"If I identify the value proposition for the project, then I provide direction for downstream decisions, but I don’t have any standard way to clearly state it accurately."
The content of some of the boxes change depending on the project, but the placement of the 9 boxes of the Business Model Canvas is the same. I suppose just how you place these boxes isn’t as important as deciding and then sticking to it. A common look between projects helps identify patterns and facilitates comparisons. The critical thing is to address these characteristics about your projects, and provide a quick summary for comparisons.
The first step in the project charter based on the Business Model Canvas is getting to the value proposition. Your project may have other documents like the governance plan, communication plan, and vision scope document; all part of the larger Project Charter. In that case, this might become the summary of the business section of the assembled Project Charter. Depending on your needs this can be stand alone, or a section of a larger document.
Completion of these boxes may be the result of an extensive strategic planning effort, or a 30-minute interview. Get what you can, and then focus efforts on finding the answers you’re not feeling comfortable with.
Within the Value Proposition box, there is the optimal type of proposition to identify and the CORE proposition. Our first step is to decide what type of offering this project will be delivering. Granted, most projects have more than one deliverable. If this is you case, then think of the aggregate of all the deliverables. What is it that you will truly be delivering? Why are the clients coming to you for that deliverable? You want to simplify the answer down to one of three types of value proposition; Unique, Intimacy of familiarity, and cost.
UNIQUE: This is when your project team can deliver a product or service that cannot be acquired anywhere else. An example might be found in an IT organization that provides security credentials that can’t be gotten from anywhere else. You must go to the IT Department for the credentials. Another example could be a sales person’s rolodex full of past clients that can be called on. The company can’t get that unique set of names that can be called on from anywhere else. I’m not convinced of this value, but it is unique. However, typically, the Unique type of proposition yields the premium price. As a project manager and sponsor, you try to create a unique type of deliverable to increase the perceived value of the project.
INTIMATE: This type of proposition states that your project team has intimate experience with creating the desired deliverable. Due to your familiarity of the problem/solution space, your can deliver a product or service better than anyone, or can do it with less errors.
Maybe your intimate understanding will enable you to be more innovative. This type of proposition is a little more flexible than the UNIQUE proposition, and is slightly less competitive. Let’s face it, its hard to prove your better when there are three other teams both internal and external that have an “Intimate” knowledge of the problem/solution space.
Typically, your price point is lower than the UNIQUE type. Understand that price is the total “cost” of ownership. How much pain is the client willing to go through to acquire and own the deliverable. The lower the price you can ask, the better the deliverable must be. The INTIMATE value proposition must be better packaged, better supported, and easier to acquire than the UNIQUE deliverable. Client involvement is normally less, and mostly oversight in nature. After all, you know what they want, even better than they do.
COST: Think ‘Economy of Scale’. You can offer this deliverable faster, cheaper, and at higher quality than your competitors because you do this more often. You do this all the time, and one more just doesn’t impact the cost that much. An example would be a brochure printing. The artwork and design has already been completed. If your already set up, an additional printing just isn’t that much more cost. It’s easy. I call Frank and ask him for 100 more of the brochure. We don’t discuss the layout, the paper size, where to send it- nope its all done. It’s that easy. You just say, “Give me more!”
The ‘Economy of Scale’ deliverable is very desirable, and has the most demand. If using this type of value proposition, you expect to do it a lot, where as the UNIQUE type, you expect to do it less often, and so must charge more, in all aspects of cost.
Now once you have characterized the deliverable, hence the project, as to deliverable type, we want to take a look at the proposition itself. There are five types of valid propositions, you must select one.
MORE VALUE AT LESS COST: This is the easiest proposition to accept, and easiest to prove. You show what new value they will receive, and how this cost less than it did before. I this case, people like to know what has changed. They want to believe you wouldn’t just charge more than you had to. They are looking for a new competency, new technology, or even a reorganization. You need to point to something, and say because of this we can now do that, in order to maintain credibility.
MORE VALUE AT THE SAME COST: This is an easy proposition to accept. It feels like your giving me something for free. Of course, if I value the new free offering, then I will like it. Normally, this can be explained with process efficiencies, so it’s less important to point to the change enabler.
MORE VALUE AT MORE COST: This is a difficult proposition to accept. From the project team’s point of view, it makes the most sense. If you are going to deliver more value, then of course you will need to charge more. Well, you clients don’t see thing this way.
First you will have to prove that there is more value. More value in past offerings may not be so hard, but more value than delivered from a competitor may be difficult to demonstrate, and this proposition becomes expensive fast. Remember, you must justify more cost, and that seldom works out well.
SAME VALUE AT LESS COST: This is an easy proposition to accept. Demonstrate that the change caused by the project does create the same value. Next, demonstrate how it costs less, or is easier to get, or easier to own, or easier to use. Take away the change risk and bam, you got it.
LESS VALUE AT LESS COST: This is a difficult proposition to accept. Know one wants less value, but the real challenge is to demonstrate that the less value isn’t as much as the less cost. You must show that even though you client will lose a little, the reduction in cost is worth it. Prepare for a long adoption process with this proposition.