The three legged stool on which your software business case must stand

In my career, first as a software programmer and later as an in-house corporate consultant as well as external management consultant, I have seen numerous enterprise software deals. However the enthusiasm at the time of deal signing rarely lasts beyond the first 18-24 months and it is not uncommon to find buyers disillusioned with their investments afterwards. This can partially be explained by buyer’s remorse but I have often wondered if there is another reason that throws software business cases off the rails.

Looking at a number of enterprise software business cases as well as sales collateral from the software vendors, I have gathered that most benefits from adoption of enterprise software can usually be bucketed into one of the three categories below:

  1. Automation: Automating a part of workflow which otherwise would need to be carried out manually. Automation usually implies cost savings over the duration of business case. For example, a new CRM tool that helps you remember when to follow up with your leads will mean that you will free up some human effort that can be invested in other productive tasks.
  2. Coverage: Allowing you to serve a previously unserved/under-served area. Coverage often implies a growth in revenue, either at the cost of competition or by creating completely new categories. For example, a telco’s new BSS system might enable it to make offers or pricing plans for its customers that couldn’t have been done otherwise. This will mean that all else being equal, the telco will be better-placed than its competition to attract and retain customers.
  3. Better insights/decision making: Allowing you to make better business decisions. Better insights/decision making may help businesses grow their revenues, cut costs, or help them improve upon some other metric such as customer experience. By virtue of the fact that most enterprise systems capture significant amount of data for your enterprise there is almost always a significant component of business case that is premised on making sense of that data. For example, developing better understanding of your customers may help you create new product categories and grow/shield your revenues.

These three benefits can almost be thought of as a three-legged stool on which the business case sustains itself.

Talking of three-legged stools, a wise man once said, “The most important leg of a three-legged stool is the one that’s missing”.

If business case for enterprise software is sustained on a three legged stool then it is in organizations’ best interest to find out the most important leg that is required to keep it balanced.

In my experience, most organizations are able to realize the benefits owing to automation and coverage. This is because whatever needs to be done to realize these benefits is enabled by the software vendor in most cases. Resistance to change if any is also overcome by the highest levels of the buying organization often through help from external consultants and senior level managers. Almost always, there is an existing (legacy) system being replaced and the path to automation and coverage becomes part of the overall migration journey.

However, the third benefit (i.e. better insights/decision making) is usually the one that eludes most organizations. This is because it requires a change in established workflows and habits. This is easier said than done because no matter the nature or magnitude of change, there will always be some who will not feel positive about it.

If you are someone who has seen your business case slipping away from your hands because of organizational resistance or an unsupportive HiPPO (Highest Paid Person’s Opinion), now might be the time to breathe second life into your business cases lying in coma.

The excitement about analytics and the general optimism that business leaders share about the value of data has never been higher. Now, when organizations are talking about concepts such as “Data Discovery” or “Data Mining”, you might be surprised to find new friends and sponsors within your organization who are willing to invest the time and resources required to milk the data cows sitting within your organizations. With the variety of tools and capabilities available in the market you won’t have to break the bank either.