‫It Value proposition budget as a way of implementing an environment of value creation by constantly
‫asking why an amount is being included in the budget or this budgeting method.
‫And the strategy, we're implementing a program of value buying.
‫We are constantly asking why an amount is being included in the budget or what value this is bringing
‫to the company.
‫The department or stakeholders.
‫And this particular budgeting method,
‫you would list out all of your expenses or have your project manager list out those expenses for each
‫department at this budget impacts.
‫You would then walk through and assess the value of each activity.
‫You have to ask yourself, are these activities essential to keep for the business? In value proposition
‫budgeting,
‫there are few key questions.
‫One.
‫Why is this amount being included in the budget?
‫Two, does this expense create value for the stakeholders, for the department or for the employees?
‫And three, does the value of the expense outweigh the costs?
‫If not, we're looking to determine a reason why this expense should be justified.
‫What we're talking about value proposition budgeting, it's really more of a mindset.
‫You have to think about your influence and your network at work.
‫So when you think about leadership and those key stakeholders, you want to influence their decision
‫to give you the go ahead for your budget and avoid unnecessary exponential by justifying the cost of
‫these expenses.
‫Some of the things that we will see in value proposition budgeting are things that would add value,
‫such as a service or some sort of innovation, a feature that would make the company the product or
‫the department more attractive.
‫If it's an internal project as this making something more attractive within the company.
‫It's something that's influencing the external.
‫What is the external value? While we're thinking about the value proposition budgeting.
‫Here's a chance to apply this approach to a current or past project.
‫Let's think about the statement that the company can use to summarize the purpose of the project.
‫And does that statement clearly identify the benefits the company would receive?
‫This starts to create your value proposition in order for the value proposition budgeting system to
‫work.
‫You have to trust your team and your project to ensure that they're estimating the percentage of value
‫that each expense is really bringing to the table.
‫So when this budget is presented to leadership, there's some substance behind the request. With value
‫proposition budgeting.
‫There are many advantages and disadvantages.
‫Definitely, when we're thinking about the advantages, we know that this particular budget was greenlit
‫based on the value.
‫So number one, you know that your program or project has some sort of value or substance towards the
‫company.
‫There's direction, there's focus and there's confidence within this particular budget.
‫It improves the understanding and engagement.
‫So by identifying those activities expenses and aligning what those values are, you've already proved
‫again that there's substance.
‫You will have to clarify your messaging due to this particular budget.
‫Require a bit more research.
‫But there's more effectiveness when we're talking about marketing to stakeholders and leadership within
‫the company.
‫So she'll be explaining the value in subsequent meetings.
‫One of the main disadvantages we're looking at and value proposition budgeting, as at some activities,
‫may not necessarily have value or the value may be difficult to quantify.
‫So let's say if this is a particular program or project budget for engagement and an after hours work
‫activities where you including people's families.
‫This could provide value to some and the form of networking, but for others, it may not if they really
‫don't have a family that would benefit from this particular program or sponsorship.
‫Another disadvantage could be not understanding how to quantify.
‫If your department is specifying a particular budget to now have resources working on the weekends,
‫what is the value of that?
‫Is there research that shows the productivity can increase or that sales will increase?
‫If that research is not there, it could be really difficult to add that value of why the moneys are
‫needed for resources to work on a particular weekend.
‫Think about your current projects or past projects you are involved in.
‫Are you able to think about any value component in this section?
‫We want to think of ways our projects create value.
‫Using your current or past project as an example, you see template and the handout to identify value
‫adds,
‫you could possibly call out to leadership or stakeholders or your value proposition budget.
‫Again, think about value creation and who would benefit from each value identify.