You want to buy a new digital solution, invest in an upgrade or move to the cloud. You know it will benefit your business but how do you get the investment required approved? Build a business case.
New technology products cost money, time and often introduce a new approach that boards can sometimes be cautious of. Ensuring you provide them with a clear and comprehensive overview of how this solution benefits your organisation both financially and non-financially is key.
Technology projects used to be based on the idea that solutions have a shelf life and depreciate in value over time but with new cloud-based SaaS solutions this isn’t the case. These solutions are evergreen and as part of your subscriptions you get updates and improvements for free.
Elements of a technology business case
The first element of a technology business case to consider is the costs. Ensure you have a full understanding of all monetary costs is critical. What are the license costs, how many licenses will you need? Is there an implementation cost or will you do it in-house, if you do it in-house what sort of time and resource commitment will be required? Then there are ongoing costs, will the solution require upgrades or support from a specialist?
The second element is to look at how the new technology benefits your organisation. A key and often overlooked element of this is employee time and productivity.
For the users of the new solution, how much more efficient will they be with a new solution with a clean interface and good search capability? This is often the main source of benefits for a technology product. How long do key tasks take now and how long might they take with the new solution. Technology partners should be able to help demonstrate key processes within the new solution to help you understand this.
Now you need to consider the time saved by your IT team. Most modern solutions are cloud based, removing a lot of maintenance, server management and day-to-day activities. Freeing up your IT team to focus on value added activity will drive benefits across your organisation that can be attributed to this technology project.
Consider how this benefits other areas of the business, does it help your employees sell more or retain customers better? Provide greater customer experience? Does it improve employee engagement or improve your ability to recruit, are their brand benefits to having a new solution? Is the new solution more intuitive, requiring less training and remove key dependencies?
Businesses need to manage risks, and ensuring you capture what risks you are reducing or avoiding by investing in a new technology project can be an effective way to motivate the investment. It can be hard to quantify the pound value of this but it is worth including. A lot of technology projects are replacing old or out of date systems, with poor security that might not be in support from the solution provider anymore.
Data and cyber security are popular topics and increasingly big risks for organisations. Articulating how your solution better protects your organisation and its data could be the deciding factor.
Another factor to consider in risks is what is the risk of doing nothing.
Return and payback
Once you have captured and articulated the costs and benefits it is important to translate this into a return on investment. A common way to do this to look at the costs and upfront investment and define how long it would take for the benefits to equal the costs called the payback period. For example investing in a new CRM solution could provide a pay back period of 6 months. Meaning for every month after that where the solution is in use your organisation is accumulating benefits. Providing a 1, 3 & 5 year view of the costs and benefits is also a useful illustration to demonstrate this and show how large the benefit is over time.
Now you have covered the basics you are ready to start crafting your business case and getting your technology project moving. If you need assistance, we have a proven business case development methodology that can help. To find out more contact us today.