Why Does Waste and Value Loss Occur?
For your company to get the business results and investment value it desires from all of your projects, you must first identify the full value for the project, specify how it can be achieved and then plan its realization.
While this may sound obvious, too few projects actually do this. Routinely most organizations, even when they have formally defined their targeted benefits in a business case, deliver less than half of the total available business benefits.
This is primarily because they don’t focus on their benefits’ identification or realization. Instead they ‘hope’ that the benefits will be delivered or enabled by the project. However, the project itself is rarely focused on enabling, supporting or delivering the business benefits—hence the ‘value gap’—the ‘gap’ between what the project delivers and what the business needs to fully realize the business value. This ‘gap’ is rarely visible, acknowledged or managed.
The lack of a formal and comprehensive ‘value equation’ for a project investment commonly results in many, if not most, of the available benefits being missed, lost or destroyed.
The TOP® Value Equation™ solves the problem of project waste—it maximizes the available value, specifies the measurable business outcomes and benefits that deliver the value and then identifies the change activities required to realize the value.