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Measuring business value in Power Platform is an important aspect of ensuring success and return on investment. Power Platform provides a low-code or 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.
Why measure value?
Why does value measurement matter? It's the driving force behind your technology investments, ensuring that every initiative is purposeful, aligned with strategic goals, and informed by data.
- Driving shared purpose: Value measurement provides a clear purpose by answering the fundamental question, Why are we doing this? It gives meaning to your technology investments, ensuring that projects have defined and meaningful goals. This clarity transforms uncertainty about what success looks like into a clear objective that guides actions, prioritizes features, and keeps everyone aligned.
- Strategic alignment: Value measurement ensures that Power Platform initiatives are aligned with the broader strategic goals of the business. This alignment moves technology initiatives from being isolated efforts to directly supporting what the business has identified as important, ensuring that every project contributes to the overall mission.
- Informed decision-making: Measuring business value equips you with the necessary information to make informed decisions about technology investments. Business value is not just a metric; it's a strategic compass that aligns with organizational goals, optimizes resource allocation, and empowers data-driven decisions. This shift moves decision-making from being based on intuition or subjective opinions to relying on concrete data regarding performance, satisfaction, and cost-effectiveness.
The business value of the platform is often seen through two lenses: IT benefits, and the value of the solutions that run on it. From an IT perspective, core benefits include the reduction of development and maintenance costs, of non-Microsoft license spend, and of technical debt.
Power Platform solutions typically help improve one or more business value drivers, such as:
- Performance improvement: Solutions 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: Solutions 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: Solutions that help organizations mitigate risks by improving data security, ensuring compliance with regulatory requirements, and reducing errors such as process outages and data breaches.
- Business transformation: Solutions that help organizations transform their operations and business models. These solutions might include enabling businesses to adapt to changing market conditions, introduce new products or services, or replace aging legacy systems.
Tangible and intangible value
Understanding tangible and intangible value is important to fully appreciate the benefits of investments.
Tangible value refers to measurable outcomes such as cost savings, increased productivity, and faster time-to-market for solutions. These outcomes are often quantified through metrics and financial reports and provide clear evidence of the platform's impact.
Intangible value encompasses benefits that aren't easily measured but are equally important, such as improved employee satisfaction, enhanced collaboration, and a culture of innovation.
Recognizing both types of value allows organizations to make informed decisions, justify investments, and foster a holistic approach to digital transformation.
Here are some examples of tangible and intangible value:
| Tangible value | Intangible value |
|---|---|
| Revenue growth ($) | Risk mitigation and compliance |
| Reduced maintenance cost ($) | Fewer disruptions |
| Reduced paperwork and admin ($) | Improved employee experience |
| Resource optimization (%) | Improved data security |
Consider how you can measure and report both tangible and intangible value. Refer to the example measurements and questions to guide your assessment.
Performance improvements and direct or indirect cost savings
You can measure how Power Platform solutions improve existing processes 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. Calculate savings based on 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 is a good way to measure performance improvement. |
| 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 reduction, 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
You can measure the impact of a new solution on mitigating risk in several ways.
| Measure | Description |
|---|---|
| Risk reduction | Identify the risks that the solution 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 solution is designed to improve compliance, measure the impact by assessing the compliance rate before and after implementation. Identify the regulations or standards that the solution is designed to comply with and track the compliance rate over time. |
| Incident response time | 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 became 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 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 | Assess the productivity of employees before and after implementation by comparing the output achieved or by tracking the time taken to complete a task. |
| Total cost of ownership (TCO) | For an on-premises or in-house system, assess the total cost of ownership. This assessment includes all the costs associated with owning, operating, and maintaining the system over its lifetime. For example, 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 | Use surveys, interviews, focus groups, and analytics to measure the success of a new system or process. A combination of these methods will provide 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 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?
Other 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. |
|
Align to organization KPIs and OKRs
Align the business value of Power Platform solutions to the organization's key performance indicators (KPIs), objectives, and key results (OKRs) to maximize the impact of the solutions.
