Value is subjective!!

Just got this nugget of wisdom from economists Tom Walker, Sr and Jr of Praexis Labs.

Sounds simple, yet, explains perfectly why when I presented a clear business case for an obvious win for a stakeholder, they picked the exact opposite. Let me explain.

Let me demonstrate on a generic simplistic example.

Given:

• Option A, with a cost of $1 and an ROI of $12 over 10 days;

versus,

• Option B, with a cost of $1 and an ROI of $5 over 5 days

Translated to the same measurement system over the same period, Option A's ROI is $6 and Option B's is $5. Would seem obvious to me that the stakeholder would pick Option A over B given they would stand to benefit.

Fact: My stakeholder picked Option B. Now, why would they do that?

Did not consider the definition of VALUE to my customer. The obvious, which is COST, might not be what my customer considered of VALUE. As objective as COST appeared to be, it was not to this stakeholder.

Initially, it did not occur to me that the stakeholder may have cared more about image or perception management, which could not have anything to do with costing the problem at hand, or improvement metrics.

This stakeholder's concept of VALUE was actually subjective. Interesting!!

Business Value! Business Contribution!

There is an emergence of the mindset of providing value to business. I guess we want to address the age-old problem of IT being viewed as overhead.

I have always said that we should treat out IT projects as if we were a small business. In that world, everything we procure for the business needs to provide a tangible bottom-line value....or, we don't acquire it. If we did this to our IT projects, despite kicking and screaming customers, we would stop being just an expense in organizations.

I say this principle is the essence of Six Sigma.

Now, having said that, I am running into ITIL V3 -- pretty much an evolution of ITIL into the same business value mindset. Basically, it is the same principles from ITIL V2 except, instead of focusing on process, it starts with Strategy, which is really defining value to the business.