CVP (Capital value Process) was developed initially by Amoco in the USA prior to merging with BP. Its intent was to provide a basis for decision making and governance in relation to the assignment of capital to large scale upstream projects.
BP adopted the process in its own upstream businesses and from there it was driven out into downstream activities via the ‘Digital Business’ of BP (later ICT – Information Communications Technology) function. It is from this support that it became known as a governance process associated with IT implementation.
The 5 stages, outlined elsewhere in this string, are adaptable to the requirements of the case in hand. However in all cases the strong emphasis is on ‘front-end’ loading of data and knowledge in order to provide assurance and speedy delivery to any resulting implementation. A feedback loop (final stage) is a cornerstone element to inform future projects; however this element, in my experience, was often overlooked.
Another aspect of the process developed in association with what was Arthur Andersen Consulting at the time, was the concept of ‘Optioning’.
This was a piece of thinking that attempted from the outset of the project to provide decision makers with an appreciation of the possible impact of the project and the dependencies that said impact was reliant upon.
For example, a systems implementation might make available an increase in market penetration of 20% with a P50, however it may have several unknowns associated with it, hence the ‘P50’ score. As dependencies and unknowns either become delivered or known, and the true impact becomes known, the ‘Option’ becomes less variable and the ‘P’ score increases…say to P80 – the reality or end game becomes clearer therefore the true impact becomes less risk prone. The ‘P’ is the probability score. projects aim for a P score of 80+ as this indicated a strong likelihood of delivery on the project’s promise.
Underpinning the 5 gates are details regarding documentation requirements, governance meeting attendance profiles (which functions need to provide governance input), meeting schedules, budget planning tools etc.
The framework could be as complex or as light weight as required for the funds at risk or the business impact anticipated.
I worked with CVP, often being an apostle, for about 5 years from 1999 to 2004. People often confuse it with process management or should I say people often confuse project management with governance…lol. I hope this helps.
CVP is in use to this date.