Value Proposition Canvas - Revision history

Tkokotas at 17:29, 16 November 2018

2018-11-16T17:29:21Z

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			''Developed by Walther Emil Eriksen''


	==Abstract==		==Abstract==
	An important aspect of project management is stakeholder management which contains many different tools and theories. An essential part of this management is the alignment of stakeholder expectations with project deliverables. The reason behind a project initiation is a business case. These business cases are based on needs from stakeholders such as customers/users. Users are the persons or organizations who will use the project's product, service, or result.<ref>Project Management Institute, (2013) ''A Guide to the Project Management Body of Knowledge (PMBOK® Guide)'', Fifth Edition</ref> To make sure the project is a success the needs of users must be thoroughly understood. As an example a consulting company can have the government as a client on a project, but the users of the project outcome are the citizens. No matter how succesful the government finds the project, it can all go to waste if the users are not satisfied. A tool for analysing these needs is the Value Proposition Canvas.		An important aspect of project management is stakeholder management which contains many different tools and theories. An essential part of this management is the alignment of stakeholder expectations with project deliverables. The reason behind a project initiation is a business case. These business cases are based on needs from stakeholders such as customers/users. Users are the persons or organizations who will use the project's product, service, or result.<ref>Project Management Institute, (2013) ''A Guide to the Project Management Body of Knowledge (PMBOK® Guide)'', Fifth Edition</ref> To make sure the project is a success the needs of users must be thoroughly understood. As an example a consulting company can have the government as a client on a project, but the users of the project outcome are the citizens. No matter how succesful the government finds the project, it can all go to waste if the users are not satisfied. A tool for analysing these needs is the Value Proposition Canvas.

Walther Emil Eriksen: /* Limitations */

2018-02-28T19:34:20Z

Limitations

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	== Limitations ==		== Limitations ==

	The main limitation of the Value Proposition Canvas is ~~how~~ managers ~~interpret~~ how it use ~~it in~~ their project or business. Listed below are some of the common mistakes and limitations related to the Value Canvas method according to Alexander Osterwalder.<ref>http://blog.strategyzer.com/posts/2015/2/19/5-common-mistakes-to-avoid-when-using-the-value-proposition-canvas [Accessed 02-16-2018]</ref>		The main limitation of the Value Proposition Canvas is managers interpretation of how to use the tool for their project or business. Listed below are some of the common mistakes and limitations related to the Value Canvas method according to Alexander Osterwalder.<ref>http://blog.strategyzer.com/posts/2015/2/19/5-common-mistakes-to-avoid-when-using-the-value-proposition-canvas [Accessed 02-16-2018]</ref>

	'''1. Not looking at the Value Proposition Canvas as two separate building blocks:''' It is important for the project manager to distinguish between the two sides of the value canvas, which many people can struggle with.		'''1. Not looking at the Value Proposition Canvas as two separate building blocks:''' It is important for the project manager to distinguish between the two sides of the value canvas, which many people can struggle with.

Walther Emil Eriksen: /* Value Proposition Canvas */

2018-02-28T19:32:56Z

Value Proposition Canvas

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	''Gains:'' Unlike pains, gains are not factors which are clear for the user. These are factors that the user is not necessarily expecting of a product or service, but are extra benefits supplied. Gains are not essential for project success, but rather an area where project managers can differentiate their project outcomes. In the South Sudan case the gains delivered came in form of education in hygiene, local training of staff and clean toilet facilities. Instead of only providing clean drinking water, the consulting company provided extra features, which the company differentiate itself in the highly competitive market of consultancy.		''Gains:'' Unlike pains, gains are not factors which are clear for the user. These are factors that the user is not necessarily expecting of a product or service, but are extra benefits supplied. Gains are not essential for project success, but rather an area where project managers can differentiate their project outcomes. In the South Sudan case the gains delivered came in form of education in hygiene, local training of staff and clean toilet facilities. Instead of only providing clean drinking water, the consulting company provided extra features, which the company differentiate itself in the highly competitive market of consultancy.

	'''Value proposition:''' ~~Going from~~ the customer segment side to the value proposition the focus changes from ''why'' to ''what'' and ''how''; what will the project deliver and how will the project deliverables satisfy customer needs?		'''Value proposition:''' From the customer segment side to the value proposition the focus changes from ''why'' to ''what'' and ''how''; what will the project deliver and how will the project deliverables satisfy customer needs?

