BUSINESS VALUE-ALL YOU NEED TO KNOW
Business value is the estimated health and well-being of a business by measuring concrete and abstract elements such as monetary assets and utility and employee, customer, supplier, and societal value
These measurements vary between organizations and departments, but they can provide a better idea of a company’s worth
Business values can be
1) The principles you stand for personally
a) Integrity
b) Perseverance
c) Determination
d) Innovation
e) Respect
f) Passion
g) Fair-mindness
2) The beliefs and attitudes you and your staff have in common in the workplace
a) how people should behave
b) the way managers should act
c) how work should be done
d) how staff should treat other at work
3) Your organization’s standards of behavior
a) what is acceptable business practice
b) customers view point
c) deal with your business
Developing business values
1) Map your personal principles, beliefs and values under categories
Sample business categories
a) business growth
b) business associates
c) work
d) customer service
e) decision making
f) teamwork
g) leadership
h) business improvement
i) Staff
j) market identity
k) financial material
l) social community
m) environmental sustainability
Your employees are most likely to embrace your business values
2) Reflect on the meaning of each value
When listing your values, try to clarify each one and the meaning behind it
3) Translate your values into a set of guiding principles and standards of behavior
a) Value – respect
b) Principle – I am open in my dealings with people and expect others to be open with me
c) Behavior – I will try to resolve all problems directly with someone, rather than involving colleagues
Key components of business value
1) usability – it measures efficiency of websites, networks, software and devices and overall quality of consumers experience
2) functionality – it refers to the ability of a product to perform the work it’s intended to do
3) reliability – it is one that routinely performs it’s specified duties without interruption or errors
4) performance – usually measured by accuracy, speed and performance
5) security – protection of company and user resources like data, computers, networks and other sensitive information from unauthorized access, attacks or damages
6) agility – ability to respond to outside incentives such as pressure to change or adapt and the ability to create and respond to new opportunities
Measurement of business value
It is measured in terms of
1) customer satisfaction
2) revenue growth
3) profitability
4) market share
5) wallet share
6) cross-sale ratio
7) marketing campaign response rates
8) relationship duration
Wallet share
It is the amount can existing customer spends regularly on a particular brand rather than buying from competing brands
Cross-sale ratio
It is the practice of marketing additional products to existing customers, often practiced in the financial services industry
Steps to deliver business value
1) understand the vision
2) be clear about the business value of the project
3) evangelize the vision and business value to the project team
4) foster, a team environment to effectively deliver value
5) measure the realization of the business value
Tips for creating business value
1) improve the buying process
2) focus on brand perception
3) get customer feedback
4) make a unique product
5) provide a positive experience
6) prioritize quality over price
7) identify your strengths
8) adjust your marketing strategy
9) educate customers
10) identify your target audience
11) run enticing campaigns
12) reward loyalty
13) provide valuable content
14) get involved
Factors that can equate to business value
1) reducing costs
2) minimizing risk
3) ensuring customer/stakeholder satisfaction
4) providing innovation
5) shorten delivery time
6) decreasing complexity
7) increasing quality
Compiled by:-
Avinash Kulkarni
Chartered Engineer, Govt Regd Valuer, IBBI Regd Valuer