Building the Business Case (Part 4) – Gaining Alignment
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In the previous installments of this series, we covered three key drivers for building your business case: Risk Management, Cost Reduction, and Revenue Growth.
Now, we’ll review the importance of and the process for gaining organizational alignment with your strategy.
When you’re building support for your business case, it’s critical to gain alignment at all levels of the organization throughout the whole process. Making the case for an information management strategy cannot rest with only one executive. And it can’t be the brainchild of IT only, or lack executive sponsorship altogether.
You need as many areas aligned as possible. More than likely, a comprehensive information management strategy needs to consider all of the data streams across the enterprise (at some point), and will therefore be fairly time and resource intensive.
If you take a three-pronged approach to gaining alignment, then you’re well on your way to obtaining approval to implement your strategy:
(1) Get front-line employees and customers to identify the problems with the data. You should have been gathering their feedback and facts as you built your case. So when you can readily articulate that customers are frustrated with your company, or that your employees are performing workarounds, rework, or aren’t as effective as they could be, then you’ve got your “first-level buy in”.
(2) You need their individual management teams to agree that these issues exist. They need to agree that they’d be more effective in achieving their goals if they had a solution to their information problems. And most importantly, if you can get them to agree that an information management strategy should be a priority and they support the contents of the business case (which shouldn’t be too difficult if you had their support during the development of the business case), then these folks become your best allies.
(3) Have those management teams bring this message forward to their leadership. When the leaders hear, directly from their own people, that they should understand and support the business case, then your business case has achieved a level of credibility you wouldn’t have gained on your own. And your role then becomes one of subject matter expert, business case developer, and valued business partner.
I do recommend getting several executives aligned to the strategy. Because of the size of the undertaking, you’ll need several leaders to prioritize and support the effort. Providing headcount, funding and the time to deliver on the plan will be crucial from these leaders.
Once again, the more compelling your business case (whether it’s to comply with regulations, reduce costs or improve revenues), the more chance you’ll have in gaining attention and alignment.
Which brings us to the final point: set up your program so that small wins are achieved throughout.
Whether you need to set up prototypes, pilots, or small projects while you are driving the entire strategy over time (probably several years), you need to prove results. Otherwise, no matter how great your plan, the organization will lose interest along the way.
So, if you set expectations appropriately, have a good measurement plan in place, and keep communicating constantly with all levels of the organization, then you’ve got a great chance of succeeding!
Building the Business Case (Part 3) – Revenue Growth
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Business Growth is really the heart of your business case. If you can identify how an Information Management strategy will enable your company’s growth, then your chances of success go way up!
This topic may be a little more difficult to document, but most executives will not argue with you if you can validate your premises.
Start by looking at existing strategic initiatives, then meet with the business areas responsible for those results and see if issues with the current corporate data could prevent them from achieving their goals.
Let’s look at the types of growth enablers you might consider:
• Mergers & Acquisitions
• Customer Service / Experience
• Customer Targeting
• Customer Coverage
• Forecasting / Planning / Modeling / Reporting
• Product / Service Offering
• Channel Strategies
• International Strategies
Questions you might ask your internal partners are: “Could you be more effective at getting your marketing materials to the right person?” “Could you improve targeting or forecasting through improved reporting, modeling or planning efforts?” “Could you improve the customer coverage model if we could more effectively identify and target customers?” “Are we failing the customer because processes are operating with bad data?” “Are there channel conflicts due to multiple or uncontrolled data sources?” “If you had better business intelligence, would you have a better chance of bringing the right product or service to market?”
If you get “yes” answers, then determine the benefits and the order of magnitude if you had a solution. Types of solutions could be through solving problems with data quality, hierarchy management, data integration, and resolving data source conflicts (through a Single Source of Truth), etc.
By helping business leaders frame their problems in terms of how an Information Management strategy could help them, then you’ve got the beginnings of a strong business case.
Your next step is to define the business requirements in more detail, and have your internal business partner(s) help you quantify the impact of solving their problems.
Stay tuned for Part 4, where Maureen Butler covers how to get organizational alignment for your business plan.
Building the Business Case (Part 2) – Cost Reduction
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When it comes to building the case for an Information Management strategy, cost reductions alone may generate enough benefits to justify your business case, or they could further enhance your economic arguments.
