Intradiem invited Donna Fluss, President of DMG Consulting and a leading contact center and back-office operations and technology expert, to answer a few strategic questions for our readers. The first question involves making a business case for a high-value technology investment. In the next installments of our Q&A series, Fluss will cover opportunities to improve the performance of back offices and the critically important topic of what it takes to deliver great service and be a top service organization.

How do I build a business case to obtain approval for a technology investment?

Donna’s Answer:

The simple answer is that you need to convince the powers that be – generally a chief financial officer (CFO) or investment committee – that the solution or application you want to buy will contribute to the success of your organization. Here is a list of steps to take:

1. First, you must convince your manager of the importance of the system or application. Keep in mind that while senior executives are saying that one of their top goals is to provide an outstanding customer experience, few are willing to make investments to achieve this goal if the project does not also improve staff productivity, reduce costs, increase sales, or improve customer retention.
2. Find out what the top goals are for both your company and business unit, and figure out how to tie both quantitative and qualitative benefits to those goals.
3. Obtain your organization’s investment approval guidelines. Most large companies have standard investment approval thresholds that specify the return on investment (ROI) required to obtain approval for a project. (ROI consists of three financial categories: payback, net present value (NPV) and internal rate of return (IRR).) Keep in mind that these are only guidelines, and in a tough economy where capital is tight, an investment has to greatly exceed the thresholds and contribute to top company goals to have a chance of being approved.
4. Work closely with the vendor whose solution you want to buy to identify the specific benefits that your organization will realize. Most vendors have a standard ROI model that identifies the benefits categories. Use this as a starting point, and figure out what will and won’t apply to your organization. While it’s important to make a strong financial argument in support of the investment, it’s more important to be able to achieve and possibly exceed the promised savings.
5. Figure out how to “play the game.” Sometimes it’s as much about who you know as the benefits of a solution. Therefore, it’s important to “work” the decision makers by convincing them and their lieutenants (or gatekeepers) of the benefits. Talk to everyone who is positioned to influence the decision, and explain how the solution will benefit their department, not just yours.
6. Take a long-term approach, as it may take 2 or 3 review cycles to get approval for a project. In today’s economy this is often the case. Don’t get discouraged if your project is rejected the first time through. In many companies today, all first-time projects are rejected. It is just the rule and has nothing to do with your initiative; it’s simply a way to reduce the number of project approval requests. So don’t be discouraged, but before you resubmit your request, update it and try to improve your cost justification.

These are just a few of the guidelines for building a strong business case and obtaining approval for an investment. As important is what you do after the solution is implemented, as it will impact your ability to get approval for your next project. Once you succeed, be sure to document and communicate your success up the management chain, so that your efforts are appreciated and rewarded.