Gartner Business Value Model - Revision history

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-===Guiding Principles of Business Value Model<ref>The principles that were developed to guide the development of the Gartner Business Value Model [http://docshare01.docshare.tips/files/28974/289748646.pdf Michael Smith]</ref>===
+'''Guiding Principles of Business Value Model<ref>The principles that were developed to guide the development of the Gartner Business Value Model [http://docshare01.docshare.tips/files/28974/289748646.pdf Michael Smith]</ref><'''br />
 The following principles were developed to guide the development of the Gartner Business Value Model:
 *All metrics, when used collectively, are leading indicators of financial performance.
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-===Applications of the Business Value Model<ref>What are the applications of the Business Value Model? [http://docshare01.docshare.tips/files/28974/289748646.pdf Michael Smith]</ref>===
+'''Applications of the Business Value Model<ref>What are the applications of the Business Value Model? [http://docshare01.docshare.tips/files/28974/289748646.pdf Michael Smith]</ref>'''<br />
 The following is an example of how to use performance metrics to identify the activities necessary to optimize the [[Business Strategy|business strategy]]. In this example, the business executives have identified a strategic position to exploit unmet consumer demand for customized [[Product|products]] with quick delivery and at a reasonable price. In the example in the figure below, the Business Value Model is used to identify activities that support this strategic position. Marketing and sales activities are selected to focus on [[Customer Needs|consumer needs]] and ways of [[Customer Engagement|engaging them]]. Operational activities are selected to ensure profitability at a reasonable price. Using the metric definitions, [[Data|data]] can be collected on each of these activities to baseline performance. Then the management team can begin to look for ways of improving performance in each of the activities selected. [[Business Process Improvement (BPI)|Process improvements]] enabled by [[Information Technology (IT)|technology]] as well as [[Organizational Change|organizational changes]] can be identified and form the basis of a list of candidate objectives. The management team then estimates the targeted improvements to the [[Performance Measurement|performance measures]] selected, resulting from various combinations of candidate objectives. These targeted improvements are translated into financial results using the relationship documented in the Business Value Model. This approach reduces the time and risk of identifying an integrated set of activities that optimizes [[Strategy Execution|execution of the strategy]]. It also provides business executives and their management teams with a way to monitor progress objectively
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 [[File:Application of Business Value Model.png|400px|Application of Business Value Model]]<br />
 source: Gartner
 == See Also ==

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-The Gartner '''Business Value Model''' is a set of precisely defined [[Performance Metrics|performance metrics]] and is a useful tool that extends, not replaces, traditional accounting metrics in determining the real [[Business Drivers|drivers of business]] value and in closing the measurement gap. The Gartner Business Value Model is all about information content and is targeted at providing [[C-Suite|senior business executives]] with the information they need to make better decisions.<ref>Definition - What is the Gartner Business Value Model [https://www.gartner.com/en/doc/3713917-the-gartner-business-value-model-a-framework-for-measuring-business-performance Gartner]</ref>
+The Gartner '''Business Value Model''' is a set of defined [[Performance Metrics|performance metrics]] that extends traditional accounting metrics. It is a set of the most common business outcomes resulting from IT investments and ongoing [[IT Services (Information Technology Services)|IT services]]. Each metric in the model is mathematically linked to the financial statements (that is, lagging indicators), providing an ability to simulate the impact of investments on financial results. It is useful tool that extends, not replaces, traditional accounting metrics in determining the real [[Business Drivers|drivers of business]] value and in closing the measurement gap. The Gartner Business Value Model is all about information content and is targeted at providing [[C-Suite|senior business executives]] with the information they need to make better decisions. It designed to enhance IT-to-business communication by enabling greater precision and meaning in addressing increasingly complex [[Business Value|business value]] creation issues and mechanisms (or economic architectures).<ref>Definition - What is the Gartner Business Value Model [https://www.gartner.com/en/doc/3713917-the-gartner-business-value-model-a-framework-for-measuring-business-performance Gartner]</ref>
 The Business Value Model provides the common language necessary to bridge the gap between high-level strategic positions and the tactical activities necessary to make them happen. It does not replace standard financial metrics, it extends them. The Business Value Model adheres to the [[Best Practice|best practices]] for building a causal model. It is made up of leading indicators of financial results. The metrics are mutually exclusive and collectively exhaustive at a mid to upper management level, there are no more then 7 (+/- 2) metrics at any given management level and the relationships between the metrics ([[Cause and Effect Analysis|cause and effect]]) have been documented.
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-[[File:Business Value Model.png|400px|Business Value Model.png]]<br />
+[[File:Gartner Business Value Model.png|400px|Gartner Business Value Model]]<br />
 source: Gartner

