Building a Solid Business Case for Industrial Enterprise Software

August 04, 2016
By Adriana Salazar

Increasing competition, volatile markets, ageing assets, cost cuts, digital transformation, stringent regulations… Faced by challenges such as these, today more than ever, industrial and ‘asset intensive’ companies across every manufacturing/production management area (including EHS management), must be ready to take a fact-based leap towards enterprise-class software.

In a challenging and evolving business climate, enterprise class software can go a long way in helping companies in industries such as Oil & Gas, Mining & Metals or Manufacturing to efficiently manage change, leverage big data to make smarter business decisions, and streamline processes for better operational and financial performance.

Yet, despite a number of interlocking and mutually reinforcing benefits, it can be challenging to build a ‘good’ business case: one that will boost your chances of successfully justifying an investment that, in some cases, could require important adjustments, including logistical, human, and technical efforts to deploy new software systems across the enterprise, and to ensure user adoption.

Here are some key tips on building a solid business case for industrial enterprise software (and watch out for ‘pro tips’ for executives and managers wanting to take things one step further!):

1. Document current processes

This includes developing a high-level understanding of the existing IT resources in the management area you’re focusing on. You can easily draft a comprehensive assessment of your current capabilities by:

  • Identifying key personnel and basic organizational structure;
  • Taking inventory of the processes already in place (and noting if any have been standardized, plus how effective they are);
  • Documenting current IT capabilities, paying special attention to integration points and interdependencies across your IT systems and applications;
  • Listing the main metrics being used to measure effectiveness.

*‘Pro tip’: Involve your key stakeholders from across the value chain early on in the process. One way of doing this is to list the main individuals/teams that will play an important role in using the software and invite them to join a ‘solution selection council’. Listening to what your future users have to say, evaluating their recommendations and identifying the main needs of influential players will strengthen your proposal, foster buy-in, encourage cross-functionality, and curb issues around user adoption further down the line. Documenting this process concisely and clearly should help increase the chances of approval of your chosen enterprise software.

2. Identify ideal IT capabilities

Identifying the core IT capabilities that will best suit your needs will help you rule out unfit software solutions and focus on the main contenders. You can classify key IT capabilities into four ‘buckets’ or categories: people, processes, technology and metrics. Asking yourself the following questions will help you complete this task:

  • What culture and degree of leadership will help manage the transition (and day-to-day operations), holistically and effectively?
  • What processes should be globally standardized, and which ones should be managed locally?
  • Are current software systems enabling performance or limiting it?
  • Does the current use of metrics offer the visibility needed to make smarter decisions? What new metrics should be measured?

*‘Pro tip’: Rolling out a new or upgraded enterprise software that tackles all ideal IT capabilities across all four categories from day one will be unrealistic in most cases. Understanding how your software scales and prioritizing critical, problem-solving and high-ROI capabilities will be key in addressing this type of situation.

3. Identify where enterprise software can help fill the gaps

Once you’ve documented current and ideal processes/capabilities, carrying out a gap analysis to establish where new or upgraded software fits in should be fairly straightforward. Here it will also be helpful to carry out a 4-step analysis and consider the impacts on people, business processes, technology, and performance management. Some key questions to ask are:

  • How and where can the enterprise software solution facilitate stronger employee engagement?
  • How will desired capabilities improve business processes?
  • How will this new technology enable your organization to realize its vision by empowering people and processes?
  • How can ideal IT capabilities help your organization effectively measure KPIs?

4. Project the business value of your investment

As is often the case when facing any ‘budget holder’, a final but critical step involvs being prepared to project and demonstrate the return on investment (ROI), based on expected performance improvements. There’s no single method of doing this but steps to be considered include estimating and projecting ‘long-range’ ROI on culture, overall software architecture, or on employee engagement and empowerment.

*‘Pro tip’: Prepare a ’continuous improvement roadmap’ by establishing some key processes that will help monitor the effectiveness of the implementation over time and estimate if more or less resources are required.

Building a business case and selecting the right enterprise software solution is no easy task, so if you want to learn more, you can access below the LNS Research Guide designed to provide executives and senior leadership with the information needed to effectively build a solid business case when selecting best-fit enterprise software: