A large manufacturing client of mine recently completed a software evaluation and selection process. The project stakeholders used a set of objective evaluation and selection criteria to arrive at a decision. Interestingly, these criteria did NOT include cost. If in, the final evaluation two software solutions were rated equal, then cost could be a deciding factor. My client and the software vendor were excited to move forward with implementation at warp-speed, as the clock was ticking towards internal deadlines.
Since the EHS business and IT sponsors kept the executive suite updated, it looked as if formal approval would be easy. The company had strong business drivers regardless of the project cost. Of course, no project has unlimited funds. In the end, the project was approved–only after a lot of number-crunching and many revisions to the executive presentation.
Why? Executives run the business using performance-based metrics. Most C-level executives are trained to value a project based on “hard numbers” metrics such as cost saving, cost avoidance and Return on Investment. Often, they dismiss the value of compelling “soft numbers” associated with benefits that are harder to quantify, such as making decisions based upon solid data, the ability for users to adopt (and gladly use) the software, data entry at the point of activity, and productivity gains from EHS process automation, self-service reports and dashboards.
Prepare a compelling business case based upon a good understanding of your business. While this does not require exhaustive research, you need to know where to look.
- Keep it simple. Find 2-3 relevant “hard numbers” cost avoidance and cost savings examples. These savings alone could pay for the project in 3-5 years.
- Consider the total cost of ownership (TCO). This includes software license/subscription, maintenance and implementation fees PLUS the cost of internal EHS and IT resources, external consultants, hardware and other expenses over the lifetime of the software. Many organizations have tunnel vision and compare only license and implementation costs; TCO allows a more realistic and credible evaluation.
- Avoid selecting the low-cost option just to save a few dollars. If the software fits current, near-term and long-term needs, then it may be a good option. Reread item 2 above. You may wish that you had chosen a more “expensive” option, as it would save effort and money over the life of the software.
- When in doubt, seek expert advice. Seek assistance if you lack the know-how to prepare a business case for C-level or Board approval. The skills needed to develop a business case are very different from the skills needed to administer the software after implementation. This expertise may lie within or outside of your organization.
While dollars still drive EHS software decisions, look at the bigger picture. You will be glad you did!