Compare apples to apples with value analysis
Value analysis is designed to help business and technical decision makers build a back-of-the-envelope calculation of their return on technology investment. Value analysis is a flexible method, which uses a variety of standard business analysis tools that can be chosen to perform analysis of varying depth on different technology investments.
Every NuovaDyne value analysis includes a 5-step process that:
- Ensures that stakeholders are in alignment and agree on the metrics that measure success.
- Link specific capabilities of a technology to specific business, company, or organizational needs.
- Identify and assign dollar values to the positive outcomes of the proposed investment (benefits) and its material requirements and externalities (costs).
- Identify the types, probability, severity, and mitigation methods of specific risks.
- Create a projected cash flow of the proposed investment by using generally accepted accounting practices and terminology such as net present value, return on investment, internal rate of return, and payback period.
Value analysis groups company-specific benefits into categories that are relevant to the business and technical sides of a company. Financial analysis for clean or green technology companies can incorporate a wide variety of non-classical external costs that support analysis that identifies a triple bottom line of economic, environmental, and social value.
The following example shows the results of a value analysis for new software infrastructure of a healthcare services provider. However, the same analysis can also be applied to products and services of clean or green technology companies.
The financial model that results from a value analysis enables C-level executives and senior business decision makers to compare different technology investments. One example of a value analysis deliverable could be a cash flow and investment break-even chart.
You can use value analysis as a sales tool to help your customer build a business case, or assess the potential business impact of technologies or products from competing companies. Either way, you owe it to your company and shareholders to conduct a business value analysis.
Know the value of your products and services.