Strategic Value of Recommendations

DATA 2203 – Week 6

 AGENDA
1. Background
2. Learning Outcomes
3. Strategic Value of Recommendations Discussion
 BACKGROUND
You will see the steps for determining the strategic value of your
recommendations using the business plan and its milestones,
estimates, and projections.

You will also discover other kinds of strategic planning tools such as the
Ansoff Growth Matrix, Boston Matrix, and Long-Run Return Pyramid;
you can use these tools to demonstrate the strategic value of your
recommendations.
 LEARNING OUTCOMES
1. Explain the role of strategic value when applied to recommendations
2. Create an approach to determine a recommendation’s strategic value to a business plan
3. Assess a recommendation’s strategic value to a business plan using milestones and projections
4. Assess a recommendation’s impact on the financial statements using the recommendation’s
percentage of contribution
5. Explain the benefit of a recommendation using financial statements
 KEY TERMS
Human Capital – This includes the skills, knowledge, and expertise of an
individual or group of people. This includes the perspective of investing in people
as assets and not treating people as just expenses.

Measure – This is another name for a metric or indicator.

Milestone – This is an action or event that is marked as being significant for a
plan or strategy.

Projection – This is an estimate or forecast based on current

information.
 NARRATIVE DISCUSSION
Question:

Can you turn the big picture into strategic value?

 EXTENT OF STRATEGIC VALUE
The strategic value of a recommendation is often underplayed.
How do you valuate the strategic value of something that could very well change
everything?

How could you see the lasting impact of desktop computers, the Internet or mobile
devices? The strategic value of a recommendation can lead down roads that were
unimaginable just a couple of years ago.
What was strategic value then is just a fraction of what strategic value is now.
 EXTENT OF STRATEGIC VALUE
Today, the strategic value of an opportunity is more than just the
value of the opportunity. Strategic value also includes the value
of the organization being able to change to secure that opportunity.
The ability for change itself is a strategic value.
 STRATEGIC VALUE FOR BUSINESS PLANS
To make sure your recommendation is considered and accepted, you must
show how your recommendation can impact the organization’s business plan.

Here are the steps you would take to estimate the strategic value
your recommendation based on the business plan.
 STEPS IN DETERMINING VALUE
Identify the top milestones.
● Identify the top 10 milestones in the business plan for the next five years.

Identify the top sources of income and their projections based on those
milestones.
● Identify the top 10 sources of income and their projections. These can be
revenue from customers or funding from investors and banks.
Note: If the business plan is for five years, pick the projection at year five.
 STEPS IN DETERMINING VALUE
Identify the top expenses in operations and their projections
based on those milestones.

This information can be found in the Human Resources, Finances, and

Systems sections of the business plan. Estimate how much your
recommendation contributes to the total estimated expense if your
recommendation is implemented.
 STEPS IN DETERMINING VALUE
Record the steps.
Record your steps and thought process. You will be using these when you present
your recommendation to management.
Your company’s business plan has been analyzed, examined, and studied.
Use its information to show just how valuable your recommendation is?
 READINGS
Analytics are not just used to track the progress of your business plan. Analytics can
help determine what the business plan is.
Predictive analytics commonly used in an industry can provide
businesses with many ideas on how to remain competitive in that industry.
In the readings document, 147 Examples of Predictive Analytics, examples are
given how predictive analytics can be used by industry, organizations and in your own
personal life.
 COMPARING STRATEGIC RECOMMENDATIONS
To compare strategic value between recommendations, you can use the
strategic value you estimated from your organization’s business plan. You
can also use other tools, ones that your organization uses for strategic
planning.
 Recommending Growth Strategies
Ansoff Growth Matrix
is a strategic planning tool that helps you
devise strategies for future growth.
The output from the Ansoff product/market
matrix is a series of suggested growth
strategies which set the direction for the
business strategy.
 COMPARING STRATEGIC RECOMMENDATIONS
Boston Matrix
is a chart used to analyze your products by grouping them
into categories.
Categories include:
• Cash cows (high market share, slow industry
growth),
• Dogs (low market share, slow industry growth),
• Question marks (low market share, high industry
growth)
• Stars (high market share, high industry growth)

You can see the strategic value of your

recommendation from a marketing viewpoint
 COMPARING STRATEGIC RECOMMENDATIONS
Long-Run Return
Pyramid
The Long-Run Return Pyramid strategy tool is
a checklist of growth options. You can use this
to strategically review your recommendation.
 ESTIMATING IMPACT WITH FINANCIALS
Like all things in business, you're going to need to measure the impact of your
recommendation over several years. If you want your recommendation to stay tied
to the business plan, you will measure how well your recommendation is
performing and compare that to the projections from the business plan.
 BENEFITS OF FINANCIAL IMPACT
When information is presented to stakeholders in the form of Financial Impact, it gets them
listening.

