“Value” is one of the most overused and misunderstood terms in business today.
It is often thrown around in meetings and on company websites but while many organizations talk about value, very few get it right.
Why is that? What is the problem with value? For starters, value is a perception. What is valuable to one organization -or one person – may not be as valuable to another. And many organizations don’t define value at an enterprise level. As a result, company initiatives are fractured and less impactful because everyone within the organization is using their own value measuring stick.
The second problem with value is that too many organizations equate value only with cost savings. This is a misconception that can cost organizations a lot of money and time with little to show for it. Fact is that organizations, just like people, are happy to pay for things that they perceive as being valuable – cost is secondary.
If you’re talking about value wrong or worse, not talking about it at all, here are three points that will help you reframe the value conversation.
Value does not equal cost savings.
When thinking about value, it’s easy to just think in terms of dollars and cents. It’s straightforward and unlike value, everyone knows exactly how much dollars and cents are worth.
Now, cost is a factor in value but it should not be the leading factor of value. Because in addition to a price tag, there are intangible costs with any transaction. These intangible costs include things like time to make the purchase, the ease of making a purchase, the time to get set up with a product or service, etc. These intangible costs factor into the value and depending on the end-user, they could mean much more than a specific dollar amount.
When you’re discussing value — whether it’s the value of your product or service, a new technology, or your own IT services, don’t forget the intangibles and factor those into the value.
Outcomes by themselves don’t deliver value.
In an article for SysAid, I explained the difference between outcomes and outputs in reference to ordering a pizza. The outputs are the operational measures, like when you order a pizza and it arrives on time and at the agreed upon price. The outcomes are the results that show the value of that pizza delivery, such as did you get the pizza you ordered, was it hot and fresh, did it taste good and so on.
More IT professionals are beginning to focus on outcomes instead of outputs, which is very important! However, outcomes alone don’t get the job done when it comes to value. Competition is too intense these days and consumers have a lot of options, and high expectations.
So what combines with outcomes to create value? The experience of the transaction.
Part of value is experience.
If you don’t provide or enable a good experience, you’re not offering value. The experience is just as important today. In fact, Salesforce found in a survey that 80% of customers say the experience businesses provide is just as important as its products and services. And Gartner found that 81% of businesses compete primarily on customer experience.
Customer experience is more important than ever and if you want to deliver value through your products and services, you have to offer a seamless and personalized experience for your customers.
The Role of Service Management in Value
By this point, it’s clear that value isn’t just about a price tag. It’s a combination of understanding what’s important to your consumers and consistently delivering those results – along with a great experience. In short, someone finds value when they can say “I got the outcome I needed and expected and I had a good experience while doing it – at the price I was willing to pay.”
The connection between the experience and outcomes lives in your service management foundations. Service management is how you can monitor the experience and ensure you deliver the outcomes that a customer wants so they can recognize the value of your products and services.
Is your service management approach strong enough to deliver value? Have you done these things in the last 12 months?
- Met with your key stakeholders to review and agree on a shared definition of value
- Mapped your value streams with all stakeholders, not just IT
- Audited your workflows to identify and implement improvements
- Implemented continual improvement strategies
Service management is an ongoing initiative but it can — and will — help to deliver value if it’s done properly with buy-in from the entire team.
If you’ve been struggling with showing how IT delivers value to the bottom line and you want to elevate your IT organization, you need to be sure you’re talking about value correctly. Review your service management approach. Examine the customer experience. You may just find the areas where IT can fill any gaps and deliver the value your customer needs.
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