As a sales professional in the technology industry, you decide what resources to apply to which opportunities. Often a simple quote or proposal is all you need. Another tool in your bag is a third-party business case.
But how do you decide when it’s appropriate to use this relatively expensive and time-consuming tool? Here are five situations where a professionally developed business case can help you win the deal:
1. When the decision is being made above your level of effective influence.
Most organizations have thresholds of approval. Perhaps the CIO can authorize up to $500,000 with bigger investments going to the CEO or board for approval. If you have solid relationships at the approval level and are able to present your offer directly, you may be fine.
If the approver is above your sphere of influence, you will be relying on others to make your case. If you have faith in the person making the presentation – they are knowledgeable, influential and motivated – then your proposal may be enough. If not, you need to put your best foot forward.
A professionally developed business case helps. Your sponsor, armed with a detailed and objective business case, can make a more effective presentation. Often the third-party consultant is viewed as a disinterested party and is trusted to offer opinions and facts in support of the case, sometimes directly to the approver.
2. When capital is tight.
Customers often cry poor when negotiating tech purchases. But sometimes things really are tight. A business case shifts the discussion from the capital cost of your solution to its financial benefits. You go from talking about discounts to talking about how fast the system can be implemented so that your customer will receive its benefits sooner.
Note that a business case is not always the right answer. If the customer wants your system but truly doesn’t have the cash, you might consider a financing alternative. A leasing quote is a lot quicker and cheaper to produce than a good business case.
Companies that are struggling can be good candidates for a business case. They are looking for savings in a hurry and a business case may show them exactly that. Without the case, your proposal is just another cost in an environment where costs are bad.
3. When you can eat someone else’s lunch.
A business case looks at every expense associated with your solution. Many of these are not checks being written to your company. For example, savings from Unified Communications come from long distance, local service, conferencing, etc. These reductions pay for the UC system. The losers are the service providers. Similarly, if you can show savings in real estate the losers are landlords, travel reductions come out of various airlines’ revenue streams, etc.
Operating cost reductions quickly outweigh capital costs. Mainstay often sees operational savings of five times the capital outlay or more. A good business case illustrates this clearly; a simple proposal for your solution does not.
4. When a competitor is making the offer.
There is an old joke about running from a bear – you need not outrun the bear, only the others in your party. If a competitor is offering a business case, you need to offer a better one. Don’t assume that the competitor’s case will be objective, or competently produced – it may simply be a proposal in disguise. It’s always in your best interest to control what your customer sees and hears about your solution.
5. When there are many parties involved besides the customer.
Some deals have many players; your company, a partner, an integrator, an outsourcer, other technology suppliers possibly including direct competitors. Sometimes the customer is not a single organization as with a joint venture. In these cases, bringing in an objective consultant to develop a business case can be very helpful. The consultant can maintain confidentiality between the parties. The business case development process shifts the focus away from each party’s self-interest to the interest of the ultimate customer. Mainstay has found that this shift in focus often incents the various players to cooperate.
The business case that is developed in these conditions will strive to represent the best possible combination for the ultimate buyer. You may not get 100% of your desired share. But as the saying goes, “50% of something is better than 100% of nothing”.