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Crystal Reports Tools: Improve Performance While Saving Time and Money |
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Crystal Reports and Financials: Monetizing ProjectsMany IT projects and purchases get proposed or started for reasons that aren't monetary. For example, maybe you want to buy Report Analyzer so you can stop wasting time on the same problems day after day. Or you just want to standardize report structures because that's the right way to do the job. Or, to take another example. Maybe you want to buy a report scheduler so reports will go out at whatever hour works best for your personal schedule. These reasons are hard to sell to management. You're going to spend the company's money just to make your life easier? The answer is probably not going to be a resounding yes. But you've already mastered this concept. You propose purchases based on less obviously personal reasons. For example, you propose buying the cViewSERVER automatic scheduler that runs as a Windows service because it gets you around several sticky security issues that would otherwise present themselves. You might get approval based on the idea you are preventing security breaches by eliminating the need for a person to log on to run an application and either sit there and wait while reports run or remember to come back and log out in a little while. But then, you might not. And so it goes with proposal after proposal. A great idea that will make your job more efficient just doesn't approved. One reason efficiency doesn't sell is that most system administrators and report developers work on a salary. If you have to spend an extra 10 hours a week doing your job, that's coming out of your personal time rather than the company budget. Or if you get bogged down working every weekend for several months straight trying to isolate a problem when Report Analyzer could allow you to do so in less than an hour, what does that matter to the company bean counters? So, there you are. You are highly motivated to make the purchase but your gatekeepers don't share your pain or your motivation. Their situation is the same, whether they spend the money or not. Or, is it? You need to make sure they answer that question with a resounding no. And you do that by monetizing your project or purchase. We'll just call it a project to keep things simple. |
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Businesses run on cash flow. Business decisions are, for the most part, monetary. If you want managers to decide things a particular way, you have to show them the money. But how can you monetize the fact that you don't like sacrificing your weekends when a moderate investment in a software tool can make doing so completely unnecessary? You have to look outside your own perspective. If the problem is important enough that you are spending weekends working on it, that means someone else is suffering also. For example, maybe the accounting department has incurred costs due to billing errors resulting from this problem. Check with the sales department and see what pain they have had due to this problem. Maybe the purchasing department has lost discounts or has paid premiums. Perhaps the customer service department can give you horror stories on support issues, product returns, service callbacks, or whatever. To properly monetize a project, you have to find out what the costs of not doing it are. These costs will be:
In other words, you need to show how lack of this project is either causing your company to spend money or how doing this project will allow your company to have money it presently leaves on the table. As you collect information on what these cash outflows and inflows are, keep in mind it's very important to have reliable backing for every number you come up with. Track each number to its source (a spreadsheet is a good tool for this). For example, you are going to include the $1,100 per month cost of rebilling customers. Who gave you this number, and how did that person come up with it? Be able to show the validation of the data or don't use the data. With actual costs, this is pretty easy advice to follow. With positive cash flows not now realized, it is much harder and you will have to be especially diligent. Don't grab at big numbers just because they help you make your case. Remember, the bean counters are obligated to try to shoot holes in what you give them. If it's not solid, don't use it. Once you have all of the cash flow (positive and negative) information, crunch the numbers to show the following information:
This is what financial managers live by. Excel can calculate the NPV from the cashflows. From the CFO's viewpoint, this is the information that matters. If you also need the backing of managers who don't have much input on the company's budget, you may also need to provide ROI figures in percentage format. That would be the Internal Rate of Return (IRR) or Modified Internal Rate of Return (MIRR). Let Excel calculate IRR from the cash flows. Some managers want to see the payback figure, as well. This is completely irrational from a business management standpoint as anyone two weeks into a business finance course can tell you. But when in Rome.... Now you can present a very different picture to management than you did earlier. Now you are showing the costs to the company. You are not asking for any favors, you are not asking for a bigger slice of the budget pie for your department. You are not complaining that your job is too hard or that you would like to drop down to 65 hour work weeks because you can't remember the names of your kids anymore. The decision to back your project is no longer about you. It's about the company. You have monetized the project based on costs to the company rather than any personal costs to you or even your department. In addition to getting your projects approved, this approach shows you can think in larger terms. That can't be bad for your career. Along those lines, here's another tip. After project implementation, collect data again to see what the actual cash flow changes are. Run the ROI calculations again. Send these to your boss two weeks before your next performance appraisal, along with a note that this information is critical to that appraisal. Bosses can argue arcane things to deny you a raise or promotion, but it's impossible to argue against documented success when that documentation includes strong financials. Look at it this way. If you send your boss financials showing that you added $567,824.63 to the company's bottom line in the last year, it's going to seem awfully petty to argue whether your raise should be $3,000 or only $2400. Any project worth doing is worth monetizing, and vice-versa. If you can't monetize it, then use your time to go after projects you can monetize.
This article is copyrighted by Crystalkeen, Mindconnection, and Chelsea Technologies Ltd. It may be freely copied and distributed as long as the original copyright is displayed and no modifications are made to this material. Extracts are permitted. The names Crystal Reports and Seagate Info are trademarks owned by Business Objects. |
