The challenge of building a Business Case for CAPEX investments with high intangible content, i.e., IoT, professional services and operational excellence, remains difficult. Many also argue that disruptive new business models are making the old ways irrelevant.
Hence, we simply must make the investment to remain competitive. After all, everyone is doing it. A matter of faith! The returns are huge (just look at this white paper).
To some extent technological based business model disruption has always been true, certainly throughout the industrial and cyber revolutions of the last 200 years or so. However, one of the major issues with technological change is the nature of the cultural differences between the technologists and those who write the checks.
We have previously described organizational culture as partly a function of an Interdisciplinary Common Vocabulary (ICV). One can look at the gap between advocates of new technologies and/or business models and the “C” suite as the lack of shared ICV. This gap may become egregious during economic downturns when financial concerns overtake strategy.
Making Your Case
As a junior sales representative and later ‘pitching’ CAPEX projects to management, I often presented the ‘Feature—Benefit’ of my suite of products and services. My success rate was on par with my peers, but the case could be made that I was no better than average. We all had weak value propositions.
While I did not know it at the time, my sales ‘ah ha’ moment happened when the department of head for an Engineering, Procurement and Construction (EPIC) firm with a refinery rebuild project asked me if he would get promoted if he bought from me. Dah, what did that have to do with anything I wondered. I have great features and benefits.
At least as good as my multiple competitors. Moreover, I could lower my price and give him great value.
Once we understood his CSFs, we won a multimillion dollar (high margin) deal. His problem was not the technology. All competitive specs and price points were tightly grouped. Almost any reputable vendor would do.
His key problem were project milestones! He did not want a pile of products to be assembled. He need solutions to meet deadlines and we could deliver against that critical path. That was the value proposition he needed. By the way, he got promoted!
I have seen this phenomenon often, including earlier this month. Sales people and internal proponents of new ideas often focus on the new hot stuff, for which many competitors vie. The current crazes include IoT, Blockchain, Operational Excellence to name a few.
How many suppliers of these technologies and methods are there and how are they differentiated? Lots and poorly would be my bet and experience.
C Suite Value
The stereotypical ‘hard nose’ businessman or businesswoman is alive and well. He and she live in the C suite and boardroom. Preaching features and benefits, PPT bullet points of value or use case with glossary, poorly articulated and often unbelievable claims will make for a short meeting.
Proponents of big, disruptive or simply expensive ideas can have their ‘ah ha’ moment too. Who is the audience and what are their drivers that can you facilitate? In a previous blog this author took umbrage with sales cold calls who wanted to meet, waste my time and “learn about my company.”
In other words what I hear is, I don’t have time to do my homework before I meet the economic buyer. Another deal closing strategy! Not.
In an invited Guest Editorial for the Professional Petroleum Data Management Association (PPDM) online magazine, Foundations we had the privilege to post a short article. In How to Make The Case To the C-Suite: Selling Large Scale Data Management Project to the C Suite, we present a short overview of this process. The magazine (Vol 5, Issue 2) is free; all one has to do is sign up as a Guest.
The article tells the story of a hypothetical Chief Data Scientist as she prepares for a presentation to the Chief Financial Officer. Readers will see that for some concerns management has, she has a lot of homework and preparation to do. One would expect that much of this work is outside her comfort zone, but necessary.
Driving Success
In our hypothetical case, she has the prep work in addition to her so-called ‘day job,’ a problem most have. Additionally, she must align with their ICV and move away from ‘data speak.’
Since 2004, we have used our Economic Value Proposition Matrix ® (EVPM) to help guide this process for a wide range of large projects (including security). A free version is available. Your invited to check it out and contact us if you have any questions.
When the economic cycle is at a low point, it is hard to sell new projects. When the cycle is active, there are competing projects. Throwing money at technology has failed time and time again and ruined many careers (the antithetical of ‘getting promoted’). Building a solid business case in the ICV of senior executives is a step towards accelerating one’s career, closing a deal or enjoying a project rather than fighting every step.
One final point, when one reads statements such as, “Our software will save you 50%” they are not true on their face and management never believes them. So never make those claims no matter the authority of their source. Sometimes the value can be greater. To find out the secret look at our webpage for the answer.
Good Selling to the Top Dogs!
Further Reading
The author and others have published extensively on this subject. The list of appropriate articles and papers is too extensive to list here. However, readers are invited to peruse Dr. Shemwell’s extensive list of blogs and publications.