This is the second part of a two-part blog series on creating a business case for SaaS software. While written for software sales teams and implementation partners, anyone looking to champion a solution for a business or team will find many practical and applicable insights as well.

In the first blog, we defined a business case, addressed when one is needed, and outlined the typical components. We then got into a bit more depth around comparing two solutions, and the difference between a new software investment verses a renewal.

In this blog, we dive into the importance of “soft benefits,” review the typical process of (and resources needed for) creating a successful business proposal, and conclude with practical guidance regarding maximizing your chance of success with the approval process.

5. What about “soft benefits”?

Often vendors are thrown into a political environment where the assessment focus is centered around a portion of the business, or strictly on “hard savings.”

In one case we worked on — justifying an Intranet project for a growing global organization — we found that senior finance management controlled the decision, and they were only interested in two things: headcount reduction and increasing the productivity of employees. Freeing up employees to do higher-value work was not considered “hard” enough, as it would not lead to headcount reduction.

As you make the business case, your task is to open the aperture. Of course, stakeholders and leaders need to consider all the revenue and cost improvements. But they should also consider other benefits, which are real and tied to the strategic rationale of the program — even if hard or impossible to quantify

Key soft benefits specifically associated with a SaaS solution often include:

  • Moving to latest technology, particularly MACH (Microservices-based, API-first, Cloud-native and Headless) based composable stacks. MACH empowers seamless upgrades to the latest features, more agility, speed to market to address emerging business opportunities, and quick integrations with the latest adjacent “best of breed” technologies. This is particularly crucial for organizations focused on digital transformation to stay ahead of the competition in fast-moving competitive industries.
  • Next-generation tools for developers and simplicity for business users. Both are essential for user adoption, business performance, and, critically, for attracting and retaining top talent.
  • Ability to not only capture user and customer data to create a “customer first” view, but to also leverage it across the ecosystem — creating more value for your channels, your prospects, and your brand.
  • Higher quality and accuracy of process outputs and outcomes.
  • Security, assurance, expertise, single point of contact, and the resulting “ease of mind.”

Other soft benefits that apply broadly can include:

  • Potential impact on other processes, business units, regions, channels, and new business models in future anticipated rollouts not included in the initial approval request, as well as the value of reusable features and learning from the initial implementation on future releases. For example, starting with B2B and later adding DTC, B2B2C, and marketplaces.
  • Value from risk avoidance, alongside reduced compliance, and regulatory penalties costs
  • Better security and privacy compliance, and reduced reputational risks
  • Improved disaster recovery capability
  • Improved analytics and decision making
  • Improved IT and business governance
  • Increased customer and employee engagement, collaboration, and satisfaction. For example, another intranet project in which we were involved was focused on employee satisfaction, reducing employee turnover, and attracting the latest technical talent. We did not quantify these benefits, but it was very much acknowledged as a strategic benefit in the “resignation economy.”

6. A good process to follow in creating a business case

Creating a robust business case requires a comprehensive team effort. As mentioned at the beginning of the first blog of this series — only invest in creating a business case when there is enough understanding and commitment within the internal customer team.

Marshall your sales resources to help scope the opportunity properly, understand their view of the business context, customer strategy, pain points and opportunities, the customer decision process and cadence, and who should be asked to participate in providing information that will enable you to develop the business case.

Conduct a kickoff call with key business and IT stakeholders, during which you describe the process and gauge interest and commitment, as well as determine approach, participants, timing, and decision-making approach.

Assuming you got what you need form the kickoff call, it’s time to schedule one or more discovery sessions to understand current KPIs. These include:

  • Staffing levels
  • Hours spent on relevant tasks
  • FTE costs
  • IT hosting and operating costs
  • Campaigns
  • Value of a lead and/or average order value

Expect to have several rounds of discussions to get clarity and alignment on approach, assumptions, and outcomes. Make sure the final decision makers (i.e., signature holders) are clearly identified and their thinking is understood.

Often, approval is initially overseen by a senior IT leader and their business counterpart who submits the proposal and business case to a steering committee upon whose approval a final pitch is made to top management, or a “capital committee.” Expect revisions along the way.

7. Maximizing your chance of success with the approval process

The following are principles we recommend you follow to increase your chance of building a successful, aligned, and approved business case:

  1. Involve all relevant stakeholders — including other operating departments as well as Finance.
  2. Collaborate with your implementation partner to agree on high level program phases and attendant costs and benefits.
  3. Proactively manage the approval process: who to involve, who approves, how they make these kinds of decisions, how this specific decision will be made.
  4. Involve relevant Finance leadership (FP&A and others) early. They should supply parameters such as the hurdle rate, evaluation timeframe, and output formats.
  5. Always ensure that there will never be any “shock or surprise” when you present your case, that expectations have been fully managed, and that key client/prospect stakeholders are aligned and supportive. You will accomplish this through smaller meetings to preview the solution and the business case with key stakeholders.
  6. Ensure that the full context and that customer, team, and leadership perspectives are provided in your presentation together with any physical deck or on the business case hand-outs. Include documentation of pertinent information from your discovery interviews and organizational plans.
  7. Set realistic expectations about the level of accuracy. In large complex cases, be prepared to run several scenarios, and sensitivity analyses on 1-3 key variables and key benefits.
  8. Find informing studies and case studies that support your improvement assumptions, but set the expectation that every organization is different, and results would depend on the customer’s unique audience, region, implementation success, and operational capabilities
  9. Benefit streams and potential improvements should be clearly linked to the specific scope of the business, solutions, and capabilities under discussion. Avoid high-level and general assertions related to absolute levels of business performance, although this type of information may be useful for providing relative context.
  10. Important assumptions (e.g., percent improvements in cost and revenue) should fall within ranges that appear believable and are less likely to be challenged or dismissed by client stakeholders. In our experience, the value of a lead is a contentious area, but if it is well-researched you should be able to defend it.
  11. Ignore sunk costs — but do consider their effects. This is known as the “sunk cost fallacy.” For example, if a team is already using the incumbent solution, “we might as well use what we already have been paying for” is not valid thinking. However, the renewal business case should take credit for lower training and onboarding time and cost relative to a new alternative solution.
  12. When it comes to results, stay in the goldilocks zone: make sure your projected results/KPIs do not seem to be “too good to be true.” No single benefit should start earlier than implementation of the relevant roadmap item is expected to be completed. Neither should any benefit seem so large, or so out of proportion with the rest of the benefits, that it seems unbelievable and is a target for reduction or dismissal by decision makers.
  13. Bigger is not always better. Benefits should be comparatively moderated or split up where appropriate to assist in the perception of balance.

Making a business case is, arguably, the most important part of securing the technology you need to offer your customers the experiences we have all come to expect today. We hope you have found this two-part blog series helpful.

Elan Bair is a Principal Value Consultant at Sitecore. Follow him on LinkedIn.