BECAUSE

WE’RE WORTH

IT

Showing the value you bring to your organisation.

ARE YOU WORTH

WHAT YOUR

COMPANY PAYS

YOU?

HOW WOULD YOU

PROVE IT?

You may have to…

IT spend is at its lowest in 20 years (HBR)

BUDGET

OWNERS

ARE

HAUNTED BY

EARLIER

FAILURES

Enterprise social

network

Service Oriented

Architecture

Augmented reality

Gamification

WHY

SHOULD

THEY GIVE

YOU THEIR

CASH?

“Repeating the same mistake is the definition of insanity.”

“Don’t throw good money after bad.”

BUDGET

OWNERS

WILL TELL

YOU:

1. Show the value that my project

will bring?

2. Get funding for innovative work?

3. Improve decision-making during

the project?

FACED WITH

SCEPTICISM

AND

REDUCED

SPENDING,

HOW DO I:

DIGITAL CAN BE CONFUSING

Is digital a:

• Marketing channel?

• Technology function?

• Revenue stream?

DON’T YOU

DESIGN THE

WEBSITE?

DO WE EVEN

UNDERSTAND

EACH OTHER?

Engagement

Big Data

JSON

ROI

Capex

SEO

DOES ANYONE

AGREE ON WHAT

AGILE MEANS?

COMMON

PRIORITIES

REQUIRE A

COMMON

LANGUAGE

What’s broken?

When do we need it?

How do we fix it?

WHY?

BEFORE

ASKING

WHAT, HOW

OR WHEN,

ASK:

IT MAY

SEEM

OBVIOUS…

The system is rubbish!

The technology is 10 years old.

Our competitors

use that software.

• What are the limitations?

• Who do these affect? How?

• What could we do that we can’t do already?

• Is it really the software that enables this, or the people?

• What’s stopping us living with old technology?

DIG A LITTLE

DEEPER…

YOU CAN’T

ANSWER

WHY ON

YOUR OWN

YOU’LL NEED

THREE TYPES OF

STAKEHOLDER.

BUDGET HOLDER

WHO’LL PAY THE

MONEY AND

EXPECT TO SEE

A RETURN.

AKA THE

PROJECT

SPONSOR.

SERVICE PROVIDER

WHO’LL NEED TO

SUPPORT YOUR

INITIATIVE.

AKA THE SENIOR

SUPPLIER.

TARGET GROUP

WHO’LL NEED TO

ADOPT YOUR

NEW SYSTEM.

AKA THE SENIOR

USER.

COUNT YOUR PIGS NOT YOUR CHICKENS.

YOU’LL NEED

STAKEHOLDERS

WHO ARE FULLY

COMMITTED.

You’re involved, but I’m fully committed.

Let’s open a shop called

Bacon & Eggs!

But you need to point them in the right direction.

PRIMARY

STAKEHOLDERS

WILL TELL YOU

WHAT REALLY

MATTERS.

FUNDAMENTALS

WHAT DOES

YOUR

ORGANISATION

DO?

PROFIT!

SHOW ME THE MONEY

TOP LINE

REVENUE

• Sell more of your products.

• Increase your range of services.

• Challenge in new markets.

• Make your product more accessible.

SHOW ME THE MONEY

THE BOTTOM

LINE

• Reduce costs.

• Speed up time to market.

• Mitigate risk.

Seek out operational productivity rather than operational efficiency.

Measurable benefits directly attributable to

your work.

e.g. reduced software licence costs.

Measurable benefits your work supports.

e.g. increased sales to existing

customers post introduction of CRM.

Non-measurable benefits your work

supports.

e.g. reduced staff “churn” post new HR system.

Non-measurable benefits your work

creates.

e.g. consistent product information in single catalogue.

EVERY ANALYST NEEDS A 2X2 GRID

<100% SYSTEM-

ATTRIBUTABLE

100% SYSTEM-

ATTRIBUTABLE

ME

AS

UR

AB

LE

FIN

AN

CIA

L V

ALU

E

NO

N-M

EA

SU

RA

BL

E

FIN

AN

CIA

L V

ALU

E

WHEN YOU CAN’T MEASURE BENEFITS

KEY

PERFORMANCE

INDICATORS

SHOW IF YOU’RE

ON TRACK.

• Adoption rates (number & frequency of users).

• Surveys (satisfaction).

• Compare with baselines (improvement vs. problems with original system).

