Following are 10 steps to make it easier.
- Ask the Chief Financial Officer, Controller or VP for your company’s purchasing guidelines
- Determine the minimum criteria required to obtain approval for a purchase, including guidelines/thresholds for return on investment, net present value and internal rate of return.
- Get vendor testimonials and/or customer references.
- Identify the main 3 to 5 quantifiable benefits for the organization as well as the KPIs that can be used to measure results for each of these benefits.
- Ask the vendor for their ROI model or the vendor for their ROI model or assistance in quantifying the financial benefits from the purchase.
- Identify the payback period, ROI and NPV.
- Prepare a business case with the ROI model and explain why the purchase is essential for the department and the enterprise. Emphasize the quantifiable benefits that senior management looks for to justify investments and explain the qualitative benefits and how the solution will benefit the organization.
- Once the purchase is approved, put in place a measurement process to track its return on investment and impact on the organization.
- Document the results and share them with senior management.
- Perform a follow-up analysis 12 months after the implementation to show the ongoing benefits of the purchase. This will increase the chances of getting the next project approved.