Measuring the business value of Power Platform solutions
Measuring business value in Power Platform is a critical aspect of ensuring success and return on investment. Power Platform provides a low-code/no-code platform for building applications, automating tasks, streamlining business processes, and infusing AI into your solutions. These capabilities can bring significant benefits and it's important to track and measure the value to the business that the platform is delivering.
The business value of the platform is often seen through two lenses: IT benefits and the value of the applications that run on it. From an IT perspective, core benefits include reducing development and maintenance costs, reducing third-party license spend, and reducing technical debt.
The applications typically help improve one or more business value drivers, such as:
- Performance improvement: Applications that help businesses improve their operational efficiency and effectiveness, improve outcomes, and increase employee and customer satisfaction. We see measurable impact in key performance indicators (KPIs) such as sales growth, time-to-market, and improved customer satisfaction.
- Direct or indirect cost savings: Applications that help organizations reduce their operational costs by automating manual processes, reducing errors, and improving resource utilization. They can also help organizations save money indirectly by improving the quality of products or services, such as by reducing paper, fuel, or other resources.
- Risk mitigation: Applications that help organizations mitigate risks by improving data security, ensuring compliance with regulator requirements, and reducing the risk of errors, such as reducing the risk of a process outage and data breach.
- Business transformation: Applications that help organizations transform their operations and business models. This might include enabling businesses to adapt to changing market conditions, introduce new products or services, or replace aging legacy systems.
Talking to business users
Talking to business users is one method of establishing the business value of Power Platform solutions. Asking targeted questions and actively listening to responses, businesses can gain valuable insight into what drives behaviors, how challenges are faced, and how the Power Platform can solve problems.
Assessing the business value before building a solution is essential to ensure that the solution addresses the specific needs and goals of the business and validates that it aligns to the KPIs of your organization. Evaluating the business value beforehand, companies can identify areas that require improvement, potential risks, and areas where cost savings can be achieved.
Sometimes, it may not be feasible to measure the business value before development due to the natural expansion of the platform. Seeking feedback from key stakeholders of existing Power Platform solutions can help establish the business value, and identify areas for improvement by modifying the solution.
Performance improvements and direct or indirect cost savings
Measuring the improvements Power Platform solutions have on existing processes can be achieved in several ways.
| Measure | Description |
|---|---|
| Time and cost savings | One way to measure the improvement in operational efficiency is by calculating the time and cost savings achieved by implementing an automated process. Compare the time taken to complete a task before and after automation, as well as the associated costs such as labor, materials, and equipment. Savings can be calculated in terms of hours saved per week or month, reduction in errors, and costs savings per task. |
| Error reduction | One way to measure improvements in efficiency is by assessing the error rate. Automated processes are designed to minimize errors. Tracking the number of errors before and after implementation can be a good indication of the improvement in performance. |
| Productivity improvements | You can measure the productivity improvements of automated processes by comparing the output achieved before and after implementation. Include the number of completed tasks or the amount of work completed in a given time period. |
Example questions for assessing performance improvements and cost savings
Here are examples of questions you could ask to establish time and cost savings, error reductions, and productivity improvements:
- What was the average time it took to complete this process before automation, and what is the average time it takes now that it's automated?
- What would it mean to complete a process faster with fewer errors?
- What would you do with the time freed up?
- How much money did you spend on labor costs for this process before automation, and how much have you saved since it has been automated?
- Can you provide any examples of errors or mistakes that occurred during this process before automation, and how has automation helped reduce or eliminate those errors?
- What is the current volume of work handled by the automated process compared to the previous, manual process?
- How has the automated process improved the speed at which tasks are completed?
- Are there examples of tasks that were time-consuming or difficult to complete manually that have been made easier and faster with automation?
Mitigating risk
Measuring the impact that a new application has on mitigating risk can be measured in several ways.
| Measure | Description |
|---|---|
| Risk reduction | You can identify the risks that the application is designed to mitigate and track the number of incidents or issues related to those risks before and after implementation. You can also calculate the financial impact of these incidents and compare the costs before and after implementation. |
| Compliance improvement | If the new application is designed to improve compliance, you can measure the impact by assessing the compliance rate before and after implementation. You could identify the regulations or standards that the application is designed to comply with and track the compliance rate over time. |
| Incident response time | You can compare the time taken to identify the source of an issue over the time taken to resolve the issue before and after implementation. |
Example questions for assessing risk mitigation
Here are examples of questions you could ask to establish risk reduction, compliance improvement, and incident response times:
- How has the Power Platform solution helped to reduce the likelihood of errors or mistakes occurring in the process or function it supports?