Here are some examples of where you may uncover potential cost reductions:
1) IT costs, such as managing redundant systems/databases, data duplication and/or reconciliation, consulting fees, and software maintenance fees
2) Delivery costs due to inaccurate data, such as product returns, shipping fines, direct marketing waste, returned employee mailings, and Day Sales Outstanding (DSO) costs from invoicing delays
3) Productivity costs due to inefficient processes creating workarounds, redundancy, or rework. Also consider costs associated with audits, time to search for customer records, and time wasted matching customer files
Start by interviewing internal business partners to determine where they have issues. If your partners identify problems and participate in the business case development, they’ll have a vested interest in supporting it. Here are some business areas to consider:
- Finance / Credit / Accounting
- Sales / Contracts
- Corporate Development / Mergers & Acquisitions
- Marketing
- E-Commerce
- Customer Service / Call Center
- Operations / Production
- Human Resources
- Product / Vendor Management
- Merchandising
- IT
Ways to identify and measure costs include:
- Quantify shipping fines, returns, or other operational expenses
- Quantify mail return rate, response rate, and delivery hit rate (did the mailing actually make it to the intended person?) Check with Direct Marketing, HR, Finance/Accounting/Credit, Mailroom, or any other outbound mail services for these costs.
- Identify rework or workaround activities such as returned mail, product, and invoice corrections, product information corrections, report reconciliation, multiple databases, merge/purge and data matching errors, etc. Some partners, both leadership and end users, may accept this as ‘business as usual’, so be careful not to appear threatening or overly challenging.
- Conduct process mapping or other continuous improvement activities to identify & quantify problem areas. Always keep a broad perspective and analyze both up and down-stream processes.
- Conduct time studies on processes or transactions that appear inefficient such as customer service, warehouse, manufacturing, vendor management, payroll, reporting, data management, selling, marketing, planning, forecasting, customer maintenance, mergers and acquisition, etc.
- Conduct satisfaction surveys to measure customers’ experience with duplicate mailings, wrong customer information, delayed shipments due to bad data, credit problems, customer look-up time, etc.
- Work with UPS, USPS, FedEx and other carriers to determine how to improve shipping/postal rates
Cost improvement opportunities will exist all around the business; the trick is determining where you will get the “big wins”. It’s good to have a Finance partner participate throughout this process, so your assumptions and calculations are ‘blessed’.
To find out how to identify business growth opportunities and align business leaders, stay tuned for the next two articles in this series by Maureen Butler.
Building the Business Case (Part 1) – Risk Management
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When you’re building the business case for an Information Management strategy such as MDM, CDI, Data Governance, or Data Quality, start by articulating the business problems or opportunities. By building a compelling case and getting executive sponsorship, you’ll have a stronger chance of gaining organizational priority, funding and resources.
This 4-part series will review typical business challenges and provide pointers on how to make a compelling case for an Information Management strategy.
Part I: Risk Management
If your company’s leadership team is strongly focused on business risks, then focusing the business case on Risk Management is a good start. The following are some typical risk management issues:
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Regulatory Compliance such as financial reporting, Sarbanes-Oxley, environmental
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Legal Compliance such as contracts, pricing, compensation, privacy, human resources
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Other concerns, including diversity programs, quality programs, business system performance, etc.
Your business case should identify specific risks that are of concern to the executive team:
- Reporting discrepancies, inaccuracies, gaps, timeliness, lack of reporting, etc.
- Lawsuits / litigation
- Audit risks and/or audit findings
- Loss of certifications
- System performance, data archiving/retrieval
- Company reputation
Whenever possible, quantify existing or potential costs if risks are not mitigated or eliminated:
- External and internal audit costs
- Fines / penalties / legal costs
- Reporting inaccuracies
- Lack of standards, controls, policies, processes, procedures
- Workarounds, rework and other quantifiable process inefficiencies
Determine which business partners could be your allies. The more you engage, the stronger your business case and the easier it is to get leadership support. Examples include:
- Legal
- Internal Audit
- Finance
- Sales / Contracts
- Human Resources
- IT
- Quality
Risk Management is a great place to start, but if your organization doesn’t have compelling risk-related issues for some reason, or if you need to enhance your business case further, stay tuned for the next 3 articles in this series by Maureen Butler to find out more.
