Application of internal services value assessment model

Abstract

In an earlier project conducted by myself under Prof. Seshadri's guidance with BetaCo., a "Value Assessment framework" for internal services was developed. This framework enabled internal corporate departments to measure in monetary terms as well as intangible terms, the value rendered to the organization and their internal customers. In the current project, the developed framework was applied to six internal corporate departments of Beta Co., and found to be adaptable for all of them. While analyzing the departments Purchasing, Shared Business Processing and the roles of CEO and CFO, it was evident that these departments/people were delivering value in a multi-divisional organization via principles of synergy relying on economies of scale. Literature review in this field also pointed to how synergy is considered as one of the key value enablers for corporate headquarters and top management in multidivisional organizations and matrix reporting structures. Another aspect which came out through discussions at Beta Co., was how behaviour is an enabler for value at top management level. The challenge was to bring forth how consistent behaviour leads to monetary value being created for the organization. To enhance these new facets that evolved this project report is focused on the value that the CEO and CFO, or other such multi-business group heads bring to an organization. The value models of the other departments analyzed have not been included, as it is a plain application of the previously developed value model, and hence almost like a repeat of the previous project. An attempt has been made to create value models that encompass the various facets of the role that top-management of multi-business organizations play. Three key areas have been identified and value models created for these domains. The areas would probably be different in single-business or linear reporting structure organizations, but the framework developed for value assessment will still be applicable.