Software business case 2.0

I was musing with a colleague the other day about building a business case for purchasing software and where the real value was in software implementation. I've used a methodology for years when I worked for software vendors that assisted prospects in establishing the what, why and how of the proposed software project. The basic process involved a consulting engagement that assisted the prospect in establishing their current business state, best practices for the specific industry vertical (benchmarks) and the future state of the business after the proposed project was completed. In evaluating the proposed project I used four criteria: 1. revenue, 2. cost, 3. quality and 4. innovation. The subsequent business case we developed used the four criteria and applied them to the future state to demonstrate the value of the project to the business. We looked for some combination of the criteria to use as the justification for the cost of the project. Many times this took the form of a return on investment (ROI) calculation, because, face it, that's what executives wanted to hear…that the proposed project would pay for itself in X amount of time in increased revenue or decreased cost (or the Holy Grail, both). On the softer return side you had quality or innovation, often much harder to quantify (not always though, increased innovation might be demonstrated, for example, by bringing more compelling products to market faster; increased quality might reduce scrap costs, etc.).

Lately I've started to think that the original four criteria are not the only factors any more, that something else is starting to emerge that could be used to establish value. I'm more involved in using social media tools over the last two years, so maybe that's impacting my thinking more, a good thing. I also have come to believe that Web 2.0-like tools should be used in the enterprise, so again that's opened me up to some different thinking. So at this point I'd add a fifth criteria, intimacy to my list. Intimacy can be applied to new projects to gage the increase in dialog, engagement, and interaction in an ecosystem. This might be most obvious when applied to Social CRM tools, which by their design increase customer intimacy but the term could also be used in a supply / design chain or perhaps in a partner ecosystem as well. Applying Enterprise 2.0 tools in the enterprise to increase intimacy. I will admit that I'm still in the early stages of thinking this metric through, but I'm convinced that this is an important new part of evaluating the value of a prospective software project.

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