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- October 27, 2014
- Mary Flynn
- Business Strategy
After transitioning into sales from leading a Customer Success organization for several years, I’ve gained some unique insights about what makes an enterprise software project succeed or fail.
Many customers think that success begins at the start of an implementation, or on day one of go live. In my experience, success starts at the very beginning, the moment you realize you have a problem and begin thinking about your project and talking to vendors.
Having watched hundreds of customers on their success journey, a handful of similarities stand out as leading indicators of success or failure. These are usually present from the outset, so much so that I’ve gotten to where I can almost predict by the priorities presented in the first meeting what the project is likely to look like in 12-18 months. Will it be delivering the hoped for return on investment and making the team look like heroes and candidates for promotion, or will they be struggling to revalidate the project and justify their decision?
The first conversation is a key indicator of which outcome is more likely. If it’s all about features and functions, checking off boxes on a wish list or buying a solution to quiet complaining, that’s a bad sign. It tells me the company has not yet clearly defined their goals. They’re taking off on a journey without a clear destination, so they’re likely to be distracted by problems, inputs, and competing priorities that come up during the evaluation process. When that happens, they run a high risk of choosing the wrong solution and having to start all over.
A Very Expensive Miss
One recent customer comes to mind as a textbook example of this. His goal when he started evaluating software was to reduce wasted inventory. But, the project turned into a feature and function wish list that tried to integrate every system across the company. The team lost sight of their original goal. Their project was a failure within a year and the evaluation began again. He described it to me as a “very expensive miss.”
Boeing’s $30M purchase of database technology from Oracle, which stood for many years as the largest sale in software history, is a well-known textbook example of an enterprise software success. Boeing could have continued to produce planes and operate as they always had. Their technology investment made it possible for them to speed up manufacturing, cut costs and at the same time provide better quality, delivering a competitive advantage for their customers.
Boeing quantified the success of their project by pre-determining the exact profitability and production points at which they would be able to take market share from their largest competitor. The projected increase in profits that resulted made their technology investment seem small by comparison.
What was the difference between Boeing’s successful project and my customer’s very expensive miss? They went into the process with all of the three leading indicators I’ve seen in the most successful projects. They had:
- A clear vision of the future
- A clear, metrics-based definition of success
- A clear understanding of the project’s impact on profitability
By defining these three things before the evaluation began, Boeing was immediately on the path to success and had a set of benchmarks to hold the vendor to over the entire course of the relationship.
To understand how you can avoid an expensive miss and deliver a project with an ROI that dwarfs cost, let’s dive deeper into each of these three elements.
A Clear Vision of the Future
A detailed understanding of how your project will impact the daily life of the key players in your organization is critical. A goal such as reducing wasted inventory is a good start, but it’s still too vague. How would that impact people’s ability to do their jobs? How will it change their workflow and how they spend their time each day? You need to create a detailed before and after scenario.
For example, I work with many customers in the healthcare and oil and gas industries. A common pain point is having highly skilled, highly paid employees spending excessive amounts of their time trading voicemails and emails to acquire needed materials to do their work. What would their days look like if they spent less time on administrative tasks and more time doing what they are uniquely qualified to do? What would that look like for the company?
Put a number on it
Implementing software to improve a process requires change management and costly IT hours. How do you stay on track towards that future state? The answer is surprisingly simple: Define it in real numbers.
Without quantifying the “after” scenario, projects can stall before they reach success. “Improve efficiency” doesn’t stand a chance in a prioritization process where there are hard numbers attached to IT and change management and you have other projects with more clearly defined benefits competing for resources.
The key is to put numbers on your before and after scenarios, as we did for this customer. We were able to translate a 40% process efficiency improvement into a time savings equal to the annual productivity of 100 engineers. For a company with about 1000 engineers, the impact would be like hiring 10% more engineers—without adding actual headcount.
This helped place the IT and project support costs in context and let everyone see that this project would pay off much more quickly than others that had been given higher priority. The vision of saving more than 190,000 hours of field time every year kept the everyone focused and driving towards that goal.
What is your end game? Improved process times? Financial savings? Increased revenue? Whatever it is, these goals need to be stated in actual numbers that you discuss with vendors up front. This gives you a simple framework for evaluating vendors, for keeping everyone on track and for demonstrating the success of your project.
Stay Focused on Profit Impact
Let’s think about how leadership is measured. According to research by the Hay Group, more than 50% of the average CEO’s compensation is based on a company’s financial performance. You can bet your CEO is always thinking about costs, productivity and profit.
Think like a CEO. Think about the big picture. How does your project contribute to the company’s bottom line? In the example above, the company will be able to complete more jobs with the same resources, thereby improving the bottom line.
Conversations about bottom-line impact need to happen at the start of an evaluation, and they need to include vendors and all internal stakeholders to ensure the project is a success and not an “expensive miss.”
An enterprise technology project is a journey. Every journey starts with a destination. Define your destination as clearly as you possibly can. Paint a picture of the future and support it with numbers that tie directly into a positive impact on the company’s bottom line. By doing so you’ll have created a map that you and your vendor of choice can follow right to the treasure chest.
Mary Flynn is Enterprise Accounts Director for Coupa Software.