"What is a cynic? A man who knows the price of everything and the value of nothing."
"I conceive that the great part of the miseries of mankind are brought upon them by false estimates they have made of the value of things."
Benjamin Franklin Quotes
"Only the man who crosses the river at night knows the value of the light of day"
Chinese Proverbs Quotes
"Price is what you pay. Value is what you get."
Warren Buffett Quotes
"What we obtain too cheap, we esteem too lightly; it is dearness only that gives everything its value."
Thomas Paine Quotes
"Nothing can have value without being an object of utility."
Karl Marx QuotesI am on a two week "break" on jury service, and what a fascinating insight into society one gets by witnessing the legal process in full swing and getting to participate in it.
My return to my blog is partly inspired by a new paradigm in content creation by the man who kicked off the e-book industry many years ago - Mark Joyner. The Simpleology Project Marketplace will transform the way people consume instructional content by presenting it in actionable projects (with tasks) rather than lengthy books to read. In essence, the value of the content is being surfaced up directly for consumers to act upon.
The topic of unlocking or unleashing value is something I am very passionate about and have been working on for a number of years with regard to corporate information systems and specifically SAP. I will use SAP as my example throughout this post, though the same principles can be applied to all corporate systems.
SAP is used by 86% of the global Fortune 500 companies and 98% of the 100 most valued brands. Why do companies buy and implement SAP? Well, usually because someone makes a strong business case for doing so on the basis of improved efficiency of transaction processing and sharper business insight. Other factors that may be cited for choosing SAP are its scalability and flexibility (it can be customized to meet evolving business requirements), its strong architecture with a process-centric focus, which represents best practice gleaned from top performing companies over the last 30 years, real-time integration, as well as the simple allure of a robust German platform for running your business.
In effect, the business case says "our business will run better on SAP" and promises recurring benefits to the business. The deal is done, the software is bought and a transformation programme launched to implement the software alongside business process re-engineering initiatives and a change programme. Assuming the implementation goes well (which is not always the case, as many a customer will testify and present as evidence against the value proposition of SAP), the transition into "Business-As-Usual" happens, and the first few months are usually spent fixing bugs and making improvements. For a few customers, the benefits will be tracked or "declared" following some analysis; for many the focus will be fully on stabilization and operation.
Some time after the implementation of SAP, the company comes to a fork in the road. This fork in the road represents two paradigms or ways of seeing the SAP system(s).
The first fork, which is taken by most companies, is to see SAP as an expensive but necessary cost of running the business. The focus then is surely to minimize this cost as much as possible. So a variety of cost cutting instruments are applied e.g. outsourcing/off-shoring resources, a separation between IT and business, avoiding further investment, reducing the patching/enhancement cycle, and looking to reduce headcount in the SAP support organisation wherever possible. In essence, the SAP system(s) is seen as a commodity which delivers a fixed outcome and therefore the aim is to reduce the cost to getting that fixed outcome for the business.
The second fork, which is the road less-travelled (though more companies are awaking to this), is to view the SAP system(s) as an asset, a source of recurring benefits for the business. And by nurturing this asset, its value to the business can be protected, increased and unleashed. This paradigm usually leads to a focus on competency centres, on close collaboration between IT and business, on continuous improvement initiatives, ready investment and innovation adoption, regular patching /enhancement cycle and on investing in people and capability to leverage SAP more. The essence of this approach is that there is a belief that the business can run even better if the SAP asset is nurtured.
So what are the typical effects of these two approaches? Well, you only have to look at the symptoms reported by many SAP customers to see the cost road in action – system difficult to use and “clunky”, dis-engaged users who need lots of training (repeatedly), dissatisfaction with support, costly projects that frequently fail to deliver the full promised value, perception of SAP as being slow and expensive, data quality issues, poor reporting, inability to exploit innovation due to system version etc. Customers on the value road tend to avoid/address most of these issues, as they unlock and protect the value of their SAP asset. How do they do this? By applying the CURE.
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