Every organization wants to be successful. But how they measure success can vary widely. In this article by Darius Fekete, Director of Value Acceleration at Vendavo, discover Vendavo’s unique approach to measuring value, the benefit sources of commercial excellence, and a formula to quantify and track the benefits realized.
Every organization strives for success. Along the path for success, numbers often become the compass guiding important decisions and initiatives. As businesses embark on transformative journeys fueled by technology, the concept of “value realization” takes center stage. This principle is especially pertinent when your ambition is to achieve commercial excellence with the help of technology.
How People, Process, and Technology Come Together to Drive Value
At Vendavo, we understand that the true value of our partnership is not solely in the pricing technology we offer, but in the way our people, process, and technology converge to drive business value. People bring the expertise, creativity, and adaptability necessary to navigate complex business landscapes. While, process ensures that these efforts are streamlined, efficient, and aligned with overarching goals. Finally, technology acts as the enabler, providing tools and insights to fuel the progress. When people, process, and technology are harmonious, that’s when we can unlock true value.
In the simplest terms, the Value Acceleration team exists to help our customers understand:
- What the results are and where they came from
- How Vendavo solutions helped drive those results
- How to improve the results
Our commitment is not just to deliver solutions, but to stand by your side as your partner on your journey to success, illuminating the path to value creation.
An Approach to Value Realization
Robust value realization strategies will transform your business, driving tangible and intangible benefits. When you set out on this journey, you need to clearly understand where you’re going and identify how you’ll know when you’ve arrived.
We group business value realization into three core benefit sources for commercial excellence:
- Increasing revenue/sales/margin
- Operational excellence
- Improved stakeholder experience
Each source holds its weight and contributes significantly to the overall value realized.
Increasing revenue/sales/margin is a direct and quantifiable benefit. It’s the clearest indicator of business growth through improved price setting and increased deal quantities. On the other hand, operational excellence is about running a tight ship – making your processes as efficient and effective as possible with increased productivity and more accurate costs. Finally, there’s improved stakeholder experience, a less tangible yet equally vital benefit. Profit margins might not directly reflect the latter. Still, it strengthens the relationship with your customers and builds better employee adoption of your transformation efforts, which is a cornerstone of sustainable success in the long run.
Measuring the Benefit Sources of Commercial Excellence
How do we measure these benefits? We gauge these benefits using a “value-meter” formula considering managerial KPIs:
This formula (Revenue X Scope % X Adoption % X Lift %) helps us quantify and track the benefits realized from various initiatives, and it is relevant for all three value realization benefits, even the less tangible ones. Here’s how our measurement formula is broken down:
- Revenue – The total income generated by selling goods or services related to the company’s primary operations
- Scope % – The portion of the business where you’ve rolled out the software
- Adoption % – How often you use the software within that defined scope
- Lift % – The increase in performance due to the software
When we multiply these elements, we get a measure of the benefits supported by the software.
Remember, the benefits realized are not solely due to new technology or software use. The truth is that the decisions made with the quartet of people, processes, technology, and data drive value. Each element plays a crucial part and should be considered in conjunction. Software perfectly aligned with your company’s strategy, embraced by your team, and supported by well-defined processes can drive substantial growth.
Soon, I will delve deeper into each source of benefits, explore how our business decisions influence those, and explain how to measure their impact effectively. Stay tuned, and together, let’s unlock the true potential of value realization in your business.