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1/13/2005
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SmartAdvice: Understand The Landscape And Players When Consolidating Servers

Approach the politics of server consolidation with solid research and executive backing, The Advisory Council says. Also, highlight intangible benefits and find the value others miss to get IT-project funding success.

Question B: We're having difficulty getting money for IT projects we consider vitally important. What are some "secrets of funding success" for today's economy?


Related Links
20 Ways to Find Tangible Savings Others Miss

Storytelling
Our advice: In today's economy, CXOs demand to "see the ROI." Too often IT people misunderstand how to develop an irresistible return-on-investment analysis. An analysis of more than 300 highly diverse business cases has revealed these success factors:

  • Finding value others overlook: Align project benefits directly to issues that decision-makers care about. This requires knowing (1) the firm's visions, values, and goals, and (2) the decision-makers' favorite strategies for realizing such objectives. For example, to justify a CRM system, go beyond the obvious. Sure, salespeople can benefit, as can customers. But couldn't a better CRM system improve manufacturing and supply-chain efficiency via more reliable sales forecasting? Why couldn't CRM accelerate new product successes via more detailed insights into prospect and customer attitudes?
  • Highlighting intangible benefits: Certainly, include all the relevant tangible payoffs you can find. However, studies indicate that intangible (i.e., non-monetary) factors often influence executive decisions more than tangibles. Spotlight intangible factors to show you understand the full enterprise value of your IT proposal. Showing a payback period of 12 months may be great, but a well-explained intangible factor such as "improving marketplace image" could help convince wavering decision-makers.
  • Bullet-proofing value statements: How you explain value is as important as what the value actually is. Reinforce value statements the same three ways your favorite TV (or real life) attorney does when making his or her case before a tough jury. (1) Define the value in simple (non-IT) terms. For example, "better data" is not a business benefit. However, making better decisions because of better data could be. (2) Clarify the cause-and-effect. For example, your "jury" may not realize that credible studies show that IT systems that increase customer, employee, supplier, and/or shareholder loyalty can improve profits. (3) Explain your evidence. Tell them why they should believe you. Use your political knowledge and Google search skills to substantiate your assertions.
  • Being a great ROI storyteller: In the final analysis, it's the value conversation that sells IT projects, not the ROI calculations. Numbers are the ante for gaining decision-maker attention. Funding, however, is won when you explain those figures in a manner executives relate to. For example, I was involved with developing a HR system justification in a firm that famous for its penny-pinching ways. Once we calculated cost savings to the CFO's satisfaction, the project won funding only because the CFO recast the payoff in terms of using a better HR system to return the firm to its glory days, an irresistible appeal to an aging and anxious chairman and founder.
  • The good news: Finding full value is mostly about management education and commitment, factors well within your control.

    --Jack Keen

    Sourabh Hajela, TAC Expert, has more than 15 years of experience in strategy, planning, and delivery of IT capability to maximize shareholder value for corporations in major industries across North America, Europe, and Asia. He is a member of the faculty at the University of Phoenix, where he teaches courses in strategy, marketing, E-business, and leadership. Most recently, he was VP and the head of E-business with Prudential Financial.

    Jack Keen, TAC Expert, is a global authority on pragmatic ROI methods, providing tools, workshops, and consulting to clients worldwide. He is co-author of the top selling book Making Technology Investments Profitable: ROI Road Map to Better Business Cases, and co-founder of The Deciding Factor Inc., a ROI consulting firm.

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