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Making A More Effective Business Case for Investing in Software
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Building the business case for new software

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When looking to purchase new software, how do you build an effective business case if your business doesn't have a clear process for calculating ROI (return on investment) in place? Michael Osterman of Osterman Research and David Cornwell, CEO of PleaseTech, discuss.

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Building the business case for new software

  1. 1. Understanding the Pitfalls of the Software Purchase Process Michael Osterman Principal Analyst Osterman Research, Inc. ©2016 Osterman Research, Inc.
  2. 2. About Osterman Research • Focused on the messaging, Web and collaboration industries • Practice areas include archiving, security, encryption, content management, etc. • Strong emphasis on primary research conducted with decision makers and influencers • Founded in 2001 • Based near Seattle ©2016 Osterman Research, Inc.
  3. 3. About PleaseTech Ltd ©2016 Osterman Research, Inc. The document co-authoring and review specialist PleaseReview – a unique and proven collaborative and controlled document review & co-authoring solution • Used globally across industry sectors and departments, particular success in document-intensive, highly regulated organizations • incl. 75% of Top 25 Pharma, major Defense contractors, Military & Government Why Osterman Research? • Respected industry commentator • Independent research into an important business process • Wanted to know: • When the impact of software on productivity can be huge, are end users consulted? • What are the key barriers to implementing specialist software? • How can these be overcome?
  4. 4. ©2016 Osterman Research, Inc. The Problem We Solve
  5. 5. With PleaseReview: It makes the document review process transparent, efficient and auditable ©2016 Osterman Research, Inc. • Share a single copy of the document(s) with multiple participants, simultaneously • Control who can do what & where • Consolidate comments and changes • Manage reviews • Report across multiple dimensions • Contribute & review more easily • Access associated information (for reference or comparison) • Eliminate duplication of effort • Collaborate to produce higher quality output • Send feedback
  6. 6. About the Survey • On behalf of PleaseTech Ltd, Osterman Research surveyed decision makers, influencers and others about value-added business software applications • PleaseTech wanted to examine the stumbling blocks end users face when deploying new software, and what factors make a compelling business case for its adoption. • A total of 193 surveys were completed with members of the Osterman Research survey panel • The median size of the organizations surveyed • Employees: 1,600 • Email users: 1,500 ©2016 Osterman Research, Inc.
  7. 7. IT Drives Software Purchase Evaluations…Today IT is the primary initiator when evaluating business-critical applications End users are rarely allowed to self-select their business- critical applications In short, users must employ these applications, but they have little say in choosing them ©2016 Osterman Research, Inc.
  8. 8. What About for New or Replacement Solutions? For new or replacement solutions, business decision makers would have a much greater role in the evaluation process But still users don’t get a say about the applications that will be employed ©2016 Osterman Research, Inc.
  9. 9. Numerous Challenges Abound Cost and integration are the leading challenges in purchasing new software Ease of use – key to end users – is much less of a challenge Usability is not a consideration. Why? ©2016 Osterman Research, Inc.
  10. 10. Decision Makers Lack Key Tools Decision makers lack important capabilities when they need to deploy a new application: • They cannot perform cost justification • They lack the time to make a proper business case • Demonstrating financial benefits is difficult ©2016 Osterman Research, Inc.
  11. 11. Calculating ROI is Problematic Most organizations do not have a clear process or clear guidelines for calculating the ROI to justify a software investment ©2016 Osterman Research, Inc.
  12. 12. Making a Compelling Business Case There are a number of elements that would be useful in helping decision makers to make a robust business case for new software The primary requirement for making a strong business case is also the primary reason decision makers say they cannot do so! ©2016 Osterman Research, Inc.
  13. 13. Vendors Can Play an Important Role Decision makers can make use of reliable and accurate information from vendors ©2016 Osterman Research, Inc.
  14. 14. Does the Cloud Make a Difference? Is there a difference between justifying applications on- premises or in the cloud? Which applications are easier to justify? ©2016 Osterman Research, Inc.
  15. 15. Roles in the Budgeting Process IT is more involved with making software budget decisions for new software applications ©2016 Osterman Research, Inc.
  16. 16. What is Important in Making the Business Case? There are a number of important factors that go into the process of making the business case for new software Employee motivation is low on the list, yet we know from previous research that motivated employees are productive employees. ©2016 Osterman Research, Inc.
  17. 17. Indicators of the Wrong Software Decision User complaints are the most important single factor in helping decision makers know when they’ve deployed poor software Yet, user input into the software evaluation and selection process is the least important consideration when making purchase decisions! ©2016 Osterman Research, Inc.
  18. 18. Summary • The rights tools for the job improve productivity and reduce costs, yet 96 % of businesses do not include end users in the purchasing decision. • Users are not consulted about the business-critical software applications they use on a daily basis - but they are the primary way that decision makers know they’ve made a mistake • IT has been the primary driver of software purchase and budget decisions, but business decision makers would have a more important role for new or replacement solutions • Better purchasing decisions could be made with a more robust process for producing an effective business case • However, decision makers lack the tools necessary to make a compelling business – namely good tools to demonstate the ROI of a software solution that would help them to justify its purchase • Users are not consulted about the business-critical software applications they use on a daily basis - but they are the primary way that decision makers know they’ve made a mistake ©2016 Osterman Research, Inc.
  19. 19. For More Information Osterman Research, Inc. +1 206 683 5683 +1 206 905 1010 info@ostermanresearch.com www.ostermanresearch.com ostermanresearch.com/wordpress/ @mosterman ©2016 Osterman Research, Inc. PleaseTech Ltd +1 877 205 4940 +44 1666 826 540 david.cornwell@pleasetech.com www.pleasetech.com blog.pleasetech.com @pleasetech To watch our movie ‘The Business Case for PleaseReview, please visit our website www.pleasetech.com/business_ case.aspx

When looking to purchase new software, how do you build an effective business case if your business doesn't have a clear process for calculating ROI (return on investment) in place? Michael Osterman of Osterman Research and David Cornwell, CEO of PleaseTech, discuss.

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