1. Value chain stages that aggregate value measurements
Value chain stages (based on Porter’s value chain) are
collaborations (capability methods) that delegate to more operationally
specific capability methods. Each value
chain stage contributes the aggregated values of the activities and capability
methods it engages. The aggregations
extend to delegated capability methods to the extent the model is completed or
until contributions of further delegations are estimated or derived from actual
operational measurements. This provides meaningful value measurement contributions
that are estimated without added cost and time required to develop a more
robust model.
2.
Value proposition reflects a customer perspective
A value proposition does not only capture the value
measurements associated with the delivery of a product or service, but the
measurements are translated to levels of customer satisfaction and weighted
according to customer priorities for overall expected satisfaction. Consequently, it expresses the values that
the enterprise expects to deliver to the customer from the customer’s
perspective.
3.
Satisfaction level computations
A value proposition component (a line item in a value
proposition) provides for the translation of a value measurement to a customer
satisfaction level. This computation
will depend on the value type and the target market.
4.
Weighted satisfaction levels
Each value proposition provides for a weight on each value
type reflecting the level of interest of customer(s) in the target market. These provide for computation of a weighted
average for an overall value proposition level of customer satisfaction.
5.
Activity-level value contributions
VDML captures value contributions of individual activities
to be aggregated up value streams in support of value proposition
computations. The need to assess value
contributions at the activity level of activities was recognized by Michael
Porter as a limitation of the generally accepted approach to value chain
modeling. Activities can be aligned to
actual business operations for capture of actual measurements or development of
estimated measurements.
6.
Unit of production value impact
Measurements are based on a unit of production within each
capability method. This enables
computation of averages where activity flows converge or diverge. It also enables the contributions of a
capability method engaged by delegations to be appropriately adjusted according
to the fraction of units of production contributed by the engaged capability
method. VDML supports these adjustments to
the value measurements returned from a delegation.
7.
Value proposition impact analysis
When changes to a capability method affect value
measurements, these changes will propagate through all of the value streams in
which it participates to update all of the associated value propositions. A display can trace these value streams to
identify the affected value propositions and show the impact.
8.
Multiple market segment value propositions
A value stream may feed different value propositions for
different customers or target markets.
Each value proposition then has satisfaction computations and importance
weights appropriate to the particular customer or market segment.
9.
Value streams with shared capability methods
Capability methods can be shared across value streams and
lines of business for economy of scale and enhanced agility. Value and performance measurements depend on
each context and the scenario.
10. Enterprise-level
performance optimization
Capability methods may be engaged by multiple lines of
business with different performance measurements, costs and defect rates.
Changes to capability methods can be immediately evaluated across all affected
value streams and lines of business to measure, balance and optimize
adjustments from an enterprise perspective from individual activities to value
propositions.
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