Proof of Concept Vs Proof of Value

When organizations want to build a new capability or introduce a new idea to their customers they often say “Let's do a Proof of Concept (POC) or a Proof of Value (POV)”. This sometimes leads to a debate as to which is the right term to use POC or POV. Some feel the terms are synonymous and interchangeable and some see them as different and distinct.

So why is that? Are they indeed different and if so how do they differ?

POCs and POVs share one thing in common: they both set out to ‘prove’ something but what they set out to prove is very different.  

The Proof of Concept (POC) tries to prove if an idea, approach, or product works. The focus is on demonstrating whether something works or not. The POC answers the question “Is this idea feasible” across a range of dimensions.

Proof of Value (POV) tries to determine what benefit could be derived for customers or the organization if an idea, capability or product was built and what measurable value would be gained if the idea was pursued.

A venture capitalist (VC) gives an entrepreneur seed capital to enable the entrepreneur to prove if the idea or concept is feasible and will work. This is a POC.

An enterprise will conduct a POV of the entrepreneur's product to see if it works for them under their conditions and for their use cases. This is a POV.   

So do organizations need to conduct a POC for products that have already been demonstrated to work in the industry?

An example

In developing the technology behind NLP / NLU, vendors would have conducted a lot of POCs for the different approaches and algorithms.

To leverage the NLP/NLU technology to replace the legacy tree-based IVR navigation using a conversation UI (CUI) approach vendors would have conducted a lot of POCs to help them evolve their CUI product.

When an organization wants to implement a vendor’s CUI solution for their IVR they would conduct a POV to demonstrate the value it would bring if implemented. If the technology was new and in the early adoption phase then the organization would conduct a POC prior to or concurrently with a POV.

The critical thing that POCs and POVs share is that at the end of both you

a.    Gain a deeper understanding of the problem investigated and

b.    Extract learnings that can be used to advance your work and business.