Assessment of Business Value
In the context of business analysis, business value encompasses various forms such as time, money, goods, or intangibles that are returned in exchange for something. The core idea is to quantify or qualify what the organization gains or aims to gain through a particular action, project, or investment.
Role
Business analysis activities include reviewing both fully and partially implemented solutions to scrutinize if they are delivering the expected business value. The analysis focuses on identifying any significant variances between the expected and the actual values.
Needs Assessment
When a significant variance is detected, Needs Assessment activities are initiated. This process is geared to analyze the situation thoroughly to identify underlying problems or unearth opportunities. The Assessment of Business Value thus acts as a diagnostic tool.
Divergence in Business Value
- Negative Divergence: When the actual value falls short of the expected value, it signifies a problem. The severity of this problem is gauged through further business analysis.
- Positive Divergence: Conversely, when the business value exceeds expectations, the situation is analyzed as an opportunity. This opportunity can be leveraged by the organization to amplify the positive results.
Solution Assessment
The Assessment of Business Value isn’t a one-off activity but needs to be carried out continually. This is because organizational expectations regarding the value of a solution can evolve over time.
Decision-Making Utility
The assessment serves as a critical input for various organizational decisions, including whether to:
- Develop a new product
- Enhance an existing product
- Retire a product
- Discontinue a product
Prioritization
The actions or recommendations arising out of the assessment need to be prioritized. This prioritization aligns with ongoing planning activities at the portfolio or program management levels within the organization.
Continual Assessment
The process of assessing business value is not static but needs to be ongoing, factoring in the dynamics of organizational goals and market conditions.
In summary, the Assessment of Business Value is not just a metric but a multidimensional tool that aids in problem identification, opportunity recognition, decision-making, and strategic planning within an organization.