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| Excerpt from: Value Network Analysis
| | | July 28, 2009 | | Indicators and Metrics for Monitoring and Predicting Performance | One of the most powerful benefits of value network modeling is the ability to monitor, predict and influence performance. Metrics are made simple with the Comprehensive Reports function in the ValueNetwork.com application. In addition to Animations and Detailed Visuals, indicator reports are generated for the Standard Value Network (Role view) and the Collaborative Value Network (Participant view). The text and charts below are drawn from a Standard Value Network (Role-based) Report, using the example of scheduling procedures in a health care organization. For other blogs in this series see the links at the end or simply search "Indicators and Metrics."
Structure and Value
How do Roles gain or contribute value? The indicators that help us see value from a structural standpoint are Centrality Indicators. Centrality is a classic network indicator that shows which Roles have the most ties. Roles with more ties are said to be more“central” to the network and hold important structural positions. Roles that have more ties to other Roles may have advantaged positions. Because they have many ties, they may have alternative pathways to satisfy their needs, and less dependency on other individuals. Roles or Participants that have many ties may have access to more of the resources of the network as a whole.
As noted in the Risk factor of Structural Dependency, just because a Role has a strong position structurally does not mean it is providing the most value to the network. We can begin to make that determination, however by examining incoming and outgoing ties separately, using Centrality indicators. From a Value Creation standpoint, outgoing Deliverables or transactions show the kinds of value a Role is providing to the network. Incoming Deliverables show value that is being gained from the network to the advantage of a particular Role. So we can use these centrality indicators the following way:
Centrality In Degree = the value a Role gains from the network
Centrality Out Degree = the value a Role provides to the network
Therefore the Centrality indicators that follow are shown distributed by Role. The first set of indicators (In Degree) shows the value Roles are gaining from the network. The second set (Out Degree) shows the value provided by different Roles in the network.
Other topics in this series:
| Topic Tags: centrality, network analysis, risk, structure, value creation | |
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