- Clear, Actionable target KPI that you can measure before/after implementation.
- Obvious benefit to the company that leadership can see the true value of.
Weakness

- Opportunities that builds long-term financial value, without short-term benefit can be
disheartening.
 IIBA - Requirements Analysis and Design Definition
Objectives of this Knowledge Area are:
- Describe requirements using analytical techniques

- Ensure requirements and designs are internally consistent and high quality

- Ensure requirements and designs deliver business value

- Structure requirements and designs so they cohesively support the business purpose

- Recommend the solution that provides the greatest overall value

 RADD – 6 Steps in this Knowledge Area
1. Specify and Model Requirements
2. Verify Requirements
3. Validate Requirements
4. Define Requirements Architecture
5. Define Design Options
6. Analyze Potential Value and Recommend Solutions
 Specify and Model Requirements
Input
- Elicitation Results
Elements
- Model Requirements
- Analyze Requirements
Techniques
- User Stories
Specify and Model Requirements
 Verify Requirements
Inputs
- Requirements
Elements
- Ensuring terminology is understandable and consistent
- Adding examples where clarification is needed
Outputs
- Requirements (verified)
Verify Requirements
 Verify Requirements
Purpose
- Ensure that requirements and designs align to business requirements /
satisfy the requirements.
- Designs satisfy the requirements
- Overall goal is to achieve stakeholder’s desired future state.
 Validate Requirements
Inputs
- Any requirement / design can be validated.
- Validation cannot conclude until all requirements are completely verified.
Elements
- Identify Stakeholder/customer assumptions
- Define measurable outcome. Set a baseline/KPI.
 Validate Requirements
Output - Validated requirements:
- Can be demonstrated to deliver benefits to stakeholders
- Aligned with business goals and objectives of the change
Requirements that cannot be validated either:
- Do not benefit the organization
- Do not fall within the scope
Validate Requirements
 Define Requirements Architecture
Purpose
● Requirements collectively support each other.
● Requirements fully achieve the business objectives.
 Define Requirements Architecture
Input Elements
Information Management Approach
- How the data is stored/accessed
Requirements (any state)
- Every requirement stated at least/only once.
Solution Scope
- Review to ensure alignment with boundaries of desired outcome.
 Define Requirements Architecture
Output Elements
Requirements Architecture
- Completed interrelationships
- Contextual information as required
Define Requirements Architecture
 Define Design Options
Purpose
- Define solution approach
- Represent design options to meet desired future state
Input
- Change Strategy
- Requirements (validated, prioritized)
- Requirements Architecture
 Define Design Options
Elements
● Define whether the solution is created, purchased or hybrid.

● Consideration of technological integration is important

● Identify any improvement opportunities

● Requirements Allocation
 Define Design Options
Outputs
Design Options may include:
● Describe various ways to satisfy requirements in a context

● Potential improvement opportunities

● Components required in the solution

Define Design Options
 ANALYZE POTENTIAL VALUE AND RECOMMEND SOLUTION
Purpose
- Estimate potential value of each design option.
- Establish which potential solution is most appropriate.
Input
- Design Options
- Potential Value
 ANALYZE POTENTIAL VALUE AND RECOMMEND SOLUTION

Elements
● Expected Benefits - Describe positive value of solution
○ Benefits often realized over a long time.

● Expected Costs
○ Includes timeline, operating costs, human resource

● Determine Value based on:

○ Benefits and costs to stakeholder
 ANALYZE POTENTIAL VALUE AND RECOMMEND SOLUTION

Outputs
● Solution Recommendation

● Identifies suggested, most appropriate solution.

○ Solution should maximize value provided
ANALYZE POTENTIAL VALUE AND RECOMMEND SOLUTION