What is a Value Focus in Projects?
A value focus is the ultimate measure of success in projects. It encompasses the outcomes and benefits experienced by customers or end users.
When evaluating project success, the focus is on the value derived from the deliverables. This value can take different forms, including financial contributions to the sponsoring or receiving organization.
Additionally, value can be measured by the public good achieved, such as social benefits, or by the perceived benefits of the project’s results from the customer’s perspective. If the project is part of a larger program, its contribution to program outcomes also represents value.
The Business Case
Many projects are initiated based on a business case, which serves as a justification for undertaking the project. The business case is rooted in identifying a need to deliver or modify a process, product, or service.
It can be expressed through various documents, such as contracts, statements of work, or other project-related materials. Regardless of the specific form, the project’s intention is to provide a desired outcome that effectively addresses the identified need and offers a valued solution.
Within a business case, several supporting and interrelated elements are essential. First, there is the business need, which serves as the rationale behind the project. It explains why the project is being undertaken and originates from preliminary business requirements reflected in the project charter or other authorizing documents.
The business need provides details about the goals and objectives of the organization or client. By clearly stating the business need, the project team gains a comprehensive understanding of the business drivers for the future state. It also allows them to identify opportunities or problems that could enhance the potential value derived from the project’s outcome.
Sorin Dumitrascu
In this book you will learn how to create a winning business case that can get you the resources you need to execute your new project idea.
Justifying the Value Focus
Project justification is closely connected to the business need. It elaborates on why the identified need is worth investing in and why it should be addressed at the present time. Project justification is typically accompanied by a cost-benefit analysis and underlying assumptions that support the decision-making process.
Aligning the Value Focus with the Business Strategy
The business strategy forms the foundation for the project and all the identified needs are aligned with this strategy. It outlines the overarching plan to achieve the desired value and guides the project’s direction and objectives.
Informed decisions arise when the components of business need, project justification, and business strategy intertwine with the consideration of benefits.
PMBOK 2021
These decisions aim to meet or exceed the intended business value.
Monitor Throughout the Project Lifecycle
Throughout the project’s lifecycle, it is crucial to clearly describe the desired outcomes, which should be assessed and updated iteratively. As projects progress, they may undergo changes, and the project team needs to adapt accordingly.
Continuous evaluation of project progress and direction against the desired outputs, baselines, and the business case ensures that the project remains aligned with the identified need and will deliver its intended outcomes.
Alternatively, if the project team and stakeholders identify an opportunity or problem that can enhance or minimize value, the business case is updated accordingly.
In cases where the project or stakeholders are no longer aligned with the business need or if the project’s potential to deliver the intended value is in doubt, the organization may choose to terminate the project.
Roland Wanner
This book covers the basic concepts of EARNED VALUE MANAGEMENT in an easy understandable way with more than 39 illustrations – and aligned with the PMBOK® Guide.
How to Determine Value
Value, as a concept, is inherently subjective. Its worth, importance, or usefulness can vary depending on different individuals or organizations. This subjectivity arises because the perceived benefits of a project depend on organizational strategies, which can range from short-term financial gains to long-term goals and even nonfinancial elements.
Since projects involve various stakeholders, it is essential to consider and balance the different values generated for each stakeholder group while prioritizing the customer’s perspective.
In certain project contexts, value engineering techniques can be employed to maximize value for the customer, the performing organization, or other stakeholders. For example, this can involve delivering the required functionality and quality while managing risk exposure, optimizing resource utilization, and minimizing waste. In adaptive projects without fixed, upfront scopes, project teams can optimize value by collaborating with the customer to determine which features are worth investing in and which may not contribute enough value to the final output.
Philippe Husser
This read provides concrete solutions learned in the field by its author during forty years of practice in the management of complex projects.
Value Realization
To ensure value realization, project teams need to shift their focus from solely delivering specific outputs to achieving the intended outcomes. By doing so, they align their efforts with the project’s vision or purpose.
While a deliverable may support the intended project outcome, it may not fully realize the project’s overall vision or purpose. For instance, customers may request a specific software solution because they believe it will address their business need for increased productivity. While the software itself is an output of the project, it alone may not enable the desired productivity outcome. In such cases, adding additional deliverables such as training and coaching on the software’s usage can enhance the productivity outcome.
If the project’s output fails to deliver the expected productivity improvements, stakeholders may perceive the project as a failure. Therefore, it is crucial for project teams and stakeholders to understand both the deliverable and the intended outcome it is meant to achieve.
Measuring Value
The value contribution of project work can be measured over the short or long term. However, since value realization can be intertwined with operational activities, it can be challenging to isolate the project’s specific contribution.
When a project is part of a larger program, evaluating the value at the program level becomes necessary to effectively guide the project. A reliable evaluation of value should consider the overall context and the entire life cycle of the project’s output. While value is typically realized over time, the implementation of efficient and effective processes can facilitate early benefit realization.
By working closely with organizational leaders responsible for utilizing the project deliverables, project leaders can ensure that the deliverables are positioned to realize the planned outcomes. This collaboration enhances the likelihood of successfully achieving the intended value from the project.
Further Reading
|PMBOK Principle 1 – Be a Diligent, Respectful, and Caring Steward|
|PMBOK Principle 2 – Create a Collaborative Project Team Environment|
|PMBOK Principle 3 – EFFECTIVELY ENGAGE WITH STAKEHOLDERS|
