Quick overview of the concepts behind CVR. Please contact me if you would like to put the concepts into action ! I can guarantee a coaching session with me will change the way your managers and executives view decision making !

1. Making Business Decisions:
A New Look at the Basic Elements of
Business Value
Paul Morse
pjsna@msn.com

2. Agenda
Background
The Essence of Business Spending
Cost Value Risk
Cost
Value
Risk
Business Layers
Discussion Throughout

4. The Essence of Business Spending
Some Spend - $
Equals some Unit of Work
Over Time
$ =
Work Unit
Time

5. CVR – Cost Value Risk
The three elements of any decision
What is it going to cost?
What will I/we get for that cost?
What are the risks if I/we do it, or don’t do it?
Cost Value
Risk
Risk
Value
Cost

6. Alternate Decision Timelines
T0
Option A – CVR Profile
Option B – CVR Profile
CVR Profile
Decision Point

7. What is Cost ?
Many ways to look at cost
TCO – Total Cost of Ownership
Looks at Lifecycle costs
Hard/direct and soft/indirect costs
ROI - Return On Investment
Hurdle Rate is key - % return to beat
EVA – Economic Value Added
Similar to ROI
Not Common is US
Internal to Company
Most common – Spreadsheet jungle

8. What is Valued ?
Support
Partners
Security
Interoperability
Seamless Upgrades
Technology Roadmaps
Availability/uptime
Strategy Integration
Assessment help – studies, POC, training, etc.
Indemnity

9. Common Risks
Opportunity Cost – wrong decision
Technology – obsolete/change ?
Implementation Issues/timeframe
Cost Overruns
Legal
Organizational
User Acceptance/Training effort
Vendor longevity/stability

10. Ideal CVR Profile
C V R
Strive For a Better CVR Profile Than the Competition
And be ready to prove it …..

11. CVR Summary
Universal decision making method
Works on everything
Streamlines decision making at all levels of
an organization
Very flexible/expandable
Every “suggestion box” should use it
Great way to stand out from the
competition.

12. Strategies
Expense
Asset/Equity
Management
Sales
Governance
Key Business Elements/layers
Assess
CVR
TCO
ROI
TVO
Technical
RFI/P
Etc.
Project
Portfolio
InfoWorker
User Apps
App Plat
LOB
ERP
CRM
Portal
Infra
Network
Storage
Cloud
Email
F&P
Cogs/Sales
SGA/Sales
IT/Sales
Key Perf
Indicators
Rec’v days
Invntry days
Cost/invoice
IRR
NPV
ROI,
Etc.
Cash Flow
Corporate
Objectives
Revenue
Net Income
Return on
Assets/
Equity
Business Results

13. Resources
IBM Institute for Business Value
http://www-
935.ibm.com/services/us/gbs/bus/html/bcs_whatwethink.html
Oracle CIO Central
http://www.oraclecio.com/Main/Home/Home_w.html
Microsoft
http://www.microsoft.com/windowsserver/compare/linux/windows
-server-tco.mspx
MIT Sloan CISR http://cisr.mit.edu/
CIO.com http://www.cio.com
CFO.com http://www.cfo.com
http://www.amazon.com/Making-Technology-Investments-Profitable-
Business/dp/0471227331
There are many, many more…

14. Discussion
Audience example if time

15. Thank You … no, really.

16. Labor
Capital
Technology
Natural Resources
Partners,
Etc.
Organizational Boundaries
External ForcesOrganizationResource Pool
Market
Regulation
Natural
Competition
Etc.