I had a wonderful class called Engineering Economics in college. The class taught me things that every professional who will acquire goods or services for their employer should know. During my tenure at Parametric Technology as a VP of Sales I blended this knowledge with my enterprise selling skills and the results were phenomenal. The process became standard training to all new sales hires and helped many people understand more about how to meet their goals while helping their customer as a trusted advisor. Let’s go over the basics from the acquiring party’s point of view.
- A good decision requires research based on objective decision criteria. These criteria should be steered by the desire to return the most value to your company but should also consider competitive pressure (i.e. what are your competitors doing to outperform you)
- A process should be outlined in writing and reviewed with the manager who will be signing the check or committing the budget to acquire the solution.
- The process for software or SaaS solutions should include an evaluation of alternatives with a score sheet to capture the objective data that you will use to make a good recommendation. If there are no solution alternatives than a cost comparison of investment versus doing nothing is the proper course to follow.
- The end result of this project should be a justification document for management. A typical document would include:
a. An introduction paragraph stating the problem you are trying to solve and the implications of this problem (P and I from SPIN, Situation, Problem, Implication, Need).
b. An executive summary of the proposed solution so that a VP or C level executive can understand quickly all that you have learned and condensed into the summary.
c. A description of the process you followed including:
i. What was your original goal for improvement?
ii. Who internally approved the project?
iii. Who from your company was involved and in what capacity?
iv. What was your vendor selection process?
v. What was your scoring matrix to select and what were your results?
vi. What savings or competitive advantage will it yield?
vii. How much will it cost including training time, installation, setup, rollout, etc…
viii. A list of references you spoke with (you did do that, didn’t you?)
ix. Your rollout, measurement, and constant improvement plan
x. The people and departments that will need to be involved and how much time you’ll need from them to be successful
Well that sounds easy, doesn’t it? Actually it is and the process yields good results, good decisions, and makes investments yield more.
Learn more about this general topic at the following Wikipedia site: https://en.wikipedia.org/wiki/Engineering_economics
Don Henrich is an accomplished technology veteran in both the MCAD and the AEC industries. As Chief Operating Officer of Assemble he is responsible for strategic vision, sales, marketing, customer support, partners, and field operations. Don and his wife Noel have three children, reside in Marblehead, MA and spend as much time as possible sailing on Massachusetts Bay.
If you enjoyed this post, please help it spread by emailing it to a friend, or sharing it on Twitter or LinkedIn.