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Selling a Return on Investment

April 15, 2011

I often remind my team: ‘if we are not selling a ROI for the benefit of our customers, then we are in the wrong business’

Every solution should be birthed in ROI. When a customer approaches us for a Business Intelligence solution and they say ‘I need a report’, the subtitles that I read are ‘I have identified an area in my business that would benefit from automation; I need rapid access to customized information to make profit driving decisions; word on the street is that you can make this happen for me and within a reasonable period of time, I would like to see a ROI’

So Financial Managers will teach us that they use NPV or IRR to calculate an acceptable projected ROI for capital investments. In doing so, the confidence and peace of mind of management with respect to the project is directly proportionate to the trustworthiness on the inputs, viz a vie, total cash outflow for the project. In the Accounting / Business Intelligence Solutions space, companies employ consultants to get the job done.

But getting the job done may have different meanings to the customer than they do to the consultant. Many times the consultant believes that the customer will be impressed by all the technical skills brought to the project but in fact the customer wants to assurance that the outcomes be fully understood and that the solution is delivered within the project constraints and contains all the features that will ensure a the expected ROI. One of the unspoken expectations that I believe customers have of consultants is that they buy into the ultimate objective of a target ROI and that this guide the sections within the project. So, if this is true, then as consultants it is important to understand that part of what we are being employed to do is to mitigate the downside risk of our customers underestimating the true cost of projects.

And for those consultants who believe that this forms part of their responsibility to the customer, you know all to well that you are now compelled to abandon any of these phrases: 1) ‘let’s see how the project goes and in the meantime we will just bill you for the time spent’ 2) ‘We do not fully understand the desired outcome but I estimate this solution to cost $x’ 3) ‘we should give you a software demo asap’ 4) ‘we will order the software so long and concurrently assess what it is you really need’ 5) ‘I estimate the solution to cost $x but will bill you for actual hours spent’

As a customer, what I want to hear is ‘Mr. Customer, we appreciate your trust in our abilities; we want to fully understand your desired solution and how exactly it will benefit your organization; once we understand this, we intend to commit ourselves to that end by providing a solution and recommendations based on our expertise in this field; all investments into this solution will be quantified by us and communicated to you after gaining a common understanding of the desired solution and before building the solution.’

I found an article written by Ed Kless referring to a Sage business partner (Aries Technology Group) who to date I have not yet had the honor of working with. This article and associated video summarizes a few of the concepts above very well.

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One comment

  1. It’s very Important to take car of ROI



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