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 [[File:Application of Business Value Model.png|400px|Application of Business Value Model]]<br />
 source: Gartner
 ===References===
 <references/>

← Older revision		Revision as of 19:45, 24 February 2021
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	===Applications of the Business Value Model<ref>What are the applications of the Business Value Model? [http://docshare01.docshare.tips/files/28974/289748646.pdf Michael Smith]</ref>===		===Applications of the Business Value Model<ref>What are the applications of the Business Value Model? [http://docshare01.docshare.tips/files/28974/289748646.pdf Michael Smith]</ref>===
	The following is an example of how to use performance metrics to identify the activities necessary to optimize the [[Business Strategy\|business strategy]]. In this example, the business executives have identified a strategic position to exploit unmet consumer demand for customized [[Product\|products]] with quick delivery and at a reasonable price. In the example in the figure below, the Business Value Model is used to identify activities that support this strategic position. Marketing and sales activities are selected to focus on [[Customer Needs\|consumer needs]] and ways of [[Customer Engagement\|engaging them]]. Operational activities are selected to ensure profitability at a reasonable price. Using the metric definitions, [[Data\|data]] can be collected on each of these activities to baseline performance. Then the management team can begin to look for ways of improving performance in each of the activities selected. [[Business Process Improvement (BPI)\|Process improvements]] enabled by [[Information Technology (IT)\|technology]] as well as [[Organizational Change\|organizational changes]] can be identified and form the basis of a list of candidate objectives. The management team then estimates the targeted improvements to the [[Performance Measurement\|performance measures]] selected, resulting from various combinations of candidate objectives. These targeted improvements are translated into financial results using the relationship documented in the Business Value Model. This approach reduces the time and risk of identifying an integrated set of activities that optimizes [[Strategy Execution\|execution of the strategy]]. It also provides business executives and their management teams with a way to monitor progress objectively		The following is an example of how to use performance metrics to identify the activities necessary to optimize the [[Business Strategy\|business strategy]]. In this example, the business executives have identified a strategic position to exploit unmet consumer demand for customized [[Product\|products]] with quick delivery and at a reasonable price. In the example in the figure below, the Business Value Model is used to identify activities that support this strategic position. Marketing and sales activities are selected to focus on [[Customer Needs\|consumer needs]] and ways of [[Customer Engagement\|engaging them]]. Operational activities are selected to ensure profitability at a reasonable price. Using the metric definitions, [[Data\|data]] can be collected on each of these activities to baseline performance. Then the management team can begin to look for ways of improving performance in each of the activities selected. [[Business Process Improvement (BPI)\|Process improvements]] enabled by [[Information Technology (IT)\|technology]] as well as [[Organizational Change\|organizational changes]] can be identified and form the basis of a list of candidate objectives. The management team then estimates the targeted improvements to the [[Performance Measurement\|performance measures]] selected, resulting from various combinations of candidate objectives. These targeted improvements are translated into financial results using the relationship documented in the Business Value Model. This approach reduces the time and risk of identifying an integrated set of activities that optimizes [[Strategy Execution\|execution of the strategy]]. It also provides business executives and their management teams with a way to monitor progress objectively
		+
		+
		+	[[File:Application of Business Value Model.png\|400px\|Application of Business Value Model]]<br />
		+	source: Gartner
		+
		+
		+	===References===
		+	<references/>

