February 6th, 2014
By Steffani Lomax
To continue with our series, what are the key components of a standard business case?
Executive Summary – states the reason for the business case and a high-level description of the recommendation
Business Requirements – describes the detailed needs of the business that must be addressed
Financial Analysis & Benefits – calculates the expected financial savings and/or cost avoidance and includes the Cash Flow Analysis, Payback Period and Return On Investment (ROI)
Alternatives and their Business Impact – presents additional options to the recommended approach and how these options will affect the business, both positively and negatively
Recommendations with Implementation Plan – outlines the proposed approach and specifically how it will be deployed
Timeframe to Realize Benefits – indicates the points in time that specific financial and soft benefits will occur
Typically, the financial analysis and benefits component is the most challenging section to create. In this section, it is important to include a Cash Flow Analysis, Payback Period and Return on Investment (ROI). Here are some specific tips:
Selling the Business Case
Once you have completed the business case, it is time to present it to your leadership team. Selling the business case is just as important as building it. It is important to understand and counter objections, understand each stakeholder’s reservations and have a plan of attack to address each one. Work with your champion to continue to sell after the business case is approved. Finally, prove that the recommended pilot project is delivering the expected benefits.
In conclusion, make sure that your business case addresses a pain point that the decision-makers are experiencing. Understand both the hot buttons and objections of your target audience and be in a position to address each one. Use a financial model to calculate the cost savings and factor in risk and compliance issues. Establish a pilot program that will quickly demonstrate value. Finally, measure and communicate the results of the pilot project to promote further executive buy-in and sponsorship of your ITAM program.
January 31st, 2014
By Steffani Lomax
In my last post, we examined the cost savings and risks associated with ITAM. Now let’s review the process for building the new business case for ITAM.
Find a Champion
The first step is to find a champion. A champion is a visionary, evangelist and strong advocate for the business case. He or she understands the need for the business case and serves as a catalyst to raise awareness about the initiative. The champion provides a sense of energy and passion, demonstrates why the business case is important, rallies support for the cause and helps clear the path that lies ahead.
Identify Specific Gaps in Your ITAM Program
Once you have found your champion, identify the specific gaps in your program that need to be filled. Do you have enough skilled resources? Does your organization lack processes to track and manage IT assets through their entire lifecycle? Do you need more robust tools to discover IT assets, manage contracts and software licensing, and meter software usage? Do you have a repository in place that houses all your IT asset records? Is there adequate integration of existing processes and tools?
Know Your Audience
After identifying the specific gaps that need to be addressed, take the time to fully understand the point of view of your audience so that you can tailor a sales pitch that will resonate. Who is your audience? Do you have one audience, or multiple targets? The CIO, CTO, CFO, VP of IT Operations, VP of Procurement and IT General Counsel are examples of possible stakeholders who will need to hear and respond to your message. It will be important to identify and understand their pain points or hot buttons to build a convincing case. Consider building a unique sales pitch for each target audience.
Calculate the Cost and Risk of Doing Nothing
Presenting the cost and risk of doing nothing will draw attention to your business case. For example, failing an audit leads to unbudgeted and potentially unnecessary spending. Overpaying maintenance on software that is not being used creates an unnecessary expense. Entering into a negotiation with a leading supplier without complete, accurate information about your IT assets will probably result in unfavorable terms and pricing. Finally, being found guilty of non-compliance can lead to financial and legal issues for your company.
Recommend a Pilot Program
The next step is to recommend a pilot program that will demonstrate a quick win. Determining your compliance position with a leading software supplier in advance of an audit or contract negotiation presents a great opportunity to demonstrate cost avoidance. Performing a self-audit for IBM, Microsoft or Adobe licensing is a great way to begin since it will typically uncover some level of unnecessary spending. Is there a better way to demonstrate the value of your ITAM program?
Following the process we just described will help change the perception of ITAM from a cost center to an investment in the business. A cost center implies a reactive approach, while an investment involves the type of proactive approach indicative of the maturity level you will need to achieve with your ITAM program.
In my final post in this series, I will discuss the components of a business case.
January 2nd, 2014
By Steffani Lomax
IT Asset Management (ITAM) is the process for tracking and reporting the value and ownership of financial assets throughout their lifecycle. In order to better manage and optimize their IT assets and benefit from significant cost savings, risk reduction and greater business efficiencies, organizations should embrace and implement this discipline. When companies fail to take ITAM seriously, they are simply rolling the dice and leaving everything to chance.
Many IT Asset Managers wish to improve their ITAM programs; however, they struggle with obtaining executive buy-in, sponsorship and funding to make this happen. What are the common internal obstacles? Do any of these objections sound familiar?
“Our leadership team doesn’t see the benefits of investing in a formal ITAM program.”
“We don’t have enough resources, and our existing team is already overburdened.”
“We can’t get budget approval to bring in better tools.”
The underlying issue is that many senior executives view ITAM as a cost burden rather than an investment in their business. Due to this pervasive point of view, the IT Asset Manager must prove and communicate the ITAM value proposition: that a solid ITAM program will lead to significant cost avoidance and savings opportunities, and represents an investment in the business. The IT Asset Manager must develop a strong business case to gain executive buy-in and sponsorship, educating the leadership team about the organization’s ITAM requirements, expected benefits, risks and ROI. What are the steps the IT Asset Manager needs to take to generate a new, more compelling business case for ITAM?
As a first step, let’s review some important industry statistics that have appeared recently in the publications and presentations of a leading IT industry analyst firm:
Each of these individual statistics alone is compelling; together, they are staggering.
Another compelling statistic was presented at the SAM Summit 2013 in Chicago, where a panel of executives from Fortune 500 companies stated that their ITAM teams spend 50 – 70% of their time on software audits annually. These statistics alone demonstrate the critical importance of a robust ITAM program, and can be incorporated into the body of a business case.
Savings from a Robust ITAM Program
A company that establishes a formal ITAM program will realize significant cost avoidance and savings opportunities. What are the key areas where these savings can be found?
Risk of Doing Nothing
Not only are there significant cost savings associated with improving an ITAM program, but there are also risks associated with doing nothing. What are the major risks?
In part II of this 3-part series, we will review the steps to building the new business case for ITAM.