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Posted by Chip Gliedman on March 8, 2012
I had an interesting conversation with a Forrester client in response to an inquiry about the definition of “time to value” for technology solutions. When I received the question, I thought, “That’s easy!” While there is no “GAAP” definition of time to value, I was ready to say that it would be one of two things:
1- The time from project start to the start of business benefit accrual. So, if a project took 12 months to implement, and then three months for the business to adapt to it, the time until business benefits began to accrue would be 15 months.
2- The time from project start to the date at which cumulative business benefits exceeded the cumulative costs. In other words, the time until the “payback” of the investment.
However, in trolling around to make sure that I hadn’t missed anything, I stumbled upon a potential third definition (and I wish I could point back to the source). One commentator on the Web suggested something a bit different – and something that has a great deal of merit as we rely more and more on technology to drive business gains. In his definition, time to value represented the time until the business targets for the solution were achieved. So, rather than looking at the start of benefits, or the date we’re no longer cash-negative, we are now looking at the time until the full desired benefits are achieved. So this becomes:
3- Time to value is the time from project initiation until the projection of total business benefits is achieved.
This change in perspective has a number of implications:
Please share thoughts here, and/or join us for CIO Forum (#CIOF12) in Las Vegas on May 3-4 or CIO Forum EMEA (#CIOE12) in Paris, France, on June 19-20. You’ll learn how rethinking IT strategic planning and innovation can change the way IT and the business partner for overall business success.
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