KVIs — Measuring values for Digital Products and Services
In today’s complex digital world, continuous delivery of incremental values for a Digital Product or Service will be required to keep improving the engagement with the present and future customers. Measuring the right values delivered by a digital product or service in the digital domain would begin with the ability to capture data for all the parameters related to the product or service.
Today many ecosystems are available that provide several possibilities to monitor the interactions between a product or service and its users. One of the ways to realize this is by implementing an Agile product management mindset and principles to drive the values in the right direction thus contributing to enriching the customer journey throughout its lifecycle.
Advancing along this journey of improving the values of a product or service would require constant monitoring of the present state, optimization and feeding to define the next step to avoid any undesirable consequences.
What shall be Measured?
Measurement begins with defining the right parameters to measure. Historically Key Performance Indicators (KPIs) are measured, analyzed, and utilized to define the future roadmap of a product. The disadvantage of measuring KPIs in a traditional way is that it may not indicate or provide clarity on the values of a product but may focus on ‘how well the product is performing’. So, considering only KPIs for prioritizing and approving a budget for a product roadmap may not lead to the desired output, which may call for measuring values of a product in a more specific approach like identifying Key Value Indicators (KVIs) focusing values for the product. The identification of right KVI will require at first, an understanding of the definition of value.
When a digital product or service has been delivered, it has primarily two elements as explained by Evidence-Based Management framework:
Outputs — which are produced by the team such as the release of product features, reports, defect reports, product reviews, and so on.
Outcomes — which are experiences of the product experienced by a customer or its users. It may represent some new or improved capability that the customer or user was not able to achieve before.
Values are more realized in the outcomes which contain primarily two elements: an explicit one which may be easy to measure and is quantifiable and the other one is implicit which may be hard to measure and not easy to quantify. Values are context and time dependent as they keep changing every time after inspection and adaptation along with the maturity of the product. KVIs measure the value of benefits that may not always readily translate to a direct financial value but will contribute to building future forecasts.
KVIs and their benefits
KVIs create an environment in the organization for valuing non-financial benefits in addition to financial ones, assisting the leadership team to make better decisions and may lead to a more pragmatic approach to approval of the budget. KVIs improve focus on customers and facilitate the design team bringing them closer, appreciating the team’s contribution to achievements of the organization that can indeed boost creativity, motivation, be more agile, and bring more success to it.
Conclusion
Measuring KVIs along with KPIs will bring more clarity on the status of the values delivered by the Product or service to the customers and provide an input to build the future roadmap for improvement with consistent releases and redefine them with time and context. With the use of a digital platform, it will be much easier to measure values, analyze and redefine them as required. This approach will support to achieve successful implementation of the Digital transformation strategy.
About this article
This article has been written by a student on the Grenoble Ecole de Management’s Advanced Masters in Digital Strategy Management. As part of a content creation assignment, students are given the task of writing articles based on their digital interests and disseminate the articles online. Articles are marked but we make minimal changes to the content. Thanks for reading! James Barisic, Programme Director, MS DSM.
