As a software implementation becomes broader- and more expensive- it gets more challenging to pin down the business benefits produced. It's a battle to quantify “hard” benefits that can be counted as straightforwardly as manufacturing statistics.
There’s a reason for that: The primary benefit of technology is productivity improvement.
Nucleus Research writes that “Increased worker efficiency is one of the primary benefits of technology. If you don’t believe in indirect benefits, you probably shouldn’t have purchased computers for your staff.”
A smug statement maybe, but let’s explore the concept further.
Productivity Gains are "King"...
The formula for measuring productivity is simple and straightforward- it's not a mystery to anyone- yet almost no one employs it when trying to improve it.
All the world understands and agrees that:
Productivity = Output / Input
But we don't all agree on the ways to impact that equation and increase productivity. Let's keep it uncomplicated. Productivity increases under either of the following conditions:
- Output increases with constant input
- Input decreases with constant output
Now here is where the software comes in. Different classes of software make productivity improvement possible from either direction:
Authoring software tools like word processing and computer-aided design (CAD) applications allow more intelligence and content to be built into their work products than their paper-and-pencil counterparts once did. Output increases.
Management software tools like document and product structure databases capture those work products and allow them to be secured, shared, and reused many times over, expanding their impact dramatically. Input decreases.
... and Realizable Benefits Are "Queen"
Even if you have never heard of these classes of software before, you can probably still see where this is going. It’s evident that software capabilities and productivity metrics are closely tied.
So here's the problem that many companies face when justifying software implementations with productivity improvements: these kinds of benefits are often referred to as “soft,” “indirect,” or “intangible.”
They are not the “hard” benefits that they are trying to quantify. So how can we better define productivity improvement in the customer's terms?
Start from the premise that a benefit is a means to accomplishing a goal.
This benefit brings the client closer to fulfilling a strategy. No matter what approach we take, they all boil down to justifying software benefits by linking their capabilities back to the problems resolved and the business goals achieved.
To raise the relevance of software benefits in the client's mind and measure productivity in the real world, ask them:
- Why are your stated goals important?
- What gains do you expect will be generated by meeting these goals?
- How else would these goals be accomplished without software?
- Is there a more effective, higher ROI approach to meeting these goals than implementing software?
That's how to link your offering's capabilities with strategic business enablers the customer must have.
This is a powerful way to demonstrate value to customers. Have you found a different way? What approach to communicating value has been most successful for you?