There’s never a good time to “buy software,” but it’s always a great time to make a rewarding investment!
I’ve had the privilege of working with some of the brightest audit, governance, risk and compliance (GRC) leaders in the world for nearly a decade. All too often I hear that there is no budget to buy software. I respect that this is often the case; however, how often are budgets handed out on a silver platter? In my experience, this is rarely the case.
It doesn’t matter if the price of oil is through the roof or at rock bottom; if the economy is doing well or poorly; or if the price of a proposed software investment is $1,000 or $10,000,000. When the rubber hits the road, the individual holding the purse strings wants to know: 1) when they will get their money back? and 2) what will the return on their investment be? If your business case is compelling enough, budget will be made available in virtually any economic condition.
When is the right time to invest in change?
When is the optimal time to invest in a stock: when it is overpriced or when it’s a steal? Do you buy your house when the market is peaking, or when your dollars go twice as far? When a professional athlete becomes a hero, is it when he scores when the team is up by 50 points, or when he has to storm back from a deficit to score the winning point?
If we’ve answered the latter on all three of these questions, why is it that we look any differently at investing in the software needed to become an audit, risk or compliance rockstar?
How to write a rock-solid business case for GRC technology
When constructing your business case, I advocate for partnering with the account manager in your region. You know where the risks and opportunities to add value exist in your business. Your account manager will intimately know our software and how similar companies have benefited from it.
The business cases that have worked best for the customers I’ve partnered with, consist of the following components:
1. Executive summary
A brief summary of your current state and the challenges you are facing.
2. Problem statement: Your challenges, and why they are difficult to solve with the status-quo
Until now, you’ve survived without purpose-built software. Outline how this is holding you and your organization back, and why you can’t solve the challenges with the tools at hand.
3. Cost impact of current challenges
What is the cost of doing nothing? Bucket the costs into two sections, outlining both quantitative and qualitative costs. Itemize your estimates of each cost, considering:
- time wasted on manual activities x, y and z
- time wasted on manual activities x, y and zcost of revenue leakage, profit erosion and fraud
- cost of revenue leakage, profit erosion and fraudlarge external audit costs
- large external audit costsii. Qualitative:
- risk exposure
- team moral levels / attracting top talent (tip: top talent is not often attracted to organizations with antiquated GRC tools)
- quality and consistency of audits
4. Proposed solution: Why ACL?
GRC is a competitive market. Why is ACL uniquely qualified to solve your challenges and/or help you reach your goals? Consider:
- technology capabilities (tip: weighted technology evaluation criteria checklists can help you identify and assess specific capabilities for your use case.)
- user-friendliness and portability
- time to value
- ability to integrate with analytics
- true-cloud vs. legacy on-premises
5. Breakdown of return on investment (ROI) and net present value (NPV)
- Estimate quantitative, hard dollar savings, such as:
- What is the cost to operate your internal department each year? What percentage your team’s time is exhausted on manual efforts that could be easily automated using ACL GRC? Calculate the cost of this percentage and compare it the ACL GRC investment cost.
- If you invested in the ACL Essentials AP module, how much could you potentially recover in duplicate payments?
- Outline qualitative, softer savings, such as:
- If ACL GRC could automate your manual processes, what value add projects would you take on with this newly available time?
- Calculate the NPV of the proposed solution vs. investing this budget elsewhere. I find even running this up against a 10% appreciation value, can be insightful (tip: this is what your CFO would likely do, if he or she was crunching the numbers).
- Include infographics: CFOs love graphs and charts! We have many of these on-hand to share and help you.
6. Project timeline & breakeven point
I like to break down the project implementation timeline into chronological milestones, and often present it as a linear diagram—marking the breakeven point where ROI pays its dividends. What is important is to be conservative when forecasting ROI—and to clearly identify the milestones that need to be achieved in order to achieve it.
7. Two-minute demo video
Change agents often ask me “Can you arrange for a demo for my CFO? He wants to see your software.” My experiences say otherwise: a two-minute video will suffice. CFOs are busy. He or she will likely want a quick visual of what the proposed solution looks like in action.
8. Solution options & pricing scenarios
Present your CFO with two (or maybe even three) solution option/pricing scenarios, and clearly convey the pros and cons of each. There will naturally be consequences for selecting the most inexpensive solution, however, I suggest you at least present a more economical alternative. (And if your only recourse is the most inexpensive solution, consider using this information later to build a one-, two- or three-year future expansion plan).
9. Example ACL customer case studies
It is likely that someone your CFO knows, or at least a company they know and respect, uses ACL software. Reduce your CFO’s concerns by helping him or her understand that ACL is the safe choice. Here are some example customer success stories on our website, or ask your account manager.
10. Final point
End your business case with believable ROI and NPV targets that you both can get behind.
There’s never a good time to buy software, but it’s always a great time to make a rewarding investment.
Even when your company’s revenues are soaring, your technology investments will be competing for budget for other things: new locations, fancier office furniture, acquisitions, product enhancements, additional staff and so on.
Don’t underestimate the need for and benefits of building a strong business case to invest in technology, at any time. Worst case scenario, you will build knowledge, gain respect within your organization and be front of mind when budget does become available.
Published with permission from ACL Services