What is MOV?
MOVs are a key concept related to project management. MOV stands for Measureable Organizational Value (Marchewka, 2009, p. 44). Marchewka defines a MOV as a key part of developing a business case (Machewka, 2009, pp. 42-44). A business case is the first step in beginning the process for developing a potential IT project. A business case “provides an analysis of the of the organizational value, feasibility, costs, benefits, and risks of several proposed alternatives or options.” (Marchewka, 2009, p. 42).Machewka (2009) includes the creation of a MOV as step 2 in a six step process of creating a business case (p. 44).
Marchewka (2009) notes that any MOV should relate directly to the solution of a problem or to an opportunity that needs to be realized and that any project should also align with organizational strategy and goals (p. 44). Marchewka (2009) also states that an MOV must be measurable, provide value to the organization, be agreed on, and be verifiable (pp. 44-45).
However, very confusingly, Marchewka (2009) states that “the overall goal and measure of success is referred to as the project’s MOV.” (p 44). This does not make sense. Instead, projects often have several measurable objectives. And, goals should not be confused with MOVs. Goals are more general and MOVs are what can be measured to see if one or more goals are being reached. For example, a project goal could be based on a need or desire to become more competitive as a low cost supplier/producer of a product. This may lead to the suggestion of an automation project that reduces the required number of labor hours associated with production that would result in labor cost savings each year. The project may also include improved information systems that will allow production managers to make more accurate decisions leading to less production waste and again, lower costs.
The goal of the example production project is to lower production costs. Based on this production project example, it is clear that this goal could lead to a project that has several high-level target measurable values that will be used to evaluate the project – these measureable target values are the MOVs.For example, one MOV could be a 10% reduction in labor costs realized in the first year after the completion of the project. Another MOV could be a 5% reduction in materials costs due to the improved information system gained in the first yearafter completion of the project. The metrics for these MOVswould be the measures of labor cost reductions and the measures of reduction in material waste.
The example above demonstrates that having one MOV is simply not reality. Also, from my experience working on a multitude of projects, this is not the case. Therefore, my evaluation of Marchewka’s coverage of this topic results in the conclusionthat the textbook presents some good ideas and strategies for developing the MOVs but it also has some mistakes which makes the concept confusing.
Marchewka (2009) textbook also presents an incorrect MOVrelated to landing a man on the moon. A MOV, according to Marchewka’s (2009) definitions on pages 44 – 45 and his examples on page 50 , must be precise, measurable, verifiable, have a time period, and be tied directly to monetary figures.Specifically, the textbook presents the 1960s presidential statement concerning the landing of a man on the moon by the end of the decade as a “good” MOV. But, I contend that it is not a “good” MOV – it is, in my opinion, a terrible one.The following is the reasoning that supports my opinion.
First, this is a goal, not a MOV. To be a MOV it must include directly calculable numeric values that can then be directly expressed in monetary terms. Landing a man on the moon is expensive. What is the monetary value that is to be gained? Marchewka’s definition states there must be ‘value added to the organization’ (p44). Value ultimately must be expressed as either a reduction in costs or an increase in revenues – amonetary value. If it cannot be measured in dollars then we have no baseline scale to compare it to other alternative, competing projects. Therefore, every MOV must have a dollar value (or numbers that translate directly to monetary values using agreed upon rules) and each numeric value must be supported by hard data and/or probability-based data.
Assuming public funding is limited (something politicians should do more often) landing a man on the moon used dollars that could have been used for medical research for a cure for cancer or for national infrastructure or for cleaner waterways, etc.
However, if it is stated (and supported) that landing a man on the moon would involve testing technology that would then be used to vastly improve national defense systems considered critical to national security and defense, then there could be a good MOV stated for the project. Specifically, if foreign military threats are strong and verifiable and the moon project would involve developing technology essential to maintaining a military edge, then a good MOV is possible – a MOV such as:
Technology developed in the ten year moon project will improve trajectory, tracking, and interception systems critical to the national defense that will reduce the number of lives lost in the US from a first strike nuclear attack by 80% within two years of the project completion with an expected advantage for at least 10 years.
If the cost is 1 billion dollars and the risk of attack is high and 50 million US citizens are estimated to be killed without these new systems, then the project could be seen to have measurable value. Also, there would need to be data strongly supporting the superiority and exact capabilities of the new systems and some reasonable estimates as to the likelihood of success in developing these new systems.
The monetary value here can be expressed based upon the expectation that only 10 million would be killed by a first strike instead of 50 million. You then would have to determine if the cost of the project is worth saving 40 million people and that the high risk of attack is accurate. You would then need to place a monetary value on each human life to come up with a value for the project that could be compared with other potential competing projects. Again, you also then have to consider the project risks and then determine if the probability of attack is truly high enough to warrant the funding – all such considerations would be part of what Marchewka (2009)refers to as the business case for the project.
Another incorrect MOV is mentioned by Marchewka (2009) on page 50. It states that a MOV could be a 20% return on investment (ROI) and 500 new customers. This is a poor MOV for multiple reasons. First, a measure of value should not overlap (Lloyd, 2010, p. 52). Is the business generated from the 500 new customers part of the ROI?If so, then the MOV should be: “500 new customers will generate a 20% ROI.” Also, it is never explained by Marchewka in this example as to how the return on investment will be realized and how it will measured.There should be supporting explanations indicating how the ROI MOV will be realized and what metrics will be used.
The specific attention to MOVs is a good idea by Marchewka. A project should not be developed without knowing exactly how we will measure the dollar value of the project. If the dollar value of a project is not known or left up to multiple interpretations then the worth can never be known and the worthof one project cannot be compared to other projects – a recipe for disaster. To compare alternative project there must be a baseline scale and it must be a monetary scale.
Marchewka needs to note that there are multiple MOVs possible foreach project and not just one. Marchewka needs to consider that goals are not MOVs. I have found no other source that uses this term, which is unfortunate. Even in the latest editions of premier Project Management resources such as Kim Heldman’sProject Management Professional Exam Study Guide series and PMI’s PMBOK series, the term is not included.The term should be better defined and be included in the PMI literature because it is pertinent to all types of projects. Too often the areas of value for a project are not properly identified and not properly measured.