Aligning Power Platform solutions to KPIs and OKRs ensures that organizations address the most critical business needs and drive significant impact. This strategy helps senior leaders and decision makers see Power Platform solutions as valuable investments, making it easier to approve resource allocation. Various tools and calculators are available to help, including the Business value toolkit, Innovation Backlog, and the Automation Project app.
How to communicate business value
Different audiences have varying perspectives on business value, making it important to tailor your communication to each group. For example:
- IT department: Focus on cybersecurity, scalability, and technology adoption.
- Finance department: Highlight cost savings, financial ROI, and investment justification.
- Marketing department: Emphasize customer engagement and brand reputation.
- Operations department: Stress process efficiency, productivity, and reduced downtime.
Audience analysis
While communicating value is important, tailoring the message to the audience is even more important. Analyze your audience by understanding who the key stakeholders are, their roles and responsibilities, and their preferred methods of receiving information. Targeting your message ensures effective communication and creates a strong connection with your audience.
Take this approach:
- Audience: Identify the stakeholders involved.
- Roles and responsibilities: Determine what information is relevant to their role.
- Communication preference: Choose the communication channels that will best reach them.
- Interests and concerns: Align the message with their interests to encourage buy-in.
- Knowledge level: Adjust the level of technical detail to match their understanding.
By considering these factors, you achieve improved engagement, increased credibility, stronger connections, and greater buy-in and support from your stakeholders.
What framework can we use for measuring value?
To build a robust business value measurement framework for Power Platform, follow this structured approach to ensure alignment with your organization's objectives and goals. Here are the key steps:
- Centralize objectives and goals: Start by clearly defining the objectives and goals for your organization, departments, business units, or functions. Understand what each group is trying to achieve. For example, a goal might be to improve customer satisfaction or increase operational efficiency.
- Identify relevant metrics: Choose metrics that directly align with the objectives you've outlined. These metrics will serve as benchmarks for measuring progress. Consider using metrics such as time, rate, scale, number, or percentage. For instance, you might set a goal to "Reduce health and safety incidents by 50% over the next twelve months."
- Data collection and analysis: Data is the cornerstone of measurement. Collect relevant data to accurately measure the selected metrics. Then, analyze this data to derive insights that inform decision-making, demonstrate return on investment (ROI), and accurately measure the value of Power Platform solutions. This step involves using tools like Power BI for data visualization and analysis.
- Reporting and presentation: Communicate your findings effectively. Develop clear and concise reports that highlight key insights and the impact of Power Platform solutions. Ensure that the reports are tailored to the needs of your audience, whether executives, managers, or team members. Use visual aids and summaries to make the information accessible and engaging.
Tip
The Business value toolkit is a feature of the Center of Excellence starter kit that provides a comprehensive framework to capture and communicate the value of Power Platform solutions effectively. The toolkit allows you to specify objectives and goals, and guides app owners through a structured storytelling process to analyze the impact of their solution on organizational strategic objective.
Summary
Measuring the business value of Power Platform solutions is important because it provides insights into how these solutions contribute to the overall success of the organization. By measuring the business value, organizations determine how their investment in Power Platform yields results, contributes to the success of the organization's digital transformation strategy, and identifies opportunities to improve processes, automate tasks, and optimize resources.
This guidance helps 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 understand user needs, identify common use cases, evaluate existing solutions, and demonstrate the return on investment to stakeholders.
Next steps
This article focuses on the value of measuring and communicating the business value of Power Platform solutions. Next, you'll want to adopt qualitative and quantitative methods to ensure a comprehensive evaluation. Learn more in Methods and tools to measure business value.
After you've measured the business value of your Power Platform solutions, take a step back and consider the bigger picture of your adoption journey with value plays. Value plays are strategic initiatives designed to maximize the value delivered by Power Platform.
Obtaining executive sponsor and executive leadership buy-in is critical for successful Power Platform adoption, especially in large organizations. Learn how to get an executive leader to sponsor your project.