← Older revision		Revision as of 19:39, 24 February 2021
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−	The Gartner '''Business Value Model''' is a set of precisely defined [[Performance Metrics\|performance metrics]] and is a useful tool that extends, not replaces, traditional accounting metrics in determining the real [[Business Drivers\|drivers of business]] value and in closing the measurement gap.<ref>Definition - What is the Gartner Business Value Model [https://www.gartner.com/en/doc/3713917-the-gartner-business-value-model-a-framework-for-measuring-business-performance Gartner]</ref>	+	The Gartner '''Business Value Model''' is a set of precisely defined [[Performance Metrics\|performance metrics]] and is a useful tool that extends, not replaces, traditional accounting metrics in determining the real [[Business Drivers\|drivers of business]] value and in closing the measurement gap. The Gartner Business Value Model is all about information content and is targeted at providing [[C-Suite\|senior business executives]] with the information they need to make better decisions.<ref>Definition - What is the Gartner Business Value Model [https://www.gartner.com/en/doc/3713917-the-gartner-business-value-model-a-framework-for-measuring-business-performance Gartner]</ref>
		+
		+	The Business Value Model provides the common language necessary to bridge the gap between high-level strategic positions and the tactical activities necessary to make them happen. It does not replace standard financial metrics, it extends them. The Business Value Model adheres to the [[Best Practice\|best practices]] for building a causal model. It is made up of leading indicators of financial results. The metrics are mutually exclusive and collectively exhaustive at a mid to upper management level, there are no more then 7 (+/- 2) metrics at any given management level and the relationships between the metrics ([[Cause and Effect Analysis\|cause and effect]]) have been documented.
		+
		+	The activities measured fall into three broad groups:
		+	*demand management
		+	*supply management and
		+	*support services management
		+	They are further broken down into "aggregate measures." Each aggregate measure breaks down further into what we call prime measures. The figure below shows the prime measures for sales effectiveness. There are prime measures behind each of
		+	the other aggregates shown in the figure. This model is a tool that can be used to reduce the time and risk of identifying, building and managing an integrated set of activities necessary to [[Strategy Execution\|execute a strategic position]].
		+
		+
		+	[[File:Business Value Model.png\|400px\|Business Value Model.png]]<br />
		+	source: Gartner
		+
		+
		+	===Guiding Principles of Business Value Model<ref>The principles that were developed to guide the development of the Gartner Business Value Model [http://docshare01.docshare.tips/files/28974/289748646.pdf Michael Smith]</ref>===
		+	The following principles were developed to guide the development of the Gartner Business Value Model:
		+	*All metrics, when used collectively, are leading indicators of financial performance.
		+	*No more than seven (plus or minus two) metrics are to be used at any given level.
		+	*The metrics should be collectively exhaustive and mutually exclusive.
		+	*The metrics should focus on the executive and middle management levels.
		+	*The metrics should be based on standard prime metrics to foster collaboration and enable the comparison of
		+	*The metrics should be based on standard prime metrics to foster collaboration and enable the comparison of internal and external entities.
		+	*The metrics should be made flexible by an architecture that allows many combinations of standard and custom metrics.
		+	*The holistic nature of the model should capture the cause-and-effect relationships between business functions.
		+	*The metrics should be selected based on data available in automated business systems.
		+	*The model should evolve and develop over time by adding and deleting metrics.
		+
		+
		+	===Applications of the Business Value Model<ref>What are the applications of the Business Value Model? [http://docshare01.docshare.tips/files/28974/289748646.pdf Michael Smith]</ref>===
		+	The following is an example of how to use performance metrics to identify the activities necessary to optimize the [[Business Strategy\|business strategy]]. In this example, the business executives have identified a strategic position to exploit unmet consumer demand for customized [[Product\|products]] with quick delivery and at a reasonable price. In the example in the figure below, the Business Value Model is used to identify activities that support this strategic position. Marketing and sales activities are selected to focus on [[Customer Needs\|consumer needs]] and ways of [[Customer Engagement\|engaging them]]. Operational activities are selected to ensure profitability at a reasonable price. Using the metric definitions, [[Data\|data]] can be collected on each of these activities to baseline performance. Then the management team can begin to look for ways of improving performance in each of the activities selected. [[Business Process Improvement (BPI)\|Process improvements]] enabled by [[Information Technology (IT)\|technology]] as well as [[Organizational Change\|organizational changes]] can be identified and form the basis of a list of candidate objectives. The management team then estimates the targeted improvements to the [[Performance Measurement\|performance measures]] selected, resulting from various combinations of candidate objectives. These targeted improvements are translated into financial results using the relationship documented in the Business Value Model. This approach reduces the time and risk of identifying an integrated set of activities that optimizes [[Strategy Execution\|execution of the strategy]]. It also provides business executives and their management teams with a way to monitor progress objectively

← Older revision		Revision as of 18:55, 24 February 2021
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−	The Gartner '''Business Value Model''' is a set of precisely defined [[Performance Metrics\|performance metrics]] and is a useful tool that extends, not replaces, traditional accounting metrics in determining the real [[Business Drivers\|drivers of ~~[[Business Value\|~~business]] value]] and in closing the measurement gap.	+	The Gartner '''Business Value Model''' is a set of precisely defined [[Performance Metrics\|performance metrics]] and is a useful tool that extends, not replaces, traditional accounting metrics in determining the real [[Business Drivers\|drivers of business]] value and in closing the measurement gap.<ref>Definition - What is the Gartner Business Value Model [https://www.gartner.com/en/doc/3713917-the-gartner-business-value-model-a-framework-for-measuring-business-performance Gartner]</ref>

← Older revision		Revision as of 18:53, 24 February 2021
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−	'''~~Content Coming Soon~~'''	+	The Gartner '''Business Value Model''' is a set of precisely defined [[Performance Metrics\|performance metrics]] and is a useful tool that extends, not replaces, traditional accounting metrics in determining the real [[Business Drivers\|drivers of [[Business Value\|business]] value]] and in closing the measurement gap.