So much of what is perceived to be real in business turns out to be a smoke screen or some distorted reality. Nowhere is this more evident than in the promise of new technology. Entrepreneurs see what they feel is a problem or need to be filled, so they march onward to create the solution. Sometimes we get it right and develop new technologies like Google search. Other times we get it wrong and create Google glass. Remember, Time magazine called Google glass the best innovation of 2012? Either way, each was daring.
In the enterprise and infrastructure software space, the innovation is slower and development more costly. Still users and purchasers of technology get excited about the promise of new technology and the positive effect they hope it will provide to them as well as their businesses.
If you purchase software technology for your firm, Don’t Do This:
Swallow the lure of promising technology based on a sexy demo and unproven benefits of the software. Often users are marketed to and get excited about the potential benefits without any formal evaluation. They become the first follower of what might be a good idea, but what could be a fad or unproven solution that can waste your valuable time and money. The “dancing guy video” might be good for leadership lessons but it is not for choosing new technology that can help and/or change your business.
Instead, Do This:
Companies making technology purchasing decisions rely on any number of techniques to make decisions. Often they form teams of internal stakeholders who review the promising technologies offered by partner and vendor companies. These include but are not limited to using good logic (10 thousand years of evolution as served us pretty well), the “prudent man rule” and experience combined with business case analysis calculations like net present value, discounted cash flow and internal rate of return.
The business case is the most powerful decision support tool available and is a great technique used in combination with the others listed above. Understanding what you are trying to do, your options, what it will take in resources and time, and what your return will be vs. doing nothing or something else is a key undertaking.
The components of a good business case include:
- Agenda – tell the audience what you’re going to do
- Executive Summary – state the problem or opportunity and how you will solve it
- Business Need – why are you proposing the project
- Project Overview – describe the scope of your project
- Implementation Plan – lay out the plan for implementation and associated risks
- Benefit Impact – revenue increases and or productivity gains
- Risks – what can go wrong and what if you do nothing?
- Costs – how much for the software and or services will need to be invested
- Financials ROI – what do you get in return for the investment?
- Summary of Recommendations – describe the key points, recommendation and benefits
We will revisit each of the components of the 10 steps outlined above in future posts to tie them all together.
At Scivantage, we’ve recently started a free Business Case Initiative around our Cost Basis Reporting product, Maxit®. If your firm is considering converting to a new cost basis reporting system, let us know. Industry veteran Claudine Martin has joined Scivantage and she would be glad to help you construct your own unique business case. Claudine can be reached at firstname.lastname@example.org or (508) 341-2123.
By Christian J. Farber. As Executive Vice President of Marketing, Sales & Relationship Management, Christian Farber is responsible for overseeing our entire client experience from first contact through sale and ongoing client support. Mr. Farber unifies market insights and product strategy, with the goal of delivering financial technology solutions that anticipate and meet evolving market needs.