Selling ROI to the Chief Executive Officer?

Three Critical Stages

A business case white paper from Solution Matrix Ltd. and True North

BUILDING THE BUSINESS CASE THREE STAGES TO SELLING A COMPELLING EXECUTIVE BUSINESS CASE
Two-day seminars
Despite a torrent of interest in ROI selling to C-Level executives, many
Practice and learn the concepts in programs have failed to deliver impressive results. Why? Most sales
this paper, in-depth. organisations don’t understand how executives make financially justi-
fied decisions. Their sales process is misaligned to the capital fund-
ing process. Consequently, sales people misuse the finance 101
skills from training programs and ROI calculator tools from marketing.
Worse, these carefully selected training and marketing developments
N often end up in the sales investment scrap heap. Not to mention the
wasted cost of sale on poorly qualified opportunities.
The capital allocation process is managed in the same way as a sales
pipeline funnel. And, for the same purpose – to allocate scarce re-
sources to the highest ROI, lowest risk opportunities. While the formal
Next offerings in 2005... decision making process varies between management teams, the three
general stages do not.
Boston, 12-13 Oct
• First, executives qualify business improvement concepts using a
Auckland, 7-8 August
‘back-of-the-envelope’ type of approach.
Wellington, 9-10 August
Kuala Lumpur, 14-15 September • If the concept passes this strategic smell test, the second stage is a
high-level 360-degree preliminary assessment of the issue.
For latest seminar schedules visit
• If the concept is still viable, a detailed assessment is conducted
www.solutionmatrix.com/seminar including full financial, strategic and operational analysis.

Stage 1: Business Improvement Concept

ABOUT THIS WHITE PAPER Executives use their extensive experience to do a quick sanity check.
From 50,000 feet, how does your improvement concept fit with other
Solution Matrix Ltd is pleased to make
strategic priorities on the back-of-an-envelop, plus or minus 25%? If
available this white paper by Phil Lori,
you did your positioning well, you’ve been given a one hour meeting to
Founding Director of True North.
prove you have a high ROI, low risk business improvement opportunity
( Phil.Lori@TrueNorthDYBC.com ).
worth further consideration. The executive will apply normal business
For more information about business planning and assessment criteria:
case selling and upcoming seminars
What business problem can these folks help me with?
for professional sales people and
sales management, please visit the How does this issue rank against competing strategic initiatives and priorities?
Solution Matrix Ltd. web site at
Would a solution add significant value to a priority business objective?
www.solutionmatrix.com.
What are the strategic risks of pursuing a solution?
Permission is hereby granted to
reproduce and distribute this docu- In short, does it deserve the attention of scarce resources – manage-
ment as long as the document is not ment time and capital? If so, does this person understand my industry,
sold, and this notice and the copy- business objectives, value drivers and strategic priorities? Have they
right notice (below) are included. addressed this kind of problem before?
If your improvement concept survives, the executive will want cross-
functionaL buy-in from key influencers before committing their resourc-
es to more rigorous assessment. `Emotionally, the outcome you are
seeking is a sufficient confidence level for the executive to sponsor your
improvement concept to the next step. Physically, the deliverable is a
five to ten page financially focused discussion paper with a crisp one to
two page executive summary.

Copyright © 2004-2005 Solution Matrix Ltd. and True North. All rights reserved 1
Business Improvement Concept Key selling traps in this phase are:
How does your improvement • Poor strategic positioning due to a lack of preparation and
concept fit with other strategic understanding of the customer’s financially driven priorities
priorities?
• Jumping into the detail without a strategic context or positioning
• Avoid discussion of risk ie. things that can go wrong.
• Product-centric, technology or ‘off-the-shelf’ solutions led approach
versus customer-specific, problem-led approach
• Telling, not selling. Not asking the right strategic questions – too tactical
or detailed, too narrow.
• Business improvement concept not pre-tested prior to executive session
• Blind or improper use of ROI calculator assessment tools
Result: No sponsorship to next steps.
Stage 2: Preliminary Assessment
In this step, you have secured some scarce customer resource to
conduct a collaborative high level assessment. The assessment may
take several forms from one-on-one meetings through to joint work-
shops. Again, normal business planning and assessment criteria will
be applied. However, the customer is still wary about over-investing in
the opportunity. So they will conduct a high-level assessment. What
Preliminary Assessment: are the high-level current state business problems, implications or pain
Rigorous, but still 20,000 feet points – using a value chain framework including customers, processes,
above the issue. people, technology, resources, suppliers?

