Anytime you have a seemingly “free” legacy technology
environment where operating costs are low and few capital investments are
planned, it can be extremely hard to cost justify moving to a new technology
that at a minimum will require substantial capital costs.
The fact is, when you compare the cash flows of the old and
new environments, the ROI for the new one rarely pencils out to satisfy your
average fiscally focused CFO. Significant spending compared to little spending
just doesn’t make sense to these check-writing executives.
However, I’ve found that by following a two-pronged strategy,
you can often overcome this seemingly insurmountable barrier.
Prong #1: Leverage
the Time Value of Money
The first strategy assumes that something has to change. The company simply can’t operate forever an
unsupportable technology. Usually, IT approaches end-of-life (EOL) and end-of-service
(EOS) technologies by chipping away at the problem through gradual replacement over
time. This piecemeal approach eventually gets you there, but since the
transition is drawn out, it often leaves a lot of savings and value on the
table. Quantifying those gains can help accelerate a larger investment.
Take voice systems. Typically, even with EOL or EOS PBX
systems, companies won’t want to invest in more PBX systems to replace them. Modern
Unified Communications (UC) technologies are the best alternative, but fiscally
conservative companies might prefer to replace its old systems in a gradual, ad
hoc fashion.
In reality, though, a rapidly deployed UC platform can deliver
operating benefits faster than stretching out investments over a longer period
of time, and ultimately result in higher ROI. The reason is simple. Companies
that invest in a comprehensive solution start to realize operating savings from
the new technology almost immediately. The time value of money works in favor
of the fast-deployment approach and yields more total value over the same time
period.
All of this adds up to a compelling argument for a rapidly
deployed replacement of the company’s entire legacy voice platform, versus a
drawn-out ad hoc replacement strategy.
Prong #2: Build a
Strategic Business Case
The second prong of this strategy is just as powerful: Build
a convincing business case for the
value of the new technology. It’s true that many CFOs will characterize these non-monetary
value propositions as “soft benefits,” which means they’re difficult to measure
and not assured. However, many CEOs will view them favorably, especially when
they align with the company’s overarching business objectives.
When communicating the value of technology investments to
business leaders, it’s important to stay clear of technical jargon. Be sure to
tie your messages to the company’s strategic objectives, and use a business
language that C-level execs understand.
Articulating use cases
can be a big help. This is where you describe in detail how things are done
today and how they would be done in the future. The best use cases examine areas
of the business that are critical for generating revenue and describe a
critical process that’s needed to enable a successful outcome.
This strategy directly addresses the concerns of the CFO – that
is, it focuses on the real cash value
of the new investment. And it also addresses the CEO’s top priority: achieving the
company’s business objectives in the most efficient way possible.
Even if your business case only shows a break even -- or
even less than break even – financial result, it can still be approved if your
proposed investment effectively advances the company’s strategic business goals.
