The era of Return on Value (ROV)

ROI is dead? Long live to ROI…!

Most of professionals working in IT have been largely exposed to the concept of ROI,  a fair way to establish a relationship of trust between a supplier and a customer.

The advantage of the ROI metric is that it enables both parties engaged in a medium or long term assignment to have the same vision and commitment for the future: the supplier will provide its efforts and resources to build the project and the customer will keep the project operational in a way that will deliver business results.

The drawback of the ROI as a concept is that it normally involves significant and complex changes and it relies on a number of circumstances in order for the promised outcome to occur. Due to the entanglement that an ROI-based project implies for the resources involved between themselves and with several external factors, the ROI can end up to be significantly different from what expected.

Nevertheless we all will continue to use ROI when talking about projects and programs that last several months or years. This notwithstanding, we have been missing for a while a definition of the value involved in recurring services, such as Managed Services.

ROV kicks in…!

And here is where the concept of Return on Value (or ROV) kicks in…  Return on Value is a new simpler way to define an agreement between a supplier and a customer based on a number of circumstances.

  • The Return must be immediate
  • It must normally engage limited promises (i.e.: instead of “reducing costs by 30%” ROV could be based on “providing an immediate visibility of your costs”)
  • It should not require any other external circumstance to occur in order to deliver the promise, since it is fully based on supplier’s capacity.

Why is the ROV concept so important in modern IT

We are applying the concept of Return on Value in our daily life several times, especially when we compare an online service with a similar one (is Spotify any better than Google Music? If yes, why? What is the additional return I get for a similar amount of money?).

Usage-ready offers are meant to provide an immediate value to customers with their ability to deliver benefits  based on ready-to-use technology. These are the typical cases wher the concept of ROV is applicable, for example in comparing two different usage-ready offers dedicated to the same target need.

Contact Lemon Operations to understand how to use the concept of ROV in your business.

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How to become a Super-Hero with usage-ready offers

Why building “usage-ready” offers

Building “usage-ready”offers is becoming critical in order to cope with and exploit the ever changing landscape of the IT Industry nowadays.  IT Companies all over the world can introduce a minimal business innovation in order to increase the velocity of their business with the help of Lemon Operations.

Usage-ready offers, once introduced, can help any IT Company to exploit the right synergy between “Demand-based” and “Project-based” strategies as well as to provide other benefits such as opening new markets, introducing a new stream of business, ensuring long-term growth of company value.

Which are the key elements of success of “usage-ready” offers

Many IT Companies are now building “usage-ready” offers and managed services, in order to modernize their offering portfolio and target markets beyond their territory. Not all usage-ready offers are all the same, of course, and Lemon Operations have defined a number of criteria that will surely drive your offer to the level of excellence your company needs:

  1. Comprehensive solution – a “usage-ready” offer should encompass a comprehensive solution including devices, applications, IP, services to address a recurring business usage
  2. Value Pricing – setting the price as a subset of the value the offer is generating to the customer rather than as the addition of cost + margin
  3. Flat Rating – recurring subscription with a user/usage flat rate, all included with little to no upfront cost
  4. Industrialization – operational framework to deliver the exact same offer to the largest number of customers
  5. Business Automation – online customer experience from prospection to acquisition, account management and post sales

What you can do in order to become a Super-Hero

Drop an email to info@lemon-operations.com in order to understand how other IT Conpanies have become IT Super-Heroes before you…!

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How to build industrialized but personalized offers

When building “usage-ready” offers IT Companies should aim at creating a product concept that could at the same time drive customer demand toward a very industrialized framework while leaving space for some personalized options.

How is this feasible?

First of all, your usage-ready offer should be compliant with what Lemon Operations defines as the 5 Top Practices to become a Super-Hero. This will provide your Company with the industrialized framework you need to collect orders from customers within your target group, no matter where they are and no matter if they speak with one of your salesmen or not.

Once your offer is “usage-ready” you will need to ensure that main variances within your target group of potential customers are matched by offer options, in order to give the same freedom to use your offer to any member of your target audience.

Want to know how to do so? Drop an email to info@lemon-operations.com and we will answer your questions…

 

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How business automation is changing the IT world

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