Would a solution add significant What would the high-level future state look like?
financial value to a high prior- Would a solution add significant financial value to a high priority strate-
ity strategic initiative or busienss gic initiative or business objective?
objective?
What are the high-level solution design and implementation options?
What are the tactical risks and risk mitigation strategies? Are the key
baseline and future state assumptions reasonable?
What proof do we have about the key assumptions?
Notice the 360 degree nature of a preliminary assessment – value
chain, risk, options, benefits, evidence. The assessment is becoming
more rigorous, but we’re still a good 20,000 feet above the issue. The
physical deliverable is an eight to ten page preliminary or strategic
business case with a one to two page business improvement focused
executive summary.
Key selling traps in this phase are:
• Telling, not selling. Not asking the right tactical level questions – too
strategic or detailed, too narrow.
• Incomplete understanding of business problem and drivers
• No executive sponsorship or poor collaboration, therefore exposed
to personal agenda risks
• Product-centric, technology or ‘off-the-shelf’ solutions led approach
versus customer-specific, problem-led approach
• ROI assessment is too detailed
• Overlook 360-degree nature of the assessment.
• Miss key credibility builders – risks, options, value chain oriented
problem definition and proofs
Result: No sponsorship to next steps.
Copyright © 2004-2005 Solution Matrix Ltd. and True North. All rights reserved 2
 Stage 3: Detailed Assessment
Customers are willing to assign significant resources to conduct a
detailed assessment. They are keen to explore the operational design
options, risks, and financial benefits at the 1,000 to 5,000 foot level.
Credibility is developed by working collaboratively, using an agreed
‘business case’ methodology and joint business case assessment
workshops.
Deatiled Assessment The organisation will conduct a rigorous 360 degree assessment
– value chain oriented problem definition and solution design, risk as-
Credibility is developed by working
sessment, options evaluation, financial and non-financial benefits and
collaboratively.
proofs. The physical deliverable is a 20 to 100 page business case with
a one to two page business improvement focused executive summary.
Key selling traps in this phase are:
• Poor strategic alignment
The key point is the changing • Incomplete understanding of business problem and drivers
nature of the business • Lack executive or cross-functional buy-in to a collaborative process,
improvement assessment the business case and key assumptions
process–from strategic
• Overlook 360-degree nature of the assessment.
to tactical to operational.
• Miss key credibility builders – risks, options, value chain oriented
problem definition and proofs
• Lack of evidence or financial proofs
Result: Find out business improvement concept / project is not a prior-
ity. Cross-functional agendas undermine key assumptions. Wasted
cost of sale.
Unfortunately, there’s no one-size-fits-all, silver bullet training pill or ROI
calculator. But there are repeatable business improvement selling solu-
tions aligned to the customer’s three-staged decision making process.
The outcome is to move your sale through the customer’s capital fund-
ing and decision making process as quickly as possible. Only the high-
est ROI, lowest risk opportunities will survive. Sometimes you need to
go slow at the beginning in order to speed the overall process. The key
point is the changing nature of the business improvement assessment
process – from strategic to tactical to operational.
Each stage invokes very different sales challenges, conversations and
executive business case selling capabilities. Ignore these three stages
at your own peril. Or, align you sales process to your customer’s capi-
tal decision making process and reap the benefits.

Table 1 on the next page summarises the three-stage process.

For more information on business case tools, training, and other re-
sources, contact:

Solution Matrix Ltd

304 Newbury Street, No. 350
Boston, MA 02115 USA
smatrix@solutionmatrix.com / www.solutionmatrix.com

Phil Lori, Founding Director,

True North
Perth, Australia
Phil.Lori@TrueNorthDYBC.com

Copyright © 2004-2005 Solution Matrix Ltd. and True North. All rights reserved 3
 Table 1 – Executive Business Case Selling Process

Stage 1 Stage 2 Stage 3

Business Improvement Preliminary Assessment Detailed Assessment &
Concept Approval
Back-of-the-envelop financial High-level problem definition Detailed problem definition and
assessment of improvement and scenario analysis. scenario analysis.
Description concept. Test fit with strategic Detailed financial, risk and
Preliminary financial , risk and
direction and priorities. solution options assessment.
solution options assessment.
Customer’s Go / Invest more resources to Invest more resources to Approve capital funding for
No-Go Decision assess concept? assess detailed solution? implementation?
Awareness & Interest Preference Action
Executive sponsorship to next RFP lock-out Decision to select our solution
Sellers Outcome step. Commitment of resource Executive sponsorship
to collaboratively assess the
opportunity.
Qualify Develop solution concept Detailed solution design, proof
Sales Process of concept and close.
Financially focused, strategic, Preliminary business case or Detailed business case or
business improvement feasibility study (5 to 10 pages) feasibility study (20 to 100
Compelling discussion paper tailored to pages)
Aligned to business objectives
Deliverable your customer’s situation. Aligned to business objectives
1 to 2 page exec summary.
CXO discussion CXO briefings / update CXO briefings / update
Collaborative Joint cross-functional business Joint cross-functional Joint cross-functional business
Sessions manager workshop preliminary assessment case workshops
workshops
Discuss strategic risks and Tactical implementation risk Detailed implementation risk
mitigation strategies management strategy management strategy
Credibility Discuss strategic options High-level solution options Detailed solutions options
Builders ROI proofs, reference sites assessment assessment
Key assumptions proofs Sensitivity analysis and
assumption proofs
Poor preparation and Poor understanding of Poor strategic alignment
understanding of strategic and business drivers Lack executive or cross-
financial drivers No executive sponsorship functional buy-in to a
ROI calculator assessment is ROI assessment is too detailed collaborative process, the
too detailed and lacks strategic business case and key
Overlook key credibility
context assumptions
builders – risks, options,
Selling Traps Product-centric approach value chain oriented problem Lack of financial proofs
Business improvement definition and proofs Result: Find out business
concept not pre-tested prior to Product-centric approach improvement concept / project
executive session is not a priority. Cross-
Result: No sponsorship to next
Result: No sponsorship to next functional agendas undermine
steps.
steps. key assumptions. Wasted cost
of sale.

www.solutionmatrix.com

Copyright © 2004-2005 Solution Matrix Ltd. and True North. All rights reserved 4