Value Management – The key to successful digital transformation

The current economic climate and macroenvironmental factors are forcing companies to operate more efficiently. While on the surface, it may seem like the companies would delay digital initiatives in an effort to curb IT spending, in fact, digital transformations are more important than ever before to drive operational efficiency and deliver customer value. Digital Transformation has been on the agenda of many of CXO’s even before COVID and they expect to increase their organizational performance and build customer centricity by leveraging digital technologies.

In fact, digital transformation must be seen as an opportunity to reorganize processes and strategies and should be led by processes, driven by value and based on data points. The transformation should always start with a well-defined business case with clear business goals and underlying value potential. The projected value and outcomes should be aligned with stakeholders to drive ownership and accountability for the business results.

SAP, through its value management framework, helps companies identify the financial and strategic value through their digital transformation initiatives and provides a holistic approach to support better mobilizing, delivering, and managing the attainment of business value from their transformation programs and continuous improvement initiatives. SAP’s value management framework covers the end-to-end value lifecycle in three phases.

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Phases in SAP Value Management Framework

  1. The objective of the value discovery phase is to develop a value-based business strategy and business case, enabled by technology and aligned with corporate goals & priorities. Key questions addressed during the value discovery phase:-

  • What are your business imperatives and how do you align business and IT strategy?
  • What is the expected impact of addressing these imperatives? What is the business case?
  • What are the right initiatives to address value creation opportunities and how are they prioritized?
  • Am I prepared to adopt the best practices to realize the business case?

2. During the Value Design & Planning phase, SAP teams collaborate with our customers to develop transformational strategies to mobilize, deliver, and measure business results based on insights into leading practices and benchmarks Key questions addressed during the value design & planning phase:-

  • How should the business prioritize, mobilize, and govern programs to achieve value?
  • How can the business case be made actionable at the operating level and how is the value measured?
  • How should the organization govern, architect, and set up an information framework for analytics?

3. Value Realization phase is focused on assessing how the implementation and program compares to best practices and recommended areas where the business can drive even more value from current investments (continuous improvement). Key questions addressed during the value realization phase:-

  • What is the value realized by your SAP program / how can you derive more value?
  • What insights do you have regarding TCO? How does the implementation compare to best practices?
  • How can we utilize benchmarking to continue to measure our progress compared to our peers?
  • How can the business implement a Value Management Organization to optimize success?

The SAP Value Lifecycle Manager – VLM (https://valuemanagement.sap.com) is one of the key accelerators used by SAP for value management service delivery. The tool helps in benchmarking surveys, business case development, TCO etc.

The SAP Value Lifecycle Manager is available for public use and customers/partners can evaluate their processes and key performance indicators (KPIs) and discover the value of the Intelligent Enterprise, powered by best-in-class value content & Insights.

To summarize, value management is not new concept, but with a clear focus on digital technology delivering business value, the need to manage value is greater than ever. For more information on value management, please follow the topics on this page value management | SAP Blogs.