How to make sure your program delivers the right ROI?
ROI, in common lingo known as Return On Investment, in change programs evolve to Return on Involvement (At least, when you have done a bad job). If you believe most software companies, the actual adoption of the new in the first 90 day’s, if estimated on no more then 30% of your business. That means that in the months to follow, a large portion of the actual embedding of the change, is required.
Some useful tips to ensure you will stay on track and get people on board.
1. Link the KPI’s to the business strategy
You will need to ensure that every solution you bring in to market is linked to the department strategy. Even more important is that their should be a link to the corporate strategy. A clear business validation is required as impact and budget are linked to each other. The bigger the impact, the bigger the budget. The more flexibility you can build in to your approach.
2. Team up!
A business case solely purpose is to validate the investment, and for most stockholders to convince senior leadership e.g. budget holder. By making your business case together with your customer/partner, you will gather more information, stay aligned on the objective, and create a mutual commitment towards the objectives. Make them part of the engagement. At the end of the day you both want the same.
3. Emotional satisfiers are just as important as the actual numbers
The intangible benefits are sometimes more important then the tangibles. What (process) improvement should your solution drive. Which emotion are we triggering? We have seen cases that the investment on itself had a negative cost/benefit ratio looking purely at the financials, but the intangible advantages for the team prevailed. Emotion can play a crucial role.
4. Build in recalibration moments
I’m using recalibration, and not evaluation. An ROI calculation at the start is an estimation. The actual benefit and tools you need to steer the project to a success, requires multiple fixed measurements during the contractual lifecycle. You can use survey’s, face to face feedback sessions, as also the customers and your own data points to validate the success. The recalibration moments you build in to the partnership give you the option to when required, recalibrate the business case and revisit the solution in place.
5. Stay relevant
A good measurement helps identify the needs, but even more the evolving needs of your partnership. In our experience regularly the initial ask and business case evolves over the years, and by measuring up success, and tapping in to the companies corporate strategy, you can be agile/nimble in your approach.
6. Team work is key!
How often do we calculate an ROI, but forget to have the full team aligned to the objectives. It’s important that during your engagement lifecycle in both selling as support, processes of your company are in sync with this value enablement approach. If any of the teams, processes or tools you use, are a risk, then ensure that you disable them before you start engaging.
7. Do not be scared to revisit the initial business case and solution
Not all ROI estimations deliver to their cost/benefits ratio. That is not a bad thing. As long as you take learnings and be agile in your approach. You customer can change direction and thus validating the business case af fixed times, will help you adapt. I see soo often that companies keep pushing forward even when the value is not there anymore. Be flexible and agile. You will see that revisiting and taking your learnings, will make your next case stronger.
8. Create a partnership
When developing a business case, all stakeholders are partners in crime. They should therefore also share responsibility for whatever the case represents. It does not stop after the sale, and your dependency on your peer performance is high. So keep approaching every business case from a WE perspective. If you deliver, but your customer does not adapt where required, the value of the deliverables will not achieve target.
9. Involve all stakeholders bottom up
You may think, why not top down. We’ll the answer is simple. In most engagements you do not communicate to the board. You communicate to the business. They are the ones who will need to defend their investment requests, but also struggle articulating the benefits. In the past 23 years I’ve seen soo many of my contacts struggle with defending why they would like to have the investment granted. When you engage in the pre-sale, often the actual DM (DecisionMaker) is not involved. When presenting your business case, ensure you do this together. But also ensure that the Sr. Management stakeholders become/stay committed to the cause.
10. Use smart KPI’s which are easily measurable
Yeah, this looks simple and logical. But from experience I can tell you that too often when we engage with our customers, the information provided by them for initial analysis is based on data which is later in the project seemed to be impossible gather and often manually derived from systems. Ensure that you keep the KPI’s simple and Clean and validate data sources, before you use them in your calculations. Another tip is validate dependability: Especially when the data you used initially, was dependent of an expert, who may or may not work for the company anymore. Simplicity is key.
About the author: @Rahim Gulamali Strategic Customer Experience focussed Transformational Leader with outstanding track record across BPO, Strategic Change Management, Corporate Risk Management, Information technology, Technical and Financial Project Management. Proven track record in; designing, guiding, clarifying and completing (international) strategic programs; motivating teams and individuals to deliver; streaming and energizing existing business processes where People drive/own the success.