Value Network Analytics

People are saying...

"Value network analysis, through visuals and conversations, helps build and strengthen the relationships and trust that are vital for people working together as a global enterprise." Organizational Effectiveness Leader, Defense Industry Provider

“In several strategic situations the value network effect perspective rather than a value chain perspective has made a difference.”
Jon Fredrik Baksaas, President and CEO, Telenor

Network analytics and performance indicators

Analytics generated by the ValueNet Works application provide insights for improving the financial and organizational performance of your business.

Patterns of network structure and relationships reveal new opportunities to create value. People see powerful visualizations of what is actually happening now, where more value can be realized, and what is required to achieve maximum value benefit across the entire system.

How it works

The ValueNet Works application incorporates Value Network Analysis (VNA) methodology - combining unique value network indicators with structural indicators from classic SNA - although their interpretation, interms of Risk for example, may vary from classic approaches.

Upload your data into the ValueNet Works application
using our Excel®-based template.

The application generates visuals in Microsoft® PowerPoint and Visio and comprehensive indicator reports in PDF (all licenses purchased separately).

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The ValueNet Works application generates two views of the network in visuals and reports.

The Standard (role-based) Value Network shows specific value creating roles as defined for each particular activity. In today’s work, the roles a person fills, which may change even in the course of a day, in different activities. So roles are a more accurate picture of what is really happening than are the jobs titles on an organization chart.

The Collaborative (participant-based) (person-based) Value Network typically includes the names of the actual people who execute each role. There may be more than one person in a role, and they can all be represented according to how they handle specific deliverables. This view and resulting analysis is similar to Social Network Analysis.

Example maps

In Value Network Analysis, roles and participants are represented by ovals.

Transactions, with the names of specific deliverables, are represented by arrows with labels. Note that in VNA, all lines have only one arrowhead. This convention makes it possible to sequence events and optimize business processes, as in the first example below.

In the maps generated by the ValueNet Works application, tangible (meaning contractual or formal) deliverables are shown with green arrows and intangible (meaning informal) deliverables are shown with blue arrows. The colors can easily be changed using the full features of PowerPoint and Visio.

Learn more about tangibles and intangibles: Tangible and Intangible Deliverables in a Value Network

The following maps are two views of an internal value network for scheduling medical procedures. The first diagram here is a Standard, role-based Value Network.

Note that the diagram has had some formatting and highlighting applied. Any of the auto-generated visual reports (such as the unformatted one below) can be modified using the full features of the Visio application.

The second view is the Collaborative, participant-based (person-based) Value Network.

It shows the names of individuals who are actually engaged in the activity. Since multiple people play the roles, the Collaborative Value Network is typically a bit more complex.

In this case the value network analysis revealed that Barbara, in a redundant role of Surgery Coordinator, was informally influencing the scheduling procedure. The unstructured nature of her role left too many key human interactions outside the formal process, resulting in delays and process breakdowns. The work team reconfigured the process to eliminate the redundant role. They also formalized communication with a new web-based scheduling process.

Learn more about working with maps in a technical support case study: Value Networks for Business Process Improvements

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Simply click a few on-line buttons to generate and download comprehensive, dashboards and full reports with more than 50 value network indicators. Simple business language guides interpretation and powerful insights.

At-a-glance Summary Report

The Dashboard provides a quick snapshot of the most commonly used network indicators for Value Network Analysis (VNA) and Social Network Analysis (SNA). 

Full Report

The Full Report is packed with detail and charts for more than 50 network indicators including Resilience, Risk, Stability, Reciprocity, Agility, Perceived Value, and more. A sample page is shown here.

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Each indicator name links to a page to learn more about it. 

Reciprocity in a Value Network

Classic network analysis often looks at Reciprocity - the extent to which ties are reciprocated between Roles or Participants. Some theorists feel that asymmetric (unreciprocated) ties may be unstable. A network that has a predominance of reciprocated ties over asymmetric connections may be a more "equal" or "stable" network than one with a predominance of asymmetric connections. A lack of reciprocity sometimes indicates there is a more hierarchical structure.

Structure and Value in a Value Network

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.

Optimizing Value Flows in a Value Network

Value flow optimization is a way of expanding a process perspective from a linear way of thinking to a complex adaptive systems approach. Value flow optimization is different from a classic process engineering approach. Process engineering strives to drive out variation and to standardize business processes. However, in complex environments variation is a given. It is not only a given – it is desirable in order to adapt to changing conditions and support the continuous innovation required for competitive advantage.

