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on May 5, 2020 in Business Case Management

Building a Business Case for Buying Software

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Buying software today is becoming increasingly complex. Initiatives focused on acquisition of packaged application software are consuming an increasing percentage of annual strategic investment budgets at many organizations.

This is due, in part, to the role of industry and business area-focused applications used in implementation of digital transformation strategies.

Digital transformation often requires application ecosystems to move well beyond evolutionary improvements that can be gained through implementing new features or new releases of existing applications, focusing instead on step changes that require new thinking, approaches, and solution providers.

Exploring potential software purchases from this standpoint requires a solid business case that focuses not only on selection criteria, cost, and schedule, but outcomes beyond the IT deliverable—like quantifiable financial and business benefits, along with overall strategic alignment and risk assessment. This perspective requires a robust business case analysis process that can provide the insight needed to make the most informed decision.

Costs & Benefits

Upfront definition of costs and benefits is a requisite for any acquisition. Clarity is especially critical in the decision to purchase new software in conjunction with digital transformation initiatives due to the time invested in technology transitions.

When creating a business case for a significant software investment, it is very important to use a framework based on your organization’s specific taxonomy, so that it is very clear, for example, which business units or geographic regions are being targeted or which product and/or service lines are expected to benefit.

That’s why it’s very helpful that Inpensa’s solution allows users to standardize taxonomy along with business rules and financial calculations such as ROI, payback period, NPV and IRR. This harmonization helps make clear among all investment partners—business, IT, and finance—the important characteristics of an initiative so it can be evaluated and later measured appropriately.

An integrated business case platform enables organizations to accurately project detailed costs and benefits, which means faster, higher confidence decision making for important acquisitions.

Explore Alternatives

Advanced digital business case solutions allow you to explore alternatives robustly to ensure all viable options are evaluated side by side from the business case perspective.

Aspects such as time to impact, cash versus balance sheet implications, and others can be assessed along with how a preferred solution aligns with corporate strategies, such as rationalizing the number of vendors.

Also, it is helpful to understand how a preferred alternative maps in terms of strategic value and risk relative to an overall portfolio view.

Balancing the need for thorough analysis with timely decision making can be challenging. This is why the Inpensa platform was designed to capture standards and drive automation to speed the end to end process and enhance confidence throughout.

Establish Consensus

Consensus often leads to faster adoption of transformational technologies. Establishing consensus around thinking behind an initiative to acquire software requires a business case framework that standardizes data capture and metrics.

A strong business case solution lets you collaborate with your team members in real-time, making sure everyone is on the same page and increasing overall efficiency, particularly during a period of technology transition and digital transformation.

Expediting and simplifying the decision-making process with a business case platform helps ensure the best decisions are made in a manner that is both timely and most likely to produce desired outcomes.

Bottom Line

A business case approach to software purchases against a backdrop of digital transformation is more important than ever before.

Upfront definition of costs and benefits, along with exploration of alternatives and consensus around thinking behind an initiative to acquire software all require a business case framework that standardizes data capture and metrics.

Inpensa’s platform enables organizations to institute standardization, automation and governance, driving higher fidelity decisions and optimizing results.

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