• Use interim deliverables (requirements met).

DON’T CONFUSE MEASUREMENT

WITH BENEFITS

Zach Weiner: www.smbc-comics.com /index.php?db=comics&id=3465

DON’T CONFUSE MEASUREMENT

WITH BENEFITS

DON’T CONFUSE MEASUREMENT

WITH BENEFITS

GO-LIVE ISN’T YOUR

FINAL MILESTONE

BENEFITS ARE

REALISED AFTER

YOUR PROJECT HAS

BEEN DELIVERED.

BENEFITS NEED TO BE REALISED

TIME IS NOT

MONEY

If a manager of 10 people tells you a new system will save 10% of their time, ask which one will be fired.

Digital isn’t about efficiency, it’s about productivity.

What will each person do with half a day extra a week?

PAYBACK

HIGHER UPFRONT

COSTS WILL TAKE

LONGER TO BE PAID

BACK.

WHY SOFTWARE AS A SERVICE

OFFERS BETTER VALUE

e.g. NEW

SOFTWARE

BRINGS YOU

€10K A MONTH

EXTRA

REVENUE.

If a supplier charges you €60k for upfront software licences, it will take 6 months to break even.

If a supplier charges you €5k a month, you’ll make money in your first month.

WHAT’S MY TOTAL INVESTMENT?

Year 1 Year 2 Year 3 Total

Capital costs: €75,000 €75,000

Operating costs: €25,000 €25,000 €15,000 €65,000

Total costs: €100,000 €25,000 €15,000 €140,000

Continuing costs: internal staff, consultancy,

maintenance, training

Total investment

Upfront costs: e.g. licences, hardware

WHAT’S MY TOTAL RETURN?

Year 1 Year 2 Year 3 Total

Increased revenue €0 €50,000 €75,000 €125,000

Decreased costs €0 €60,000 €60,000 €120,000

Reduced cost of risk €0 €15,000 €15,000 €30,000

Total benefits: €0 €125,000 €150,000 €275,000

Total return

WHEN’S MY PAYBACK?

Year 1 Year 2 Year 3 Total

Total costs: -€100,000 -€25,000 -€15,000 -€140,000

Total benefits: €0 €125,000 €150,000 €275,000

Annual total: -€100,000 €100,000 €135,000 €135,000

Running total: -€100,000 €0 €135,000 €135,000

Breakeven (payback) after 2 years Net Present Value

RETURN ON INVESTMENT

(TOTAL BENEFIT) – (TOTAL COST)

ROI =

TOTAL COST

e.g.

€275,000 - €140,000

= 96% ROI

€140,000

RETURN ON INVESTMENT

• ALWAYS

MEASURABLE

• ALWAYS

FINANCIAL

• ALWAYS

ACHIEVABLE

Anything else simply isn’t ROI.

ESTABLISHED ROI SUITS

ESTABLISHED BUSINESS MODELS

• KNOWN

PROCESSES

• KNOWN DATA

• KNOWN

CUSTOMERS

BUT WHAT IF YOU’RE TRYING

SOMETHING NEW?

NO STAKEHOLDERS +

NO MEASURABLE

BENEFITS = NO

BUSINESS CASE

WE NEED TO ENTER STARTUP MODE

LEAN STARTUP

ERIC RIES Established business models are incompatible with the startup approach.

… but we’re not looking for established business models.

DISRUPTIVE INNOVATION

CLAYTON

CHRISTENSEN

Business need to create “disruptive behaviour” or be overtaken by their competitors.

… established business models won’t work forever.

BUSINESS IS BECOMING LESS STABLE

By 2016, 70% of successful digital business models will rely on deliberately unstable processes. (Gartner)

INNOVATE TO SURVIVE

If start-ups can innovate and you can’t, what will happen your organisation?

What will happen to you?

VALUE PROPOSITION

WHAT

PROBLEM CAN

WE SOLVE?

WHO WILL

NEED OUR

SOLUTION?

HYPOTHESIS

+ DATA =

INSIGHT

AN UNINFORMED IDEA IS FANTASY

DATA WITHOUT IDEAS IS MEANINGLESS

VALIDATED LEARNING

BUILD

MEASURE LEARN

Release

Review

Revise

WE KNOW HOW TO DO THIS

DIGITAL IS

BASED ON

ITERATION

• Scrum tests development iterations.

• User experience design tests variations.

• Lean startup tests business models.

