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14 March 2019

Practical tips on how to create a compelling business case for IWMS

In this series of three blog posts, I am sharing the key take-aways from the recent webinar organised by Planon and Verdantix - an independent research and consulting firm with a focus on innovative technologies that optimise business operations - based on the new Verdantix report "The Business Case for Integrated Workplace Management Systems".

Webinar – What, Why and ROI of an IWMS

In this co-hosted webinar, Verdantix addresses the potential ROI of an IWMS. They also share a framework on how to develop a numbers-driven business case for an IWMS implementation. Planon elaborates on the practical benefits.

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The webinar provided practical tips on calculating the potential ROI of an IWMS and how to write a numbers-driven business case. The first blog was about understanding exactly what an IWMS is and what its key benefits are. In this second blog, I explain how you can create a convincing, numbers-driven business case for the implementation or extension of an IWMS.

Main challenges when calculating the ROI

A global survey by Verdantix has shown that 75% of real estate leaders find their budget insufficient to fund IT investments (Global Real Estate, Energy & Facilities Survey: Budgets, Priorities & Tech Preferences, 2018). To secure budget for a new implementation or extension of existing software, you need to show that the proposed investment for your IWMS delivers a higher ROI than other projects that are also waiting for funding.

Calculating the ROI of an IWMS seems to be quite a struggle for many Real Estate and Facility Managers. The Verdantix research on the business case for IWMS shows that they face four common challenges:

  1. They fail to show near-term-savings. It seems quite a challenge to convince the Chief Finance Officer (CFO) that their proposed investment is the best use of cash.
  2. The lack of good quality data on wasted cost. This means they do not have insight into current facilities costs and their inefficiencies, which makes it difficult and time-consuming to build a numbers-based view on how an IWMS saves money.
  3. Facility Directors can sometimes struggle to find further cost savings after many years of cost cutting.
  4. Real estate leaders sometimes face push-back from decision-makers who focus on the short-term. They question the value-add of an integrated platform, and think that problems are best solved more cheaply via point solutions. In the end, as part of a longer-term IT strategy, an IWMS investment can save a lot of money and eliminate all standalone software systems.
A business case to pitch an IWMS investment

Of course, these challenges need to be overcome. The key in doing so is to create a compelling business case to pitch the IWMS investment to key decision makers within the company. There are three important aspects to keep in mind.

First, show the need and urgency of an IWMS investment! Why is it important to act now and implement or extent the IWMS? Do this by highlighting the risks that are involved if the status quo is maintained. “If we do not invest in an IWMS, we will face the risk of not being compliant with new rules and regulations.” “Also, the existing systems are nearing the end of their technical lifespan, and we do not want a disruption in our service due to outdated systems.”

Second, create a narrative to show how the IWMS can support the organisational goals. Make a compelling story to the Chief Executive Officer (CEO) about how an IWMS can positively impact the business. Mention the positive effects of this investment on the overall strategic objectives of the company. For example, think of positioning the IWMS software investment in line with the CEO’s digitalisation plans.

I am sure that you can do this without facing many problems, but there is a way in which you can boost your chances! Namely, it is the crucial act of translating the key benefits of an IWMS into numbers. By linking your business case to concrete financial outcomes, you make your case more compelling.

Savings from IT rationalisation, labour productivity and operational costs

In the webinar, Susan Clarke from Verdantix explained how to find these numbers in the categories of savings that cover all major financial wins related to an IWMS deployment:

  • IT rationalisation: Companies are often able to replace 10 to 20 different software licenses with one single platform. Imagine how much money can be saved when the average IT operation cost of maintaining a standalone or legacy system can be up to 20K per year!
  • Labour productivity: An IWMS improves efficiency by automating processes and different administration tasks. It allows your workforce to spend time on other tasks, which could lead to an increase of 20% or more in operational efficiency. An IWMS also reduces duplicate data entry compared to manual input, and decreases reporting time massively.
  • Operational costs: To generate savings at scale, calculate how many operational expenses can be saved. An IWMS can help to save large amounts in space usage and maintenance, which could represent millions in a large firm.

A poll among the 180 Real Estate and Facility Managers that registered for the live webinar showed that the majority were interested in knowing how an IWMS can contribute to reducing operational costs: 

In the webinar, which is now available on demand, Susan Clarke - Principle Analyst at Verdantix - elaborates further on operational costs as one of the three categories for seeing a return on investment. I highly recommend watching it and listening to the insight she shares. 

Are you ready?

Hopefully this blog has helped you on your way with writing a convincing business case. Are you looking for more practical examples on the added value of an IWMS? The third and last blog in this series will discuss the cases of Gasunie, King’s College London and Danfoss.

Would you rather not wait for the last blog? You can watch a recording of the entire webinar with Verdantix.

Geert-Jan Blom
Global Product Marketeer