“So what? Why should I care?” I think we’ve all been asked those questions before. And we’ve all been tasked with proving why the project we’re working on demands attention and financial support. And if it’s your organization’s CFO asking those questions (because they will!) you better come prepared.
Webinar – What, Why and ROI of an IWMS
In this co-hosted webinar, Verdantix shares the potential ROI of an IWMS. In addition, they share a framework on how to develop a numbers-driven business case for an IWMS implementation. Planon elaborates on the benefits clients have seen by implementing an IWMS.
In relation to a conversation about an IWMS investment, one classic example is the facility manager going in to talk to the CFO and saying, “We can produce our reporting much more easily with this tool.” And the CFO will respond with, “So what? I get the reports that I need now. I don’t care how difficult it is to produce them. Why do I need to invest in new software?” This is one of the questions that Verdantix addresses in their new report on calculating the ROI of an IWMS.
The argument of making your staffs’ lives easier may not work with the CFO. Pulling a report more easily will not be compelling. However, if the difficult report takes three weeks to compile, you can easily argue how much of this person’s salary is spent on a report that could be done with a few clicks.
Verdantix gives multiple examples of companies that took “making staff lives easier” and quantified them into measurable benefits:
- A global technology firm found the move from 60 decentralized systems to a single IWMS for lease, space and maintenance management supported a reduction of its workplace and facilities workforce by 70%, which represented a reduction of over 100 staff.
- An Australia-based gas pipeline operator made the business case for an upgrade by calculating the IT team was wasting the equivalent of $156,000 of time annually responding to system crashes.
- Imperial College London indicated the move to Planon’s IWMS could reduce each administrator’s time booking rooms from 17 hours to 8.5 hours per week.
The challenge in creating a business case for IWMS that will appeal to a CFO is in getting away from the experiential argument and moving toward a numbers-based argument.
It’s not about experience
We’ve talked before about the “war for talent,” the importance of employee engagement, and personalizing the employee experience. It’s a hot topic in the world of FM at the moment but these discussions are very susceptible to the “so what?” questioning of a CFO.
These topics should be included in a business case for an IWMS to the extent that they can be quantified. For example, telling the CFO that it is expensive to recruit and train new people will not be a compelling argument. However, being able to say you spend $6 million a year recruiting and training staff that don’t last more than a year creates a much stronger argument. Reducing this spend by 5% or 10% with more engaging workplaces can create huge savings potential.
The Verdantix report mentions that many IT departments did not charge the facilities team for maintaining legacy systems. Combining this with numbers like the one above about wasted time on system crashes can create a compelling argument of how an IWMS will support IT.
Corporate real estate and facility managers don’t have easy access to these numbers, but the numbers do exist in the business. Collaborating with HR on employee retention costs or collaborating with IT on the costs of system crashes creates a more compelling and more engaging business case for the CFO.
Collaboration is key
As I mentioned in my last blog post, I consider the true value of an IWMS to be collaboration and conflict resolution. It’s imperative to pull other departments into your business case and financial scenarios before an IWMS has even been purchased.
As with any other discussion about IWMS, it needs to be cross-disciplinary and will inevitably have to address some office politics. Before you go to the CFO and mention other departments – like HR and IT – you must have those departments on your side. Or at least have them aware of what you are saying and be sure they have bought into the numbers you are using, because the CFO will want to confirm any numbers with the departments affected.
The CFO has always been the “holy grail” when it comes to discussions about purchasing an IWMS, as the financial gatekeeper to making this kind of investment. This report from Verdantix helps in speaking the language of the C-suite.