Agility and Stability in a Value Network

One indicator of network agility is how quickly information can move around the network. Most people have heard the term “degrees of separation.” Degrees of separation, technically referred to as “distance” in a network, is a measure of how quickly information can spread out across the network to reach all members. It is an important indicator of a network’s agility in being able to make sense of and adapt to internal and external changes. It is also an indicator of how easy it is for any individual to reach the person who might be able to solve a specific problem. A high average distance between Roles can be an indication that there are not enough hubs or connectors in the network.

Measuring Resilience in a Value Network

Resilience in a value network is critical for the network to respond to changing conditions. Resilience requires the right balance of formal structure to informal knowledge sharing. Therefore, the Ratio of Tangible/Intangible Transactions is helpful as an indicator of the Resilience of the network. 

Overall Asset Impact in a Value Network

In value network analysis you can choose to have the Asset Impact represent impact to the Sender, the Receiver, or to the network as a whole. Typically people assess impact to the Receiver. However, it is quite useful as a way to assess the impact of a transaction to the network as a whole. Either way, the first step in this Asset Impact assessment is to identify the type of Asset that will be impacted by the completion of the transaction. 

Risk and Role Dependency in a Value Network

One kind of risk to the value network shows up in Role dependency. The risk is that the Role could be a bottleneck. If the Role is not adequately resourced then value flow pathways can be negatively impacted with time delays. If a Role cannot keep the value flows moving, then it affects the speed of value creation and conversion in the network. A good cross check for whether the Role is a bottleneck is to look at the speed indicators to see if a potential bottleneck Role slows down the value flows.

Measuring Capacity for Value Creation in a Value Network

The active agents for Value Creation are the Roles in the network. It is useful to look at the capacity for each Role to generate both tangible and intangible value. A decrease over time in value outputs can be an indicator that resource availability or productivity has declined. An increase in value outputs with minimal additional resource demands is an indicator that value productivity is improving. The capacity of a network to generate value depends on good asset utilization - in both financial and non-financial terms. 

Asset Impact by Roles in a Value Network

Asset impact in a value network can also be distributed by role. Roles contribute to the function of a value network in various ways. In particular, support roles may not contribute directly to the financial assets of a value network but may do a great deal to grow intangible assets, such as human competence or business relationships, that will provide future value to the network. Note that the default categories of assets used here are Financial Assets, Human Competence, Internal Structure, and Business Relationships. Other asset categories may be used as well. 

Asset Impact and Cost/Benefit Analysis for a Value Network

Note that Asset Impact indicators are greatly augmented by conducting a Perceived Value analysis. Once the impacted Asset has been identified the next question is, “Does the transaction have a positive or negative impact on the asset? When the Deliverable is received how is it going to impact the overall asset picture?” For example, completion of a financial transaction would provide a positive Benefit for Financial Assets. Completion of a knowledge Deliverable might have a positive Benefit on Human Competence. Completion of a regulatory compliance transaction might have a negative Cost financially. It might also have an even greater negative Cost on Internal Structures by taking valuable IT time and resources. 

Perceived Value and Brand Management in a Value Network

Brand Management has a lot to do with how valuable people perceive your offerings to be. Perceived Value is a way to assess the level of value Roles feel they receive from individual Deliverables, from other Roles, and from the network as a whole. Perceived Value indicators are especially useful for surfacing assumptions - often unspoken or unconscious – about value and value flows. Simply because there is an interaction does not mean that positive value is being created. In fact people may actively dislike the input, or feel it is too costly to process - which could be a negative value. Perceived Value is especially useful when applied to intangible Deliverables, as it is often difficult to gauge their value with a number or financial measure. 

Channel Management for Optimizing Value Network Flows

The Channel profiles provide a way to consider the effectiveness of different delivery mechanisms for specific Deliverables. For example, some companies rely heavily on face-to-face meetings, where video conferencing might be a more effective way to work. Other companies rely on technology and systems for delivering information or automating provisioning. In the application it is possible to select the Channel for the transaction from the appropriate drop-down list. The channel is the medium or mechanism used to transport the deliverable.

Learn more about value network analysis in our Value Network Analysis blog channel archive: Value Network Analysis

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