the entire process around buying, using, and deriving value from a product or service.
Leveraging Data to Unlock the Full Potential of Value Management
Value management has been given the gift of data. With the advent of customer success, we now have all kinds of data pouring in on customers, products, transactions and of course, product usage. That means we no longer need to resort to approximations or benchmarks. This points to a promising new era for value management, whether you are a technology buyer or a technology seller.
Whether you are a technology provider selling a B2B technology solution or a CIO investing in technologies to digitally transform your business, it’s time to harness the power of value management across your enterprise.
The truth is, the full potential of digital transformation will not be realized without value management at its core.
Are you ready to unlock the full potential of value management? Here are a few questions you should ask yourself:
- What is the scope of value management in your enterprise?
- Do you have the right people, processes, and tools to practice value management at scale?
- Have you reserved a seat at the table for your value management team at strategic discussions and meetings?
- Do you have the C-level commitment to this cause? Who is your value management advocate or champion in the company? (hint: CEO)
- Are you building a culture of value management across the company?
Is your organization ready to unlock the full potential of value management? To learn more about Mainstay’s value management consulting services, check out our website and our industry-leading Value Advisor tool.