“Value” Can Be Tricky… UCOB Can Help!

Doctor on phone asking for cheaper alternative as patient can live with pain. Patient looking unhappy.
“Value” from whose perspective?

Value is an important concept in business analysis, and an important part of conducting business analysis is gaining a common understanding of the types of value that our stakeholders are trying to attain with a particular project or initiative.    Indeed, ‘Value’ is a one of the focal points in the Business Analysis Core Competency Model (BACCM™) in the Business Analysis Body of Knowledge Guide (BABOK®), which defines value from the perspective of business analysis as:

 

“The worth, importance or usefulness of something to a stakeholder or in a context”

 

This is clearly only one possible definition of value, but it is worth pausing and reflecting on.  It implies an important distinction that we, as practitioners, instinctively know but rarely talk about.  What is considered ‘valuable’ varies depending on who you ask and the context in which we are operating in.  In fact, what is considered ‘valuable’ may vary over time, and this has an impact on what we do as analysts and how we do it.

 

Defining Value: Trickier Than it Might Appear

It is easy to over-simplify the definition of value.  We might (quite understandably) think that it is for the sponsor to decide what is valuable.  Whilst there is a strong element of truth in this statement, and certainly the sponsor should define the strategically aligned outcomes they are seeking, success often involves balancing the needs of multiple stakeholders and groups—so of whom have no direct power on the project that we are working on.  It is important that we bring this view to the fore so that conscious decisions can be made.

 

Let’s imagine we are implementing a change project which will improve the processes in the contact centre of an insurance company’s claims department.  The sponsor may value “efficiency” and may have a specific amount of saving that she or he is looking to attain.  Of course, this could be better elaborated with a problem statement and a set of critical success factors and key performance indicators.

 

Yet, even if we have a clear metric we are aiming for, there will be many other stakeholders in this picture.  We ignore their perceptions of value at our peril! For example:

 

Call-centre workers:  What do they value? To what extent have they been consulted and engaged. Certainly, if they are not part of the specification and implementation of whatever solution is chosen, it is likely that they will feel the change has been ‘imposed’ on them, and are unlikely to buy into it.   Would the project be considered successful if we annoyed them so much that they all walked out on implementation day?

Policyholders:  What do policyholders consider ‘efficient’? Is this different from the sponsor’s view? How will these differences be reconciled to ensure that we don’t end up with a situation where we end up upsetting long-term customers so much that they leave.

Third Parties:  Insurance exists to pay claims not only to the policyholder, but also to third parties.  What are their needs? What would they value? What would happen if our process was very ‘efficient’ for everyone except the third party? Would that lead to legal action as we don’t pay claims in time, negating any ‘efficiency’ benefits that we reaped?

 

We could go on, but these are just some of the perspectives that would need to be considered by the team and the sponsor.

 

Value Is a Multifaceted Diamond

The key to defining value is to accept that it is multifaceted, and when we discuss value we should specify value from the perspective of whom. This is not to say that all perspectives should be given equal weight, the sponsor and team should mediate the balancing act.  However, as analysts we can provide useful insight to drive this decision.

 

A useful technique that I have been using for a few years to understand value is UCOB.  Calling UCOB a ‘technique’ is really too grandious, it is really just a mnemonic or a thinking tool.  As with most tools, it is best illustrated with a worked example:

 

Situation: A hospital trust wishes to procure 20 replacement pieces of medical equipment, for use across 17 hospitals.

 

Category Description Example Values
U User End user of business system or process, or situation under discussion. Doctor (who will operate the machine)

 

Consultant (who will interpret the results)

Reliability, ease of use, interoperability with other hospital equipment.
C Customer (Economic) Who pays for the change, the product or the implementation. Hospital Trust, purchasing 20 machines in bulk Low purchase price.
O Owner Who has ownership for the change, product or implementation and maintains it? Individual hospital Low maintenance cost.

High reliability.

B Beneficiary Who benefits from the transformation that the business system creates? Patient Reliability, Speed.

Pain free!

 

Of course, UCOB not intended to be extensive, and it is completely fine to extend and adapt it to fit specific contexts.  Overall it can provides us with a useful starting point and ‘thinking tool’ when working to define the value that a particular initiative should attain.  It can be used alongside a traditional ‘balanced business scorecard’ to help define (and monitor) the outcomes that an organisation is aiming to achieve.

 

Whichever tool or technique we use, it is important to remember that value is in the eye of the beholder!

 


What are your views and perspectives on ‘value’, do you have anything to add?  Do you have any tips or tricks to share?   Please add a comment below, and let’s keep the conversation flowing! 

If you’ve enjoyed this article don’t forget to subscribe.

Subscribe to Adrian Reed's Business Analysis Blog


About the author:

Adrian ReedAdrian Reed is Principal Consultant at Blackmetric Business Solutions, an organisation that offers Business Analysis consulting and training solutions. Adrian is a keen advocate of the analysis profession, and is constantly looking for ways of promoting the value that good analysis can bring.

To find out more about the training and consulting services offered at Blackmetric, please visit www.blackmetric.com

Blackmetric Logo

Leave a Reply