Skip to main content Skip to Footer

LATEST THINKING


Prime value chain analysis: Understanding your organization’s critical path to value

Realign management to key priorities, break down functional silos, and prioritize improvement efforts.

Overview

Prime value chain analysis helps realign management to key priorities, break down functional silos, and prioritize improvement efforts to drive performance and deliver business outcomes.

Large, complex organizations are often challenged to deliver substantive performance improvement owing to the fact that value is created by inputs and transactions across numerous functions and countless processes.

Due to their size and matrices, typical improvement efforts are often seen in the context of their functional area and related processes. As a result, they often lose sight of the fact that, together, they must enable strategic objectives and outcomes.

Accenture’s experience shows that by using a customer-based view, prime value chain analysis can help companies drive enterprise value. It enables the organization to:

  • Realign its core business, and understand how its functions and capabilities either support or impede business goals—capturing all inputs that contribute to business outcomes.

  • Understand the implications of complexities on the operating model.

  • Identify strategic opportunities.

  • Isolate processes for further analysis.

  • Highlight the enterprise impact of a specific issue or problem.

  • Address systemic cross-functional issues better than isolated improvement efforts.

  • Identify cross-value chain interactions.

Read the report to find out more on how prime value chain analysis can benefit your business, and learn how we helped a global Fortune 500 consumer products manufacturer improve its product development efficiency and effectiveness.

Background

High-performance businesses tend to share common traits: They focus on the evolving needs of targeted customers and their own core competencies, and relentlessly pursue perfection in how they execute.

There are essentially three criteria for success:

  • Having a robust business strategy clearly defining what solution to develop, sell and who to sell it to.

  • Developing strong core competencies that lead to differentiation in the eyes of the customer.

  • Executing the business effectively and efficiently to deliver value to the customer quickly, reliably and profitably.

While many organizations may excel at some of these elements, mastering all three can be difficult, especially as an organization grows in size and complexity. Over time, the key elements that make a company successful and give it its lifeblood can become lost amid the functional silos, clutter and inward focus that often accompany growth.

Key Findings

Prime value chain analysis helps rollup inputs from across the business that impact strategic outcomes. There are numerous benefits of prime value chain analysis, which can include:

  • Establishing a “true north” for reaching strategic objectives, independent of existing organizational boundaries and bureaucratic constraints.

  • Illuminating the core activities that can become obscured over time by functional structures, singular process ownership and organizational bureaucracy.

  • Helping identify the optimal portfolio of improvement opportunities, which will likely be cross-functional organizational opportunities.

  • Aligning stakeholders, breaking through silos and generating alignment on a path forward to implementing performance improvement projects with a strong strategic impact.

  • Serving as a catalyst toward becoming a performance-oriented organization—removing ambiguity about how value is created, delivered and by which accountable groups and individuals.

Recommendations

There are two phases of prime value chain analysis:

  • Phase 1: The management redefines the core business activities and evaluates strategic objectives versus the current process and organizational capacity. It identifies the key improvement opportunities that could contribute most to improving the business.

  • Phase 2: The management prioritizes strategic gaps and develops a transformation road map. This strategic road map helps the organization focus on the biggest strategic gaps and determines their priority. The road map also identifies an executive prime value chain champion or sponsor who is responsible for overseeing the planning and execution of the assessment and implementation work (senior leadership engagement is vital in this process).

Closing the performance gaps may involve traditional but targeted process improvement projects while others may involve structural solutions such as changes to the operating model, new systems or updating performance management practices. Often, the resulting initiatives will cut across the enterprise, with multiple intersections between organizations, processes, technologies and offerings or services.

The outputs of prime value chain analysis become living assets for the management—providing an understanding of the relationships between structure and execution, and how best to harmonize and optimize them to deliver strategic business outcomes.