How Does Technology Help You Compete? Be Specific.

The most common technique for justifying IT investments is to calculate the time people save from new-and-improved, IT-enabled processes. And while it's true that many enlightened IT leaders have shifted business case arguments to the revenue side of the equation (citing ways to tap new markets or acquire new customers) the productivity argument still drives most business cases.

But here's something else to consider. I recently heard a different twist on business case from a Japanese colleague who said, "If an investment doesn't improve your ability to compete, what's the point?"

It's an interesting idea. Insightful. And worth a try. Of course, many IT professionals will simply spin the same old arguments into the language of competitive strength. For example, "Greater efficiency will improve our ability to respond to customers more quickly."

But by how much? And if you do, what will it do to retention? Loyalty? Or customer acquisition?

Granted, qualitative benefits become subjective when you try to quantify them, but as my Japanese colleague also noted, "We have to try."

Bottom line: the Japanese model encourages business leaders to translate productivity improvements into specifics that will help the organization compete. One way to approach this: think about an IT investment helps you compete on price or performance. 

Start with price. if you're more efficient, can you lower your price tag? If you offer products of equivalent performance at lower cost, you're more competitive.

On the performance side.

Can improvements in efficiency be used to outperform the product features of your competitors? For example, can you shorten your delivery terms? Or turn customer returns around faster (thereby improving retention and service quality)?

Can you get proposals and bids out the door more quickly? The sooner your solution starts performing for customers, the sooner customers start benefiting. And it doesn't hurt your cash flow either.

By showing how an investment improves your ability to compete, you'll get executives sitting up in their chairs. Granted, you'll get lots of questions, but it's an approach that is far more compelling than the same-old, same-old.