Building the Business Value Scoring Tool

A number of options were investigated to see if a process selection method could be borrowed to fulfill the above-mentioned goals. Some examples included Kaplan and Norton's Balanced Scorecard (Kaplan and Norton, 1992); the Australian Business Excellence Framework (Australian Quality Council 2001); Critical process identification method (Huxley 2003; Huxley and Stewart 2008); the Australian/New Zealand Risk Management Guidelines AS/NZS 4360 (Standards Association of Australia & Standards New Zealand 1999); and an in-house-built method titled the “Process Filtering Model”.[1] None of these was able to address the goals and requirements of the proposed process selection model. Hence a new tool/method was designed aiming to fulfill this.

High Level Overview of the Business Value Scoring Tool

The tool allows a requester, within approximately 5 min[2], to score a particular project to determine its business value. There are two main parts to it: (1) a risk and opportunity assessment (ROA, which has six dimensions that it works off) and (2) cost. The ROA[3] score is divided by the Cost to give a final BVS. Costing and risk and

Fig. 1 Business value score calculation formula

opportunity scoring is done by two separate parties. The two tasks of calculating the costs and deriving the ROA are deliberately kept independent of each other, to avoid one value influencing the other. There are constants included in the calculation to manage the potential variations. See Fig. 1 for the overall formula for the BVS calculation. The following sections describe each of the main elements of the tool. Appendix 2 provides a summary of the BVS model (initial and revised versions)[4].

  • [1] This was designed to filter through a set of processes that QIC was looking to improve, which was designed and implemented to manage the prioritization of high ranged projects. In most cases it helped identify areas for improvement, but it did not equate to the available resources.“a list came back with 20 and we distilled that down to 10, but we really only had capability to work on 3, 2 or 3, 3 or 4, and so we had to objectively assess, well which 4 is it going to be”(Operations Strategy Manager, QIC, Personal Comm.,10.07.2008)
  • [2] This time frame was only to fill the tool components. It was assumed that the requester would be intimate enough with the requested project to be able to enter the details into the tool without further investigation
  • [3] ROA, or Risk and Opportunity Assessment, is a measure of a (requests for change) RFC's value to the business. It requires a critical assessment of the RFC and its value, either through delivery of a benefit or the mitigation of a risk
  • [4] An introduction into foundations of (investment) accounting for BPM is presented in (vom Brocke and Grob 2011) as well as in (vom Brocke and Sonnenberg 2014) in this handbook
 
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