Lesson 4 of 7
Value realization
8 min
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A business case is a promise. Value realization is keeping score on it: comparing what the TCoE delivered with what the case said it would, line by line, in money and in capacity, with honest attribution. Done well, it earns the next funding tranche. Done badly, by claiming every good number as the TCoE's work, it destroys trust the first time finance checks.
The benefits register
The register lists every benefit lever from the business case with its baseline, the expected value for the period, the measured value, how much of the change is attributed to the TCoE, the evidence and the owner. Contoso's levers come straight from sap-tcoe-401: regression effort, enhancement testing, notes and patches, mobilization avoided, internal failure and external failure, all at the agreed blended rate of $95 per hour.
| Lever | Baseline (annual) | Year 1 expected (half of steady state) | Year 1 measured | Claimed for the TCoE |
|---|---|---|---|---|
| Regression effort | 2 events × 1,400 h | $66,500 | 1,050 h and 700 h: 1,050 h saved, $99,750 | $99,750 |
| Enhancement testing | 120 changes × 30 h | $45,600 | 118 changes × 26 h: 472 h saved, $44,840 | $44,840 |
| Notes and patches | 12 checks × 60 h | $14,250 | 12 checks × 45 h: 180 h saved, $17,100 | $17,100 |
| Mobilization avoided | 600 h | $28,500 | 150 h in event 1, none in event 2: $42,750 | $42,750 |
| Internal failure | 1,920 h | $24,700 | 590 defects × 2.6 h = 1,534 h: $36,670 | $36,670 |
| External failure | $342,000 | $94,050 | $144,000: down $198,000 | $119,700 (conservative 35%) |
| Gross benefit | $273,600 | $439,110 | $360,810 |
Contoso's benefits register at the end of year 1. Baseline and expected figures come from sap-tcoe-401; measured figures are illustrative course data.
Attribution: claim what you can defend
The largest line is external failure: escaped-defect costs fell from $342,000 to $144,000. Contoso had no severity 1 escape all year, against one in the baseline. But some of that fall would have happened anyway. The baseline period was the six months after hypercare, when a newly converted system always produces more incidents; the second year of any SAP system is calmer. Priya therefore claimed only the conservative case from the business case (35%, or $119,700) and showed the remaining $78,300 as "improvement not attributed." She explained that root-cause reviews of the year's 40 escapes would let her claim more next year where the evidence shows a TCoE mechanism, such as a scenario added to the regression pack after an earlier escape.
Money, capacity and the net position
Separate cash from capacity. Fewer regression hours by Contoso's own staff are real value, but they reduce cash cost only if someone is not hired, a contractor is released or the time goes to other funded work. The register labels such lines "capacity released" and shows where the capacity went: at Contoso, the hours freed in the TCoE went into data recipes for Wave 2 and release assessments. Key-user hours in close weeks fell from 380 to 64 a year, which Dan values more than the dollars because his close calendar stopped slipping.
| Year 1 | Business case (expected) | Actual (claimed) |
|---|---|---|
| One-time investment | −$229,000 | −$229,000 |
| Gross benefit | $273,600 | $360,810 |
| Recurring cost | −$296,400 | −$296,400 |
| Net for the year | −$251,800 | −$164,590 |
Year 1 against the business case. Contoso is about $87,000 ahead of plan on conservative claims, and still in the investment phase.
- Month 0Baseline frozenRegister created from the business case; owners named
- Each releaseLever measuredHours and escapes recorded against the release event
- Each quarterRegister reviewedQuality council sees expected versus measured and attribution
- Month 12Annual value reviewFinance validates claims; next tranche decided
- Month 24Steady state checkExpected case versus actual; targets reset
What would you do?
A process owner says the TCoE should claim the whole $198,000 fall in escaped-defect costs, "because nobody else will take credit for it." What should Priya do?
- Keep a benefits register: lever, baseline, expected, measured, claimed, evidence and owner.
- Claim only what you can attribute to a TCoE mechanism; show other improvement as not attributed.
- Separate cash savings from capacity released, and say where released capacity went.
- Compare the net position with the business case each year, with finance validating the claims.
Check your understanding · not graded
Lesson check
1. Why did Priya claim only part of the fall in escaped-defect costs?
2. What does "capacity released" mean in a benefits register?
3. What is the purpose of a benefit dependency map?
4. Regression hours by Contoso's own staff fell, but nobody was released and no hire was avoided. How should the register show it?