- How has the Power Platform solution helped to increase the security and compliance measures for the process or function it supports?
- Are there examples of situations where the Power Platform solution has helped to identify or mitigate risks and issues before they become significant problems?
- What was the average response time for incidents before the Power Platform solution was developed, and how does this compare to the current average response time?
Business transformation
Many different metrics can be used to measure the impact new applications and solutions have on business transformation. The most appropriate metrics depend on the specific application or process being implemented and the goals of the business transformation initiative. Here are some common methods:
| Measure | Description |
|---|---|
| Efficiency improvement | Assess the efficiency improvement achieved by implementing the solution by comparing the time taken to complete a task or process before and after implementation. |
| Revenue increase | One way to measure the impact of a new application or process is by analyzing the impact on revenue, before and after implementation. |
| Employee productivity | You could assess the productivity of employees before and after implementation. This could include comparing the output achieved, or tracking the time taken to complete a task. |
| Total Cost of Ownership (TCO) | For an on-premises or in-house system, you could assess the total cost of ownership. This includes all the costs associated with owning, operating, and maintaining the system over its lifetime. For example, you could include hardware and software costs, maintenance costs, energy and cooling costs, personnel, downtime, and replacement costs. These costs can then be compared to the cost of Power Platform. |
| Employee satisfaction | Surveys, interviews, focus groups, and analytics can be used to measure the impact of a new system or process. Using a combination of these methods, organizations can get a comprehensive view of employee satisfaction before and after a new system or process is implemented. |
Example questions for assessing business transformation
Here are examples of questions you could ask to establish efficiency improvement, increased revenue, employee productivity gains, and TCO:
- How much has the time to complete a particular task or process been reduced since implementing the Power Platform solution?
- Are you able to complete more tasks within the same amount of time since implementing the Power Platform solution?
- Has the number of errors or defects been reduced since implementing the Power Platform solution?
- Has the team been able to meet deadlines more consistently since the Power Platform solution was implemented?
- Has the team been able to take on extra tasks or responsibilities since the Power Platform solution was implemented?
- What are the ongoing maintenance costs for the on-premises system, including software updates, hardware, and technical support?
Additional measures of business value
General business drivers provide a strong foundation for evaluating the effectiveness of Power Platform solutions. Additional measures help provide a more comprehensive and nuanced view of performance.
The following table lists these measures along with example questions.
| Measure | Description | Example questions |
|---|---|---|
| Brand reputation | The perception that people have about a company's products, services and values |
|
| Employee skills and capabilities | The skills and knowledge possessed by a company's workforce, which can contribute to the company's success and growth |
|
| Innovation | The ability of a company to develop new products, services, or business models that meet changing market demands or create new market opportunities |
|
| Time-to-market | The amount of time it takes a company to develop and launch a new product or service, which can impact the company's ability to capture market share and generate revenue |
|
| Competitive advantage | The unique strengths and capabilities of a company that set it apart from its competitors and can give it an edge in the marketplace |
|
| Employee satisfaction | The degree to which employees feel fulfilled, motivated, and engaged in their work, which can impact productivity, retention, and overall business success |
|
| Diversity and inclusion | The extent to which a company's workforce reflects the diversity of the broader community, and the company's efforts to create an inclusive culture that values and supports all employees |
|
| Accessibility | The degree to which a company's products, services, and facilities can be used by people with specific needs |
|
| Environment and sustainability | The company's commitment to reducing its impact on the environment and its efforts to promote sustainable business practices that balance economic, social, and environmental goals |
|
Scenario: How to measure business value
In the following scenario, you've been asked to measure the business value of digitizing an existing paper-based process. Consider factors such as cost savings, increased productivity, improved compliance, reduction of risk, and better data management.
The existing process
Your organization's field engineering team must perform a safety inspection of their vehicles daily before beginning their work. The inspection involves identifying any faults or damage, recording the mileage, and noting other relevant details. The team documents inspections on paper forms, which are stored in filing cabinets at each depot. The field engineering fleet consists of 1,000 vehicles. The inspection process takes 2 to 3 minutes per vehicle and poses challenges for tracking and analyzing the data collected and remaining compliant.