INNOVATION ISN’T A TEAM

GOOD IDEAS

AREN’T CUT

OFF FROM THE

REST OF THE

WORLD

WE WANT TO

MAKE THE

SMALLEST

POSSIBLE

INVESTMENT

TO TEST

VIABILITY

BUSINESS MODEL CANVASS

STEVE BLANK

BUSINESS

MODEL

GENERATION

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

What value do we deliver to customers?

Which of their problems are we solving?

What products & services are we offering?

Which customer needs are we satisfying?

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

For whom are we creating value?

Who are our most important customers?

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

What kind of relationship do we have

with our customers?

Which are established and which do

we need to create?

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Through which channels will we

reach our customers?

How is that different from what

we're doing already?

Which are most cost-efficient?

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Who are our key partners and suppliers?

What are we using them for?

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Which activities does our value

proposition require?

How do we create the right distribution

channels, customer relationships and

revenue streams?

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Which resources will our value

proposition require?

Which resources are needed to

support our activities?

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

Which are the most significant

costs to this business model?

Which resources and activities are

most expensive?

KEY PARTNERS KEY ACTIVITIES VALUE

PROPOSITIONS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

KEY

RESOURCES

CHANNELS

COST STRUCTURE REVENUE STREAMS

What are our customers willing to pay?

How would they prefer to pay?

How do these differ from what they do already?

IMPLEMENTING LEAN START-UP

• Try out the Lean Launchpad: steveblank.com

• Read Eric Ries: how to grow your idea and how to pivot when it’s

not working.

• Invest the absolute minimum in your idea to see how well it will

work.

KEY DIFFERENCES BETWEEN

TRADITIONAL & STARTUP

TRADITIONAL

• There’s a problem to solve.

• If we don’t do this work,

we’re creating a problem.

• We’ve some data to work

with.

STARTUP

• Let’s find a problem to solve.

• If we do this work, we’re

creating an opportunity.

• We need to gather some data.

KEY SIMILARITIES BETWEEN

TRADITIONAL & STARTUP

• Ideas can’t be gathered in isolation; you need stakeholders.

• Focus on the customer.

• Seek out revenue-led and productivity benefits.

• Benefits need to be financial.

• Decisions are based on data.

HOW ELSE

CAN WE USE

THIS DATA?

WE KNOW

WHERE THE

VALUE IS

EMPHASISE CALLS TO ACTION

Low value

Low value High value

High value

Where do we save the most money by doing this online

rather than face-to-face?

UNDERLINE THE IMPORTANCE OF

USER EXPERIENCE

• Benefits can only be

maximised by maximum

adoption.

• Early adoption leads to better

ROI.

• User experience testing

directly improves ROI.

DEVELOP YOUR BRAND’S ROI

• Setting and meeting

customer expectations.

• Reducing cost of sale to

existing customers.

• Improving market

penetration of new products

under same brand.

PAY AS YOU USE, NOT UPFRONT

• Software as a Service (SaaS).

• Browser-based applications

over client installs.

• Only future-proof where you

know what the future holds.

RELEASE LITTLE AND OFTEN

• Frequent releases provide

earlier ROI.

• You can measure impact

earlier.

• You can change your mind if

things aren’t working.

DIGITAL IS CORE TO THE BUSINESS

Is digital a:

• Marketing channel?

• Technology function?

• Revenue stream?

IT’S NOT ABOUT

WEBSITES

DIGITAL IS AN ENABLER FOR CHANGE

NO ONE ELSE

CAN DO THIS

• Keep pace with emergent

competitors.

• Determine viability of new

models quicker than ever

before.

• Reach an exponentially larger

market than through any

other channel.

WE ALL WANT TO BE

PART OF THE NEXT

BIG THING.

Internet of Things

Sharing economy

Wearable technology

Virtual personal

assistants 3D bio-printing

BUT LOSING MONEY

ISN’T CUTTING EDGE.

LET’S SHOW WE CAN MAKE

ROBUST DECISIONS.

CAN YOU PROVE YOUR WORTH?

1. BUILD CONFIDENCE BY DEMONSTRATING

MEASURABLE, FINANCIAL AND ACHIEVABLE

BENEFITS.

2. PROPOSE IDEAS, USE DATA TO TEST THEIR

VALUE.

3. USE VALUE-BASED METRICS TO IMPROVE

DECISIONS.

DIGITAL IS WHY

WE’RE SUCCESSFUL.

I AM DIGITAL.