A single silver bullet fired by the CFO shoots down many good projects.
I just had lunch with a friend who advises Federal CIO’s and CFO’s on procurement. He said 75% of projects fail in the business case, not the technical evaluation.
When we propose a solution, we may think the question we are trying to answer is, “Does my solution produce a return on the investment (ROI)?”
However, that isn’t the question.
Financial decision makers are asking “Where is the best place to invest my finite cash now?”
In the CFO’s eyes, your project needs to meet three requirements:
- Your project has to show a return that is bigger than competing projects. There is always competition for capital inside an organization.
- Your project needs to demonstrate quicker payback than other projects. A CIO told me last week he looks for return the same quarter.
- The return promised by your project needs to be more credible than the return promised by competing projects.
Some suggestions on using this information to your advantage:
- Don’t rely on technical buyers to build the business case. Ask, “Will it be hard to build the business case to get funding?” My direct observation of sales calls proves that, in response, buyers will:
- Convince you that they can.
- Start doing the math to build the business case.
- Ask you to help.
- Let them do the math. People don’t argue with their own data.
- If your solution can produce tangible cost removal, lead with that, rather than revenue improvement or intangible benefits.
Even if your solution solves a problem and produces a ROI – the CFO can still say NO.