There is an imbalance in business. Teams and companies are asked to think “long-term” but are evaluated on weekly, monthly, and quarterly performance.
This imbalance has made Time To Value (TTV) a crucial factor when buying technology. In this post, we’ll explore what time to value is, why it matters, and understand its impact on project outcomes.
First, so that we are on the same page (digitally)… What is Time To Value?
Time To Value refers to the amount of time it takes for a product or service to deliver tangible benefits to an organization
Imagine this. It’s July, you’re into the second half of the year. NPS and CSAT are lagging 20% behind targets, and they aren’t hurting profits yet, but you know reduced referrals and higher customer churn is coming. You don’t want this problem to be “the wound that gets infected”, so you do some diagnosing. You discover that the phone queue resembles morning traffic in New York… slow and long (85% of customers feel this way, so you’re not alone).
You think you know why this is happening, but you chat with the operations team to confirm. Their response? The recruiting team can’t find enough people to staff the contact center. Agent attrition is at 50%, so proficiency levels are low. To top it off, you’re at the start of the busy season. Ouch.
You need a solution, and the team settles on a voice assistant. The next 3-months are spent evaluating vendors, internally selling, and getting the right people on board to make this a success. Your team is aligned, IT loves the vendor, and the executives can’t wait to see the results. Now everyone is looking at you. It’s time to deliver.
Note: this is a huge simplification. We know it’s 10x more challenging to get an internal project to the final stages.
This brings us to the next point. Why does Time To Value matter?
Reducing the risk of failure
It’s now Wednesday morning on the day you’re going live. Testing went smoothly, but you know that implementing technology and innovation projects can be risky. Kmart, a large U.S. retailer, and Auto Windscreens, a major U.K. automobile glass company, were driven into bankruptcy partly due to their inability to manage critical technology projects. You really don’t want this to be you.
According to a study conducted by McKinsey, the challenge is that approximately 45% of technology projects experience cost overruns of 200%, and 56% fall behind schedule. These delays and cost overruns can often be attributed a long time to value. Realizing these issues earlier could have mitigated the risks associated with project failure, reducing uncertainty and hurting stakeholder confidence.
In contrast, McKinsey found that top-performing companies begin capturing substantial value within the first 12 months of projects. This demonstrates the direct relationship between time to value and project performance.
The takeaway? Projects with a shorter time to value have higher success rates.
Delays in realizing value not only increase the risk of failure, but there is an opportunity cost for the time that the value remains unrealized. You don’t want to be playing a broken slot machine.
Delayed Gains, Wasted Opportunity
Every day that value from a project isn’t realized, there is an opportunity cost. The quicker a project creates value, the more confidence the team has, and the sooner returns can be reinvested into new initiatives, creating a virtuous cycle of improvement.
The two fictional scenarios below make it easy to see how delayed time to value can never be recovered. In scenario 1, the benefit can be seen in month 3, while in scenario 2, the benefits only become apparent in month 6.[wptb id="4786" not found ]
What could you do with an additional $60,000?
As we’ve seen, Time to Value plays a pivotal role in reducing risk, increasing project success rates, and enabling businesses to seize new opportunities. Efficient implementation and early value realization are crucial to maximizing the benefits of technology investments and ensuring long-term success.