Business value: What is it and who contributes to it?
24 July 2020
Posted by: Agile Research Network
Being able to regularly deliver business value is the main aim of agile IT projects. It is often stated as the key driver for adopting an agile approach as it can deliver competitive advantage. But what exactly do we mean by business value? Most of us know we can recognise it when we see it. But, how do we define business value for a project? And, who should contribute to defining it?
As researchers we became interested in this topic when we were asked to investigate whether an agile approach might improve the delivery of business value for a public-sector housing organisation. To explore this, we first had to look at what business value is. We studied an IT project within the organisation, analysing stakeholder views, user stories and meetings to uncover how business value was identified for the product. What we found was more complex and multi-layered than we had anticipated.
The project involved the creation of a web-based anti-social behaviour (ASB) reporting system for tenants. We identified 8 stakeholder groups for the project: 4 were internal to the organisation (housing directors, housing managers, ASB officers and the IT team) and 4 were external to the organisation (tenants, police, local council directors, outsourced IT developers). Each of these groups had different interests and a different focus on what made the product worthwhile to them.
We found that some stakeholders had far more influence over the project than others. The ASB officers, housing managers, and IT team had the most influence. The housing directors, local council directors, and outsourced IT developers had some influence. However, the tenants and police had almost none.
The most influential stakeholders were internal to the organisation and the least influential were external. Since stakeholders have different views of value, the level of influence of each group strongly indicates whether their values will be represented in the product. The low influence of some end users (tenants and police) in this project indicated that some customer experience values might be missed.
We identified 6 business values and 33 IT business sub-values (see table below). The sub-values gave details about how to deliver each business value. For instance, the sub-values associated with cost saving identify specific types of saving such as reducing face-to-face visits and staff numbers.
The overall delivery of cost savings was dependent on several, if not all, of these sub-values being implemented. The cost savings example also shows that the way a specific business value needs to be implemented may be complex and spread throughout the system rather than being implemented in one function.
IT Business Value Theme
IT Business Sub-value
Staff efficiency; Process efficiency; Reduce visits;
Reduce paper; Reduce costs; Reduce staff
Reduce customer stress; Up-to-date information; Timely information; Device-independent; Ease of use; Improve interaction;
Responsive to customers; Resolve customer problems;
Customer satisfaction; Service improvement
Always available; Automation; Reduce duplication; Device-independent; Digital information; Better data capture; Data accuracy; Integrated system; Reduce face-to-face; Open data; Digital access
Maintain confidentiality; Data legitimacy
IT as Transformation Enabler
IT as enabler; Deep transformation; Key deliverables
Social Service Improvement
Better service; Differentiate service; Safer neighbourhood
There were both similarities and differences in value perceptions between different stakeholder groups. All groups identified ‘cost saving’ and ‘customer experience’ as important business values but only directors mentioned ‘IT as being an enabler of organisational transformation’ and only the IT project team mentioned ‘social service improvement’.
We gained most information for our analysis by directly talking to stakeholders as we found that the business values for the product were not explicitly documented. Although, we also found that several of the business values and sub-values we identified were embedded in the user stories in that they could be deduced from an analysis of them.
In summary we found that business value refers to product or system capabilities that benefit one or more stakeholder group. Different stakeholder groups have different perceptions of business value, and influential stakeholders shape which business values are identified and embedded into a product.
Stakeholder groups become influential by being involved in discussions with the IT project team during the early stages of the product development. Involving a wide range of stakeholders in product discussion is likely to improve identification of relevant business values. Explicitly documenting expected business value in the business case, user stories, or elsewhere is likely to be helpful.
This blog was written by the Agile Research Network. The ARN is a collaboration between researchers at two UK universities, The Open University (OU) and The University of Central Lancashire (UCLan), at the forefront of investigating Agile methodologies.
Gregory, P., Strode, D., Barroca, L., Sharp, H. & Taylor, K. (2020) Stakeholder Perceptions of IT Business Value in a Public Sector IT Digitalisation Project