When ROI isn’t enough

As a strategy consultant, you quickly learn to accept the fact that your work is not an end in itself…nor should it be. Your value to the client is measured by whether the execution of your strategy produced the predicted results. Delivering a smart, polished strategy to the client is necessary but not sufficient–what they are able to do with the strategy ultimately determines whether it was successful or not.

One of the most important ways to make sure your strategy has legs at an organization is to find solid ROI associated with it, i.e., if we do what the strategy says, what benefits will the organization realize? I’ve written elsewhere about techniques for ferreting out the ROI associated with ECM strategy, so you might want to start with these posts if you’re not clear on the kinds of ROI ECM can realize.

In this post, however, I wanted to take the discussion of ROI a bit further, because the reality is that ROI in and of itself is no guarantee of funding or support–it’s simply the first step, the cost of entry into the arena of corporate budget decisions. After you get through the door with a plausible ROI, there’s lots more work to do to cross the finish line…so let’s dig in.

Typically, project teams have a hard time imagining how executive leadership could not sponsor a project that has a solid ROI: here are the costs, here are the very substantial benefits, so sign on the dotted line already. What they fail to realize is that there’s competition out there for these dollars, so your ECM ROI is not being considered in and of itself, but always in the context of what other projects are out there with their own significant ROI to offer the organization.

Although there’s nothing the team can do about those other initiatives vying for executive support, they can strengthen the chances of ECM getting funded by pushing beyond ROI to address the other factors that go into the decision to fund (or not to fund) a project.

The best way I’ve found to do this is to ask the project team, If ECM really offers the ROI we say it will, why hasn’t the organization done it before?, and then to facilitate a discussion about the reasons using something like the following diagram to capture the results.

It’s important not to focus on a specific category of ROI or ECM capability during this exercise–you should be capturing the reasons why this specific organization might leave money on the table if there are savings or revenue to be had no matter the source. When you’re done, you and the team should have a good-sized list to work with, and at this point, you need to shift gears in the discussion to identify which of these reasons are the most important for ECM specifically.

With this done, you now have a list of some critical factors over and above ROI that have influenced the decision not to fund ECM in the past, which you must confront head on if ECM has any hope of getting funding in the present. In your business case and executive presentations (as well as in one-on-one meetings to syndicate ECM throughout the organization) how you handle these critical factors becomes the narrative around ECM, the living, breathing story of ECM at the organization that complements the hard numbers of you ROI…and hopefully moves ECM up a notch or two relative to the competition to get it funded and supported.