	''Products & services:'' Outlines the products and services the project outcome is built around.		''Products & services:'' Outlines the products and services the project outcome is built around.

Walther Emil Eriksen: /* Business model relation */

2018-02-28T19:22:59Z

Business model relation

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	'''Internal:'''		'''Internal:'''
	*''Key Activities'': Activities which are essential for customer satisfaction.		*''Key Activities'': Activities which are essential for customer satisfaction.
	*''Key Partners'': Activities can be outsourced to partners who have the needed capabilities.		*''Key Partners'': Activities can be outsourced to or conducted in collaboration with partners who have the needed capabilities.
	*''Key Resources'': Resources required to run channels and activities.		*''Key Resources'': Resources required to run channels and activities.
	*''Cost Structure'': All previous elements result in costs for the organization.		*''Cost Structure'': All previous elements result in costs for the organization.

Walther Emil Eriksen: /* Business model relation */

2018-02-28T19:22:04Z

Business model relation

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	As projects can be seen as temporary organizations, the project manager can use a tool for business creation; ''The Business Model Canvas''. The business model describes how an organization creates, delivers and captures value. This relates to a project as the project manager has to make sure to deliver value to the customer while sticking to a budget.		As projects can be seen as temporary organizations, the project manager can use a tool for business creation; ''The Business Model Canvas''. The business model describes how an organization creates, delivers and captures value. This relates to a project as the project manager has to make sure to deliver value to the customer while sticking to a budget.
	The business model canvas consists of two sides; The ~~external~~ side and ~~internal~~ side. <ref name="Inno"/>		The business model canvas consists of two sides; The internal side and external side. <ref name="Inno"/>
	[[File:Business model canvas.PNG\|thumb\|Business Model Canvas, adopted from ''Business Model Generation''.<ref name="Bus"> Osterwalder, Alexander and Pigneur, Yves, (2010) ''Business Model Generation''.</ref>\|500px]]		[[File:Business model canvas.PNG\|thumb\|Business Model Canvas, adopted from ''Business Model Generation''.<ref name="Bus"> Osterwalder, Alexander and Pigneur, Yves, (2010) ''Business Model Generation''.</ref>\|500px]]

			'''Internal:'''
			*''Key Activities'': Activities which are essential for customer satisfaction.
			*''Key Partners'': Activities can be outsourced to partners who have the needed capabilities.
			*''Key Resources'': Resources required to run channels and activities.
			*''Cost Structure'': All previous elements result in costs for the organization.

	'''External:'''		'''External:'''
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	*''Value Proposition'': The value proposition is the reason why companies are succesful and why customers turn to their products. When a customer segment is chosen, an in-depth analysis of connecting the segment to the value proposition can be done using the value proposition canvas.		*''Value Proposition'': The value proposition is the reason why companies are succesful and why customers turn to their products. When a customer segment is chosen, an in-depth analysis of connecting the segment to the value proposition can be done using the value proposition canvas.

	~~'''Internal:'''~~
	*''Key Activities'': Activities which are essential for customer satisfaction.
	*''Key Partners'': Activities can be outsourced to partners who have the needed capabilities.
	*''Key Resources'': Resources required to run channels and activities.
	*''Cost Structure'': All previous elements result in costs for the organization.

Walther Emil Eriksen: /* Business model relation */

2018-02-28T19:20:11Z

Business model relation

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	*''Customer Relationships'': The organization will have different customer segments, and a different relationship with each of these. These relationships need to be established and maintained.		*''Customer Relationships'': The organization will have different customer segments, and a different relationship with each of these. These relationships need to be established and maintained.
	*''Channels'': To deliver value to the customers distribution, communication and sales channels need to be established.		*''Channels'': To deliver value to the customers distribution, communication and sales channels need to be established.
	*''Revenue Streams'': ~~How is~~ the organization going to earn revenue. The project manager needs to think about budget and cash flow throughout the project life cycle.		*''Revenue Streams'': Relates to how the organization is going to earn revenue. The project manager needs to think about budget and cash flow throughout the project life cycle.
	*''Customer Segment'': Before conducting the Value Proposition Canvas analysis, a decision has to be made on which customer segment to address. Customers/users can be part of a mass market, like in the South Sudan case where the users are all citizens in the country. They can also be part of a niche market where user needs and expectations can be very specific. Customer/user groups can consist of different segments, this is the case if:		*''Customer Segment'': Before conducting the Value Proposition Canvas analysis, a decision has to be made on which customer segment to address. Customers/users can be part of a mass market, like in the South Sudan case where the users are all citizens in the country. They can also be part of a niche market where user needs and expectations can be very specific. Customer/user groups can consist of different segments, this is the case if:

Walther Emil Eriksen: /* Business model relation */

2018-02-28T19:18:32Z

Business model relation

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	===Business model relation===		===Business model relation===

	As projects can be seen as temporary organizations, the project manager can use a tool for business creation; ''The Business Model Canvas''. The business model describes how an organization creates, delivers and captures value. This relates to a project ~~where~~ the project manager ~~must~~ make sure to deliver value to the customer while sticking to a budget.		As projects can be seen as temporary organizations, the project manager can use a tool for business creation; ''The Business Model Canvas''. The business model describes how an organization creates, delivers and captures value. This relates to a project as the project manager has to make sure to deliver value to the customer while sticking to a budget.
	The business model canvas consists of two sides; The external side and internal side. <ref name="Inno"/>		The business model canvas consists of two sides; The external side and internal side. <ref name="Inno"/>
	[[File:Business model canvas.PNG\|thumb\|Business Model Canvas, adopted from ''Business Model Generation''.<ref name="Bus"> Osterwalder, Alexander and Pigneur, Yves, (2010) ''Business Model Generation''.</ref>\|500px]]		[[File:Business model canvas.PNG\|thumb\|Business Model Canvas, adopted from ''Business Model Generation''.<ref name="Bus"> Osterwalder, Alexander and Pigneur, Yves, (2010) ''Business Model Generation''.</ref>\|500px]]

Walther Emil Eriksen: /* Business model relation */

2018-02-28T19:17:35Z

Business model relation

← Older revision		Revision as of 19:17, 28 February 2018
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	===Business model relation===		===Business model relation===

	As projects can be seen as temporary organizations, the project manager can use ~~an acknowledged~~ tool for business ~~creating~~; ''The Business Model Canvas''. The business model describes how an organization creates, delivers and captures value. This relates to a project where the project manager must make sure to deliver value to the customer while sticking to a budget.		As projects can be seen as temporary organizations, the project manager can use a tool for business creation; ''The Business Model Canvas''. The business model describes how an organization creates, delivers and captures value. This relates to a project where the project manager must make sure to deliver value to the customer while sticking to a budget.
	The business model canvas consists of two sides; The external side and internal side. <ref name="Inno"/>		The business model canvas consists of two sides; The external side and internal side. <ref name="Inno"/>
	[[File:Business model canvas.PNG\|thumb\|Business Model Canvas, adopted from ''Business Model Generation''.<ref name="Bus"> Osterwalder, Alexander and Pigneur, Yves, (2010) ''Business Model Generation''.</ref>\|500px]]		[[File:Business model canvas.PNG\|thumb\|Business Model Canvas, adopted from ''Business Model Generation''.<ref name="Bus"> Osterwalder, Alexander and Pigneur, Yves, (2010) ''Business Model Generation''.</ref>\|500px]]

Walther Emil Eriksen: /* Big idea & Project Management relation */

2018-02-28T19:15:58Z

Big idea & Project Management relation

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	The Value Proposition Canvas model is a great tool for the project manager in the initial phase of a project life cycle where the project's stakeholders are mapped. Since the expectations of stakeholder groups will differ, it is not unusual for conflict to exist regarding the importance or desirability of aspects of strategy. <ref> Johnson, Gerry. (2015) ''Fundamentals of Strategy'', Third Edition</ref> An important step is therefore the identification of the relevant stakeholders and their expectations. Two main stakeholders are always the users of project outcomes and buyers/customers the project manager works with. It is important to distinguish between the two types of stakeholders, and even to differentiate within one type of stakeholder. If there are relevant differences between different user groups it is important to address them separately because they may have different needs, aspirations, abilities or expectations.<ref name="Inno">den Ouden, E. (2012) ''Innovation Design''. Springer</ref> The Value Proposition Canvas can help the project manager in understanding these different needs and expectations, and how the project can satisfy them. The canvas will help creating a strategic alignment of value between users and the project outcomes. The finalized value proposition can be used when conducting a business model for the whole project and can lay the groundwork for value creation.		The Value Proposition Canvas model is a great tool for the project manager in the initial phase of a project life cycle where the project's stakeholders are mapped. Since the expectations of stakeholder groups will differ, it is not unusual for conflict to exist regarding the importance or desirability of aspects of strategy. <ref> Johnson, Gerry. (2015) ''Fundamentals of Strategy'', Third Edition</ref> An important step is therefore the identification of the relevant stakeholders and their expectations. Two main stakeholders are always the users of project outcomes and buyers/customers the project manager works with. It is important to distinguish between the two types of stakeholders, and even to differentiate within one type of stakeholder. If there are relevant differences between different user groups it is important to address them separately because they may have different needs, aspirations, abilities or expectations.<ref name="Inno">den Ouden, E. (2012) ''Innovation Design''. Springer</ref> The Value Proposition Canvas can help the project manager in understanding these different needs and expectations, and how the project can satisfy them. The canvas will help creating a strategic alignment of value between users and the project outcomes. The finalized value proposition can be used when conducting a business model for the whole project and can lay the groundwork for value creation.

