Working on a modular approach to how to calculate ROI, TCO and IRR

If you sell ITIL, itSMF based solutions or any other business solution to organizations, you must have a compelling business justification to convince your potential customer, why they should buy from you. Most companies would tell their customers, whatever they want to hear but they don't have a processes based approach that can justify any new investment at the customers end.

Couple of things from sellers end that should be mandatory are;

1. Find as much as possible about their pain points from financial perspective, i.e.,

• What is it costing you at this time and where would you like to be?
• Why is it costing you so much?

2. How do you translate efficiency to a monetary value?

• If you add so much efficiency to "x" process what will be your cost saving "y"
• Do you what will be your transitional cost "z" to bring about this new change?

3. Do ask what is your operating cost?

This could be IT organization or departmental but asking this question will most certanly help you put a case to sell easily.

4. What is more important to you, cost cutting or efficiency gain and why?

If you want to know more about this topic, please contact me via email or by adding a comment to this blog and I will be in touch with you.

If you want to ocntribute your experience to this discussion, please we all encourage you to do so.

Twenty Five Questions to ask IT Managers

DO you know what value implementing ITIL does for your organization?

1. How do you measure your Total Cost of Ownership (TCO) for your Service Desk?
2. Do you specific targets on how much to save or how much efficiency that must be incorporated into the existing environment?
3. How do you provide quantifiable business results, such as lower cost, increase productivity, improved revenue and increased efficiency for your IT or Service Desk environment?
4. Please tell me who are the people (person) responsible for making the business case for new initiatives and who is responsible for the results produced by such initiatives?
5. Can you throw some light on ROI results based upon impact on productivity or costs?
6. What is high on Senior Leadership Team (SLT) ; Centralization, Consolidation or Individual (group) accountability?
7. Are there any compliance or regulatory requirements?
8. Does your organization require SOX compliance or any other specific objectives?
9. Can you account for how many licenses your organization need and how to keep the right amount of licenses within the organization?
10. Do you know what is the Mean Time Between Systems Failure (MTTBSF)?
11. How much does each incident cost to the organization?
12. What are the MTTR (Mean Time to Recover) numbers?
13. What is the cost of change for your IT organization?
14. How successful are your projects (below 50%, above 70%)?
15. How do you define your threshold values for number of employees needed at any given time?
16. How do you scale up or down on the number of employees for your IT organization?
17. How satisfied are your customers (consumers) from your IT organization?
18. How well defined are your processors for each discipline; Incident, Problem, Change, Capacity, Security and Availability?
19. Does your organization have a common repository where the documentation on Standard Operating Procedures (SOPs) reside?
20. Can you name top three pain areas for your IT organization?
21. Would you say business and IT objectives are well aligned?
22. Can you give me a true success story for your IT department?
23. How satisfied are you or your support staff with the tools your use to provide support?
24. What tools does your IT or support organization use?
25. Does your organization have a full account of all the assets you manage?