Measuring Value

Measuring Value

You are two years or more after implementing an enterprise software solution and you get the question, usually at renewal, and usually by someone in procurement: Why the hell am I paying this much for this software? (or some version of that). If you do get that question, it’s convenient to have a good response already prepared.

Even better, it’s good to know you are going to get asked this question well before you get asked it. The following steps will help prepare.

Step One.

Always Baseline. Before you get into any software implementation – measure all of your current stats (headcount, throughput, level of effort, lost time – anything that will eventually prove out the value of the software.

Step Two.

Establish Value on the User level. What is critical to your end-users? Why would someone use the new software? What pain are you addressing? What gain will they see from using the software? The hope is that using the new software will address some pain or make their work more efficient. The key to establishing a value on the user-level is knowing your end-users and being able to answer – What’s in it for them?

Step Three.

Departmental Value. What is critical to your departmental leaders? Are there metrics that need to be reported? What will quarter-over-quarter data help tell the story? The intent with departmental value is to show the efficiencies gained with the new software. Have projects, processes, or people become more efficient, allowing for greater throughput? The key to this stage is gathering the data that show throughput and quarter-over-quarter progress.

Step Four.

Executive Value. What are KPIs (Key Performance Indications) critical at the executive level? What strategies/goals are improved with the introduction or expansion of the software? The key to proving Executive value is to show critical, strategic metrics. If you don’t know that, proving the dollar savings is a good start.

In the end, value is particular to your organization and the level of the person inquiring (individual, departmental, and executive). It’s helpful always to predict these questions and have answers/metrics prepared in advance.

Supporting Music

Black Horse and Cherry Tree – KT Tunstall

Royals – Lorde

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