Measuring tangible value
Employee productivity and efficiency improvement: Digitizing the process has the potential to streamline submitting and processing vehicle safety checks. Some effort will be required by the engineers in submitting vehicle checks; for example, they may need to follow new guidelines to ensure the requests are completed accurately. The tangible value of digitizing the process as measured by employee productivity and efficiency is low or difficult to calculate at this point.
Cost savings: Based on the hourly rate of $50 for a field engineer, and assuming each engineer spends 12 hours per year on the process, the total cost to the organization is $600 per engineer, per year.
Based on an analysis of time saving, the potential cost saving of digitizing the process may not be as large as expected. However, there may be intangible benefits of a digitized process, such as improved data accuracy and faster access to information, that are difficult to quantify but still add value to the organization.
Measuring intangible value
Forms are stored in filing cabinets at each depot, which means there's no central visibility or assurance that checks are being performed in a compliant manner. Digitizing the process and establishing a central view on compliance has the following benefits:
- Reduction of risk: Reduces the number of unsafe vehicles in operation and increases the number of vehicle checks being carried out.
- Reduction of cost: Reduces vehicle maintenance by identifying issues earlier.
- Improved employee experience: Improves with a simplified process.
- Improved customer experience: Improves with less disruption.
Business value assessment outcome
By talking to subject matter experts and looking at the current process, you've been able to establish the value of digitizing the process using many measures:
| Measure | Business value | Value type | Value level |
|---|---|---|---|
| Employee productivity | Digitizing the process is unlikely to reduce the amount of time field engineers spend completing paper-based forms. | Tangible | Low |
| Efficiency improvement | Digitizing the process will increase early detection of faults. | Intangible | High |
| Reduction of risk | Digitizing the process will increase the compliance of the daily safety check and lead to a reduction in unsafe vehicles. | Intangible | High |
| Reduction of cost | There may be earlier detection of vehicle faults creating a reduction in fleet maintenance costs. | Intangible | High |
| Employee experience | Simplifying the process may lead to improved employee satisfaction and engagement as employees can complete their tasks with greater ease and efficiency. | Intangible | Medium |
| Customer experience | Less disruption due to faulty vehicles. | Intangible | High |
Learn how Microsoft measures business value.
Aligning to the organization KPIs and OKRs
Aligning the business value of Power Platform solutions to the organization's KPIs and objectives and key results (OKRs) is important to maximize the impact these solutions have.
By aligning Power Platform solutions to KPIs and OKRs, organizations ensure that they're addressing the most critical business needs and driving the most significant impact. This can help ensure that Power Platform solutions are seen as valuable investments by senior leaders and decision makers who are often responsible for approving resource allocation. Various tools and calculators are available to help.
CoE Starter Kit - Innovation Backlog
The Innovation Backlog is a feature of the Center of Excellence Starter Kit that's designed to help organizations prioritize and manage innovative ideas for Power Platform solutions. It's a repository of ideas submitted by employees and stakeholders that can help improve business processes, increase efficiency, or generate new innovations. It provides a great starting point for assessing the actual business value of solutions and ensuring that innovative ideas aren't overlooked.
Learn more:
- Uncovering apps and value using the innovation backlog - Power CAT Live
- Set up the Innovation Backlog components
- Use the Innovation Backlog app
Summary
Measuring the business value of Power Platform solutions is important because it provides insights into how these solutions are contributing to the overall success of the organization. By measuring the business value, organizations determine how their investment in Power Platform is yielding the expected results, contributing to the success of the organization's digital transformation strategy, and identify opportunities to improve processes, automate tasks, and optimize resources.
This guidance is designed to help you better understand the various measures that can be used to define the value of a Power Platform solution. Asking questions of process owners, focus groups, user groups, and app makers helps you to understand user needs, identify common use cases, evaluate existing solutions, and demonstrate the return on investment to stakeholders.
Useful resources
Learn more about measuring business value:
- How Microsoft measures business value
- Defining the value of a business problem
- Total Economic Impact of Power Platform Premium Capabilities (Forrester)
Learn more about customers realizing the value of Power Platform solutions:
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