Value Equation

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= " the value equation is a distributed solution to time management, which can be applied in large scale p2p, co-creation processes". [1]


Description

"The value equation is the third module of a value accounting system: contributions log evaluation of contributions value equation It "dictates" how revenue is distributed to all participants (active affiliates) in a collaborative value creation process. In other words, it is used to compute a % of total revenue for every participant/contributor, taking into consideration all different forms of contributions and different modulators, and perhaps taking into consideration different cultures of constituent communities formed by participants.

The value equation describes how different types of contributions are amalgamated into a single deliverable. The output is the equity piechart. It is a dimension reduction operator, taking all the complexity of contributions and customs of participants to project them onto the [0,1] real number domain. In "past looking value accounting systems" (this applies to ventures who consume resources to create market value and later exchange it against revenue) the % of total revenue for every contributor is calculated based on past contributions. In "forward looking value accounting systems" (this applies best to ventures that produce social value and accept donations/grants to realize a project) the % of total revenue for every contributor is calculated based on a projection of contributions, evaluated against a plan.

The value equation is not universal. Every project can have one. It is applied to the 'project-level' and 'open enterprise-level'." (http://valuenetwork.referata.com/wiki/The_Value_Equation)


More Information

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