1
00:00:03,190 --> 00:00:09,180
‫It Value proposition budget as a way of implementing an environment of value creation by constantly

2
00:00:09,180 --> 00:00:13,920
‫asking why an amount is being included in the budget or this budgeting method.

3
00:00:15,010 --> 00:00:19,150
‫And the strategy, we're implementing a program of value buying.

4
00:00:19,750 --> 00:00:25,870
‫We are constantly asking why an amount is being included in the budget or what value this is bringing

5
00:00:25,870 --> 00:00:26,770
‫to the company.

6
00:00:27,370 --> 00:00:29,290
‫The department or stakeholders.

7
00:00:29,830 --> 00:00:31,570
‫And this particular budgeting method,

8
00:00:31,960 --> 00:00:37,600
‫you would list out all of your expenses or have your project manager list out those expenses for each

9
00:00:37,600 --> 00:00:39,760
‫department at this budget impacts.

10
00:00:40,450 --> 00:00:44,200
‫You would then walk through and assess the value of each activity.

11
00:00:45,360 --> 00:00:51,810
‫You have to ask yourself, are these activities essential to keep for the business? In value proposition

12
00:00:51,810 --> 00:00:52,290
‫budgeting,

13
00:00:52,740 --> 00:00:54,150
‫there are few key questions.

14
00:00:55,140 --> 00:00:55,620
‫One.

15
00:00:55,860 --> 00:00:58,230
‫Why is this amount being included in the budget?

16
00:00:59,480 --> 00:01:06,290
‫Two, does this expense create value for the stakeholders, for the department or for the employees?

17
00:01:07,130 --> 00:01:11,390
‫And three, does the value of the expense outweigh the costs?

18
00:01:12,380 --> 00:01:17,870
‫If not, we're looking to determine a reason why this expense should be justified.

19
00:01:18,410 --> 00:01:23,180
‫What we're talking about value proposition budgeting, it's really more of a mindset.

20
00:01:23,750 --> 00:01:27,260
‫You have to think about your influence and your network at work.

21
00:01:27,890 --> 00:01:33,290
‫So when you think about leadership and those key stakeholders, you want to influence their decision

22
00:01:33,290 --> 00:01:40,160
‫to give you the go ahead for your budget and avoid unnecessary exponential by justifying the cost of

23
00:01:40,160 --> 00:01:41,090
‫these expenses.

24
00:01:41,660 --> 00:01:46,970
‫Some of the things that we will see in value proposition budgeting are things that would add value,

25
00:01:47,120 --> 00:01:52,730
‫such as a service or some sort of innovation, a feature that would make the company the product or

26
00:01:52,730 --> 00:01:54,290
‫the department more attractive.

27
00:01:55,360 --> 00:01:59,620
‫If it's an internal project as this making something more attractive within the company.

28
00:02:00,640 --> 00:02:03,190
‫It's something that's influencing the external.

29
00:02:03,370 --> 00:02:08,710
‫What is the external value? While we're thinking about the value proposition budgeting.

30
00:02:09,100 --> 00:02:12,820
‫Here's a chance to apply this approach to a current or past project.

31
00:02:13,420 --> 00:02:17,980
‫Let's think about the statement that the company can use to summarize the purpose of the project.

32
00:02:18,730 --> 00:02:22,780
‫And does that statement clearly identify the benefits the company would receive?

33
00:02:23,560 --> 00:02:29,500
‫This starts to create your value proposition in order for the value proposition budgeting system to

34
00:02:29,500 --> 00:02:29,770
‫work.

35
00:02:30,310 --> 00:02:35,950
‫You have to trust your team and your project to ensure that they're estimating the percentage of value

36
00:02:36,340 --> 00:02:39,100
‫that each expense is really bringing to the table.

37
00:02:39,940 --> 00:02:45,730
‫So when this budget is presented to leadership, there's some substance behind the request. With value

38
00:02:45,730 --> 00:02:46,840
‫proposition budgeting.

39
00:02:47,080 --> 00:02:49,390
‫There are many advantages and disadvantages.

40
00:02:50,110 --> 00:02:55,260
‫Definitely, when we're thinking about the advantages, we know that this particular budget was greenlit

41
00:02:55,270 --> 00:02:56,500
‫based on the value.

42
00:02:56,950 --> 00:03:02,200
‫So number one, you know that your program or project has some sort of value or substance towards the

43
00:03:02,200 --> 00:03:02,740
‫company.

44
00:03:03,400 --> 00:03:07,810
‫There's direction, there's focus and there's confidence within this particular budget.

45
00:03:08,500 --> 00:03:11,150
‫It improves the understanding and engagement.

46
00:03:11,590 --> 00:03:18,460
‫So by identifying those activities expenses and aligning what those values are, you've already proved

47
00:03:18,460 --> 00:03:20,260
‫again that there's substance.

48
00:03:20,980 --> 00:03:24,310
‫You will have to clarify your messaging due to this particular budget.

49
00:03:24,640 --> 00:03:26,230
‫Require a bit more research.

50
00:03:26,860 --> 00:03:31,900
‫But there's more effectiveness when we're talking about marketing to stakeholders and leadership within

51
00:03:31,900 --> 00:03:32,470
‫the company.

52
00:03:33,170 --> 00:03:36,100
‫So she'll be explaining the value in subsequent meetings.

53
00:03:36,880 --> 00:03:42,520
‫One of the main disadvantages we're looking at and value proposition budgeting, as at some activities,

54
00:03:42,520 --> 00:03:47,770
‫may not necessarily have value or the value may be difficult to quantify.

55
00:03:48,610 --> 00:03:55,420
‫So let's say if this is a particular program or project budget for engagement and an after hours work

56
00:03:55,420 --> 00:03:58,450
‫activities where you including people's families.

57
00:03:58,840 --> 00:04:04,990
‫This could provide value to some and the form of networking, but for others, it may not if they really

58
00:04:04,990 --> 00:04:08,980
‫don't have a family that would benefit from this particular program or sponsorship.

59
00:04:09,550 --> 00:04:13,570
‫Another disadvantage could be not understanding how to quantify.

60
00:04:14,520 --> 00:04:19,800
‫If your department is specifying a particular budget to now have resources working on the weekends,

61
00:04:20,220 --> 00:04:21,630
‫what is the value of that?

62
00:04:22,320 --> 00:04:27,000
‫Is there research that shows the productivity can increase or that sales will increase?

63
00:04:27,690 --> 00:04:33,240
‫If that research is not there, it could be really difficult to add that value of why the moneys are

64
00:04:33,240 --> 00:04:36,330
‫needed for resources to work on a particular weekend.

65
00:04:37,050 --> 00:04:40,500
‫Think about your current projects or past projects you are involved in.

66
00:04:41,190 --> 00:04:45,600
‫Are you able to think about any value component in this section?

67
00:04:45,630 --> 00:04:48,300
‫We want to think of ways our projects create value.

68
00:04:49,140 --> 00:04:55,500
‫Using your current or past project as an example, you see template and the handout to identify value

69
00:04:55,500 --> 00:04:55,910
‫adds,

70
00:04:55,920 --> 00:05:00,810
‫you could possibly call out to leadership or stakeholders or your value proposition budget.

71
00:05:01,700 --> 00:05:07,000
‫Again, think about value creation and who would benefit from each value identify.