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Value Measuring Methodology (VMM)

Value Measuring Methodology (VMM) is a toolkit of techniques that enables organizations to define, capture, and measure both quantitative and qualitative value associated with their IT investments. This methodology is based on business and economic analysis theories and best practices from both the public and private sectors. Booz Allen Hamilton first articulated VMM in 2002 for the US Social Security Administration as part of an electronic services project.

VMM aims to help organizations fully account for costs, identify and consider risks, and define, capture, and measure value associated with electronic services that are not accounted for in traditional return on investment (ROI) calculations. The methodology consists of four steps that must be completed sequentially to ensure complete documentation and objectivity.

The first step is to develop a decision framework, which is the cornerstone of VMM. The decision framework comprises three structures: value, cost, and risk, and provides decision-makers with a blueprint for defining, analyzing, and comparing alternatives.

The second step is to define alternatives with estimates documenting value, cost, risk, economic factors, and assumptions. The output of this step is used in the third step, where the alternatives are analyzed, and a comparison of cost, value, and risk is made.

The fourth and final step of VMM primarily focuses on effective communication. The output of this step is documentation, insight, and support for improving decision-making and performance measurement through Lessons Learned.

Each step is necessary to ensure that qualitative and quantitative information is captured and the methodology is used objectively. The input of the methodology is the requirements, and the output of the first step is the decision framework. The output of the second step is alternatives with estimates documenting value, cost, risk, economic factors, and assumptions. The output of the third step compares cost, value, and risk. In contrast, the outputs of the fourth step are documentation, insight, and support for improving decision-making and performance measurement through Lessons Learned.

The Value Measuring Methodology (VMM) category in our CIO Reference Library is a curated collection of resources, articles, and insights focused on providing IT executives and other professionals with a comprehensive understanding of VMM and its application in defining, capturing, and measuring the value associated with IT investments.

The Value Measuring Methodology is a proven toolkit of existing techniques to define, capture, and measure quantitative and qualitative value associated with information technology (IT) investments. It is based on public and private sector business and economic analysis theories and best practices.

This category covers a wide range of topics related to VMM, including:

  • Overview of VMM: This includes an introduction to the VMM framework, its history, and its application in defining, capturing, and measuring the value associated with IT investments.
  • VMM methodology: This includes an overview of the four steps of the VMM methodology, which provides a structured approach to defining, capturing, and measuring the value associated with IT investments.
  • VMM decision framework: This includes an overview of the cornerstone of the VMM, the decision framework. Comprised of three structures: value, cost, and risk, the framework provides decision-makers with a blueprint for defining, analyzing, and comparing alternatives.
  • VMM alternatives: This includes an overview of how to define alternatives with estimates documenting value, cost, risk, economic factors, and assumptions.
  • VMM analysis: This includes an overview of analyzing alternatives and comparing costs, value, and risk.
  • VMM documentation and communication: This includes an overview of the importance of effective communication and documentation and how it can support improving decision-making and performance measurement through Lessons Learned.

By exploring the VMM category, IT executives and other professionals can comprehensively understand the framework and its application in defining, capturing, and measuring the value associated with IT investments. This knowledge can help organizations to make more informed decisions about their investments, improve their alignment with business goals and objectives, and ultimately create more value for their stakeholders.

A Methodology for Measuring the Value of E-Services

This report introduces the Value Measuring Methodology (VMM), a flexible framework for a multi-perspective assessment of eservices that is responsive to the e-Government environment, builds upon existing legislative guidance and executive direction, and incorporates proven analytical approaches.

Introduction to Value Measuring Methodology (VMM)

Explore the essence of the Value Measuring Methodology (VMM), a pivotal tool for IT professionals. This guide delves into the VMM’s framework, its historical evolution, and the myriad benefits it offers for optimizing IT value.

IT Value – Cost Estimating Guide

This cost estimation guide provides invaluable information on cost estimation – throughout a project’s lifecycle and its connection to other levers of value creation such as risk.

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