For cutting-edge projects, the Proof of Value phase of a project is incredibly important and an almost perfect predictor of a project’s success. Dave Hamilton, our Senior Data Engineer, recently conducted a Proof of Value (PoV) with large Queensland energy provider, Energy Queensland. From this and other Proof of Value projects, he can share several insights.
What is a Proof of Value?
The application of data science is generally the investigation and testing of a hypotheses. However, the same considerations apply to all platform and data investments. Will technology and business processes align to produce desired outcomes based on the available data? As with any testing, the identification of value is not always guaranteed. This leads to a risk that, if testing is left open-ended, projects may result in costly, resource consuming, and never-ending analysis.
A Proof of Value enables an organisation to assess the business value and technology during a short, sustained period. With clearly defined timeframes and success criteria, the organisation is able to invest time and money with confidence that it is not being wasted, while allowing for the exploratory nature of data science.
A Proof of Value uses time-box efforts in proving a scenario, optimally done in 4 to 6 weeks. It allows organisations to assess data readiness and machine learning feasibility, and identify the value in a project and provide recommendations on the implementation of repeatable models.
Proof of Value is a very productive phase. We can focus on the right things before diving straight into the technology. During this time, we really engage with the business stakeholders to define and understand their needs and definition of success. This is key, as it helps to hone requirements for the subsequent delivery phase
A Proof of Value is ultimately a shared journey and enables everyone to have broader, more strategic discussions with people and teams from across the business. It is important to include as many teams as possible, this way different stakeholders understand and can help prove the value of the solution.
With Energy Queensland, we included three key business teams – Network Forecasting, Enterprise Analytics and Network Pricing. These teams helped to define use cases around efficiency and innovation which could all leverage aspects of the new solution. This also helped to frame business value in context for communication to decisionmakers. Not only did the Proof of Value provide tangible use cases with business value, it could be explained in the context of a roadmap which included efficiency gains of existing processes initially, while unlocking innovation made possible by the solution. Examples include reducing time to answer ad-hoc data questions from external stakeholders, to being able to explore new pricing metrics, given the flexibility of the new solution.
Proof of Value vs Proof of Concept
Where a Proof of Concept (PoC) focuses on proving that a solution works and the technology required to create the change, it fails to address critical success factors.
By employing a Proof of Value phase, it is possible to communicate both the technical aspects of the solution derived from a Proof of Concept, and the expected business value of a solution.
A Proof of Value documents and determines the solution, the expected return and anticipated business value of the solution, the drivers required to realise business value from the solution (from changes in business processes, people, and technology), and the practical application of the solution, while proving that the solution does indeed work.
The Benefits of a Good Proof of Value
- Refining project requirements: For example, a working prototype can surface new requirements worth prioritising
In Energy Queensland’s case, this involved narrowing down key master data requirements required to achieve the initial use-case, without needing to lift and shift everything. - Refining the solution design
Early discussions with stakeholders gives a good insight into ways of working within the enterprise. This helps to flesh out what is needed in a full design phase to meet requirements around taxonomy/data governance and access control. This allows pre-thinking about how to marry these requirements with solution design, without holding up proving out business value. - Proving the technology
This allows an objective comparison with existing platforms or solutions. For Energy Queensland, this meant being able to see how the performance scales with data growth and also indicative costs. - Identifying improvements to the design to include in the full build
For example, identifying data quality issues based on Proof of Value datasets and building validations into the delivery phase. - Identifying the next steps with all the key stakeholders
In Energy Queensland’s case, this meant the delivery project team could hit the ground running and continue to build on existing stakeholder relationships.
“The team at Energy Queensland helped to streamline the technical and data prerequisites. They put us in touch with the right stakeholders up front. They had identified key stakeholders who were the ultimate users of the platform and focussed on specific aspects of each team’s workflows and where the nascent solution could help.”
Dave Hamilton, Senior Data Engineer
Proof of Value Best Practice Engagement
Best practice engagement with a client during this phase enables Ignite to:
- Define criteria for success: It is important to understand the value chain for use-cases which make it to the delivery phase. For Energy Queensland, this meant meeting with eventual end users of the platform and understanding their business workflows. This also gave good insight into the relative importance of performance and data quality for different use-cases. A Proof of Value allows an intimate understanding of what will make a solution usable for each use-case, and any risks to adoption.
- Build a cross business team culture through regular catch ups that enable frequent iterations and a more incremental process: This helps to ensure the right things are prioritised and progressed at the right time. Multiple short catch-ups a week initially allowed Ignite and Energy Queensland to build a shared view of technical tasks and (sometimes hidden) dependencies to complete the Proof of Value. This also helps to inform project timelines and sequencing for eventual delivery. The project plan for delivery can be much more realistic with the benefit of Proof of Value
- Working as a team, we can work with the client to remove any blockers to the process: For example, resolving potential blockers around data access needed to prove business value or technical performance.
- Build a more tangible and accurate business case with the outputs from Proof of Value: This is important for getting a larger project approved and is helped by having tangible learnings from the Proof of Value. For example, being able to replicate (and improve) an existing report in a new platform. This also means there are more internal advocates for the project internally who can help to uplift the business case.
- Engage more stakeholders to vouch for the project, as they get to use the platform, see it work and understand the benefits it can provide: This helps with eventual change management as part of the delivery phase, as stakeholders have a deeper experience with the solution. For Energy Queensland, this involved members of the analytics team being able to explore features in the Proof of Value platform. This aligns to a show-don’t-tell approach.
- Gather both technical and data learnings that enable the main project to run more smoothly: This is important to understand potential sources of complexity and which business requirements they relate to – for example, the need to design to meet data governance standards. This gives stakeholders an informed view of eventual delivery timeframes and allows for priorities to be re-validated before delivery.
- Identify key project risks and opportunities to enhance data: This is important so limitations or new opportunities identified based on experience can be carried into the delivery phase. An example was being able to build a generic solution to cope with upcoming market changes. The Proof of Value phase allows broader thinking about solution readiness including external factors (like market changes) which should be considered during delivery.
- Build trust and rapport across teams: This helps to build a more collaborative delivery phase, as the project team members have the same goal in mind and can discuss challenges and opportunities openly.