According to one executive, most people don’t quite understand value engineering. In an interview for theCUBE at the recently concluded Inforum conference, Infor, Inc. Chief Solutions Officer & SVP of Value Engineering Riaz Raihan explained the concepts behind value engineering, and how customers can use it to ensure true business value from their software investments.

Getting Started

When getting customers started with value engineering, Infor conducts a value discovery. This means that the company spends time with customers on site and at corporate as well documents their strategies to determine what metrics they want to move. Infor then loads all of this gathered information into its Infor Value Manager (IVM), a real-time tool that gives customers the ability to figure out how changes made to the business impact their income statement and balance sheet. “You’re not just getting a PowerPoint deck that’s static and fixed in time. You’re actually getting something that’s dynamic and evolves with time,” Raihan added.

Infor’s Three Step Process

Raihan stated that Infor takes a three step process to measuring value. The first step is figuring out key performance indicators (KPIs) and metrics that matter to a company in that industry. Infor establishes what a company’s improvement baseline is by doing baselines across different metrics. For companies with more than one business, Infor does baseline metrics across businesses and departments. Another methodology that Infor uses is called benchmarking, in which the company works with the American Productivity & Quality Center (APQC) to create industry benchmarks and metrics that lets customers look at themselves objectively.

The next step is determining how the needle can be moved on each of those indicators. Finally, Infor builds out a roadmap that allows customers to implement the software, then measure how much the needle moved on the KPIs.

When Things Go Wrong

Raihan admitted that things go wrong all the time, but that this is where project management comes in. If customers continue on a wrong path and don’t make the kind of changes set forth from Infor’s value engineering strategy, then they’re not going to get the kind of results they expect or deserve. Value management, a process that offers more than analytics, details why something happened and what’s likely to happen. “We want to be able to give customers foresight, not just hindsight,” said Raihan.

The Results

As opposed to a deck with a static Excel sheet, value engineering offers customers a robust analysis that gives a clear understanding of business issues and recommends how those issues should be addressed – whether it be through a process change, technology change or combination of the two. Customers get a quantified benefit and business case that shows, in dollars and cents, the value of solving business challenges.

“A lot of customers make investments in software. They expect it to solve real world business problems for them, and value engineering makes sure that that actually happens,” Raihan stated.

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