ROI: Now It`s for Real

The right audience

Often, the it conversation starts in the IT department, which welcomes help in selling a new technology or product to management.

“Any technology purchase is political,” said Judith Hurwitz, president and chief executive officer at Hurwitz & Associates. “Customers want solution providers to give them ammunition.” Case studies, examples and research provide real-world data that can help IT sell the technology upstream to management, Hurwitz added.

Savvy solution providers, then, must stop selling technological expertise and start pushing potential results to give the IT department clear, concise ways to communicate with the financial powers about solid returns.

Lilien used to front-load its HP Platinum Partner status in customer meetings but abandoned that for a different sort of conversation, Osborn said. “I realized that we were really selling ourselves short: We solve complex business problems that drive business value,” he said. “To demonstrate that, we instituted a policy that any deal over a certain size must have a defensible ROI.”

Although the IT department can be an ally, solution providers whenever possible should move the ROI discussion from the IT department to the corner office. CEOs and chief financial officers are often unaware of a proposed solution’s potential impact, and the ROI conversation can bring clarity that will move a project forward, said Michael Drake, chairman and CEO of MSP (managed services provider) MasterIT.

“To a person, when we deliver the TCO analysis, the CEO looks at the CFO and says, ‘I can’t believe these numbers,’” said Drake, adding that the litany of potential cost areas that are often overlooked includes supplies, mobility, downtime, third-party support, annual maintenance and updates, and more. “It’s not just the technology. And when they realize that, it is an ‘aha’ moment for these executives.”

ROI for all

Although customer size drastically affects the sale, solution providers find that customers of all sizes want to understand how IT initiatives will pay for themselves. Large customers want help understanding the long-range benefits of complex IT solutions.

“These are very complicated projects, and many times, everyone has a good handle on the cost side of ROI, and everyone is challenged with coming up with a credible rationale around the benefits side of the equation,” said Chris Wong, vice president of IT operations and marketing at IBM.

Particularly for midsize customers, however, money is at the crux of IT decisions, since such companies often work with bare-bones budgets. “For our midmarket customers, ROI, or payback, is absolutely a reason why [they] do or do not make a decision,” CBE’s Cowie said. His company’s goal, he added, is to get customers to take a broad look at technology options and consider a managed services offering.

Smaller customers, meanwhile, need help in the most basic ways—figuring out where they want their businesses to go and how technology can help them get there.

“A lot of the industry in the SMB [small and midsize business] space has spent time on ‘Let’s talk to you about the greatest technologies,’ but partners are finding the need to get down to nuts and bolts about why this makes sense for them,” said John Fago, sales director for VARs and the Midwest region at Ingram Micro. “They want to know how the technology makes sense based on where they want to go and how they can increase profitability by going forward.”