	To demonstrate the method used in a case study, this article will use an example from a consultancy firm called Niras conducting a project for the Government of South Sudan. The project has a large scope and spans over several years and is still ongoing <ref name="Niras">https://www.niras.com/development-consulting/projects/water-for-eastern-equatoria-prowasssn-ees</ref>. The main goal is the improvement of water resource management and sanitation, to bring clean drinking water to the citizens of South Sudan. The company has helped over 135.000 citizens getting access to clean water. This is a result of great initial analysis of the situation, assessing all the relevant stakeholders and working with local security and institutions to realize value to the users. The project has run into several problems in regards to the turmoil in the country and problems with lack of infrastructure. ~~The~~ project manager has ~~however~~ been succesful in creating great value for the citizens as well as training the Government officials to make a sustainable long term solution.		To demonstrate the method used in a case study, this article will use an example from a consultancy firm called Niras conducting a project for the Government of South Sudan. The project has a large scope and spans over several years and is still ongoing <ref name="Niras">https://www.niras.com/development-consulting/projects/water-for-eastern-equatoria-prowasssn-ees</ref>. The main goal is the improvement of water resource management and sanitation, to bring clean drinking water to the citizens of South Sudan. The company has helped over 135.000 citizens getting access to clean water. This is a result of great initial analysis of the situation, assessing all the relevant stakeholders and working with local security and institutions to realize value to the users. The project has run into several problems in regards to the turmoil in the country and problems with lack of infrastructure. However, the project manager has been succesful in creating great value for the citizens as well as training the Government officials to make a sustainable long term solution.

	== Application ==		== Application ==

Walther Emil Eriksen: /* Abstract */

2018-02-28T19:11:58Z

Abstract

← Older revision		Revision as of 19:11, 28 February 2018
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	==Abstract==		==Abstract==
	An important aspect of project management is stakeholder management which contains many different tools and theories. An essential part of this management is the alignment of stakeholder expectations with project deliverables. The reason ~~for~~ a project initiation is a business case. These business cases are based on needs from stakeholders such as customers/users. Users are the persons or organizations who will use the project's product, service, or result.<ref>Project Management Institute, (2013) ''A Guide to the Project Management Body of Knowledge (PMBOK® Guide)'', Fifth Edition</ref> To make sure the project is a success the needs of users must be thoroughly understood. As an example a consulting company can have the government as a client on a project, but the users of the project outcome are the citizens. No matter how succesful the government finds the project, it can all go to waste if the users are not satisfied. A tool for analysing these needs is the Value Proposition Canvas.		An important aspect of project management is stakeholder management which contains many different tools and theories. An essential part of this management is the alignment of stakeholder expectations with project deliverables. The reason behind a project initiation is a business case. These business cases are based on needs from stakeholders such as customers/users. Users are the persons or organizations who will use the project's product, service, or result.<ref>Project Management Institute, (2013) ''A Guide to the Project Management Body of Knowledge (PMBOK® Guide)'', Fifth Edition</ref> To make sure the project is a success the needs of users must be thoroughly understood. As an example a consulting company can have the government as a client on a project, but the users of the project outcome are the citizens. No matter how succesful the government finds the project, it can all go to waste if the users are not satisfied. A tool for analysing these needs is the Value Proposition Canvas.
	The canvas assesses two different aspects:		The canvas assesses two different aspects: