How to Build a Winning ERP Cloud Business Case
Posted by Shelby Klingerman
- Last updated 11/09/20
Jim Maholic, Business Value Services, Oracle, wrote about how to build a winning ERP Cloud business case that will win over your company’s executives and convince them to make the move to ERP Cloud.
Whether you are planning to upgrade a departmental solution, move one or two solutions from on-premises to the Cloud, or embark on a full-scale digital transformation, your executives will likely expect you to explain how the company will benefit from investing in this initiative. This will require you to build a winning ERP Cloud business case to present to your organization’s leaders.
Admittedly, some new projects can launch without a business case, and a business case alone does not guarantee that your funding will get approved. Additionally, a bad business case will always compromise your credibility. Without credibility, your justification for your proposed project is automatically weakened—possibly even damaged. A bad business case means one that is poorly organized, poorly written, and does not reach the proper conclusions. It will look like was nonsensically thrown together. Therefore, if you’re looking to create a persuasive business case, it’s important that you take the time to do it well.
Keep in mind that a business case is about your business—it’s not called a “technology case.” If that were the case, you would simply list off all of the technical benefits of the technology, technical virtues of your proposal, and your funding would be granted. Business is about money—making more than you spend and spending effectively so you can do more with what you already have or spend much less for the same productive output. A winning ERP Cloud business case will focus on how ERP Cloud will help your company achieve those goals and explain more than just the technical aspect of the implementation.
Two key parts of building a winning ERP Cloud business case include:
- Including four categories of tangible benefits
- Avoiding flawed assumptions
Four Categories of Tangible Benefits in Your ERP Cloud Business Case
One of the biggest challenges for project managers is thoroughly identifying all of the benefits of a proposed project and ascribing credible, tangible, financial value to those benefits. To be clear, those tangible benefits must be quantified and fall into one of four categories:
- Increase revenue
- Cut costs
- Optimize assets
- Mitigate real (not imagined) risks
The four categories are critical to the success of an ERP Cloud business case.
As a baseline, nearly every project manager can estimate the cost of a project. For example, a software project will have several common cost components, each of which can be computed. These components include:
- The cost of the software (or subscription services)
- The cost of requisite implementation services
- The cost of training the users on how to effectively use the software
- The cost of annual support
In the on-premises world, this list might have included the cost of hardware upgrades that are necessary to run the new software. However, the Cloud doesn’t require you to buy hardware, so it’s a cost that doesn’t apply here.
Once estimates are made, you can get a firm grip on the cost of your ERP Cloud project. After you come up with a number, it’s important to present an incentive to spend that amount of money. To do so, identify tangible, financial benefits that the organization will realize if it successfully implements this ERP Cloud project. This is where many business cases fall flat.
Most business cases do quite well at computing the costs and narrating the various benefits. However, they often fall short on providing crisp, credible financial benefit numbers that stand up to scrutiny. The challenge that you will face is that you must write your business case in a way that is an effective selling tool in your absence. Your ERP Cloud business case must be able to sell itself without requiring your presence to narrate every bullet point. Part of achieving that selling effectiveness is derived from having the benefits expressed in financial terms, not just in narrative terms.
If on the benefit side of the ledger, you only come up with good narrative benefits (e.g. employee productivity improvements, customer satisfaction improvements, replacement of a “burning platform,” etc.), your business case will appear to have little tangible value (or return) against a list of very tangible costs (investments). This makes your ROI uninspiring, and your ERP Cloud business case will likely fail to gain approval.
The challenge in front of you is to identify, calculate, and communicate benefits—especially the value of those benefits—in a way that is credible, measurable, and supportable.
Avoiding Flawed Assumptions in Your ERP Cloud Business Case
Those who are building a business case for the first time often operate with several common, flawed assumptions. The first flawed assumption is that your business case approvers are fully aware of the situation and fully aware of the problems, headaches, and disruptions that this problem is creating. It’s easy for first-time business case builders to assume that the approvers understand the alternative solutions and why one alternative is better than the others. They also tend to assume that approvers have a strong sense of urgency to act.
While your front line might feel this way and thoroughly understand the problem and alternatives at hand, keep in mind that they are the ones being affected daily by the situation. The same cannot be said for your business case approvers/funders/company leaders. You must assume that at least one key approver is not fully aware of the issues at hand or the potential impact that they have.
It is also reasonable to assume that, among your approvers, at least one of them will favor a different use case for the limited funds that your company has. This individual will believe that denying funding for your project will bolster the chances of having their pet project funded.
You have a number of known and unknown obstacles to overcome in your attempt to convince approvers to adopt your recommendation and fund your project. Developing and presenting an ERP Cloud business case should not be an intimidating task. Simply approach the development of your business case with discipline and ample planning.
For more information about creating a winning ERP Cloud business case and making the move to ERP Cloud, check out the additional Oracle and Quest resources attached below.
For more Oracle ERP Cloud resources, case studies, best practices, etc., check out Quest’s Oracle ERP Cloud Content Center. There are resources and training available for all aspects of ERP Cloud, including risk management, financials, extensions, and more!