Struggling to Convey Tech ROI to Clients? Discover Effective Strategies!
Hi. I'm Max Clark, and you're calculating ROI wrong. And I know you're calculating ROI wrong because I calculated ROI wrong for more than 2 decades. And it was a a relatively recent epiphany talking with a client that really highlighted this to me. So I'll give you an example related to disaster recovery, business continuity, and I'll give you one for cybersecurity.
Speaker 1:So any sort of Doctor planning. The impact, it's calculated usually in soft costs. Right? So practitioner, you wanna have a redundant network circuit. You wanna have tape drives.
Speaker 1:You wanna have backups. You wanna have off-site. You wanna have all these things that you're supposed to have because they're good and they're good for the business. Right? Having a redundant Internet is not a bad thing.
Speaker 1:It's never a bad thing. It's always a good thing. So don't get me wrong here. But in the process of doing that, you say, okay. We have an office with a 100 people and we calculated the average wage of these 100 people to be this much.
Speaker 1:And so at an 8 hour outage cost the company this much money. And so therefore, we should go out and we should buy this redundant network connection, which for the year is gonna cost us less than a tenth of what a days of outage is gonna cost us. And you build a very compelling case and you've got your argument and everything's wonderful and you look at that and you go, this is rock solid. You give your presentation and you get crickets or you get scotch. Thank you very much.
Speaker 1:We're not gonna do it. And you scratch your head and you just you get frustrated. You don't understand why because it's so obvious. Spending $6,000 on a secondary Internet connection is gonna save you $600,000 in lost productivity and outage because the network went the primary network went offline, but nobody seems to care. We can take this and we can use the same thing with backups and tape drives and and off-site and business continuity solutions, cybersecurity.
Speaker 1:We need to have this fill in the blank. We need to have a EDR in place. We need to have a SIM in place. We need to have a FIRR in place because we have to protect ourselves against the breach. Because when a breach happens, we're gonna and the same thing.
Speaker 1:It's the response that you get is very confusing and you don't understand it. And part of the psychology that comes into this is there's nothing perceived it's not a perceived loss. You're already the company's already paying salary. It already has hired these people. They're already there.
Speaker 1:They're being payroll is running automatically. Losing a day of of payroll is you already have vacation schedule, vacation days, and PTO is built into this. And it's doesn't get perceived as a loss. There's the loss could trying to pitch an ROI against loss aversion when you're not pitching to something that's actually even considered a loss just doesn't get you anywhere. It's crazy.
Speaker 1:Just doesn't make sense. It's just the psychology of how this gets looked at. Now gets looked at as a loss and how do you pitch this properly and how do you relate to this properly is actual loss and production loss and productivity loss and target loss. So some things are really easy to explain. So in manufacturing, right, if you've got a line and that line goes offline for 4 days and you lose 4 days of production, your point is that you've lost 4 days of production and you can never get those 4 days back.
Speaker 1:Now maybe if that plant isn't 247, you could figure out how to run longer shifts and you can play a bunch of overtime and you can get that production back. But now what you're losing is you're losing the actual output of the business. And this is when your people pay attention and perk up in their seats and turn towards you and start start looking at this because here's real loss you have a client deliverable a client that that production has to be turned around at x period of time for your client otherwise you lose future revenue from that client or you have to pay penalties to that client right so now you're getting into language of business loss the same is true I've seen this used with software development teams right so the thought of per se losing access to a production system for a day doesn't trigger it. But when you say you're gonna lose developer productivity and engineering productivity for x period of time. Right?
Speaker 1:So if you have a major cybersecurity incident that requires you to reimage or redeploy all of your laptops and desktops. Right? And that's gonna take you a week to 2 weeks to do. And now you're talking with a VP of engineering who has a who has a sprint schedule. If you look at that VP of engineering and say, you are going to lose 2 to 3 weeks here, it's gonna be gone.
Speaker 1:Like, it just doesn't exist. What does that do to your product cycle? Or you're talking to a CPO, you're talking to a product manager, something along these lines, and you explain it to them in language of what they actually care about. So what do they care about? You have to figure out what the side the person on either side of the table cares about.
Speaker 1:So again, if you're dealing with a product manager, shipping product they care about. Now if all of a sudden something happens where they cannot ship product and their schedule goes out the window, they care about that. VP of engineering is going to care about that. Telling the CFO that you cannot close your books and you are going to have to file with the SEC that you cannot close your books because of some incident. And there is going to be a filing that you have to sign and notify the SEC, and you're gonna have to deal with that.
Speaker 1:Right? Different language, same event, same end goal, just different language. And what we collectively do a really bad job of in the IT space is communicating with people in their language and walking and and sitting on the other side of the table and really being a partner with the business because it's really easy to talk about it in IT language. It's really easy to build ROIs in IT language, but it's really hard to actually understand what the other side is doing. Talking to a salesperson.
Speaker 1:Why is it important that we do x, y, and z? If you're talking to the CRO of the company and you always send you say, we're not gonna hit your revenue targets because of this event. Right? If your BDRs or SDRs cannot make a phone call for 2 and a half weeks. Right?
Speaker 1:And think about this in terms of a quarter. How many weeks in a quarter are there and now you're gonna lose 20% of that productivity in that quarter, you are not gonna hit any of your numbers. That CRO is gonna pay really close attention especially if they've had an experience like that that's prevented that from happening. So as an IT practitioner, your job is to enable the business and to keep the business running so the business can meet its objectives. And business objectives are sales and service delivery or product delivery.
Speaker 1:Right? So think about it in that sense. Right? Marketing exists to create awareness to drive sales. Sales exists to close business and drive revenue.
Speaker 1:Product to service operations product, whatever, however your actual the company has organized what it does. It exists to create the product, to deliver the product and to service the customer. So when you're talking with your internal partner one of these other departments they are not gonna understand you if you're talking about LTO drives In meantime, what's your RTO RPO target? If you use that language with somebody, I mean, you're gonna see their, like, eyes are gonna gloss over and they're gonna be gone. And so what's critical is really just to understand who you're talking with in their side and give it language they understand.
Speaker 1:Like hey if this event happened what are we trying to do here is we're trying to prevent this event from happening because if this event happens the outcome of this event is x CRO you're not gonna meet your quarter and that impacts a whole bunch of things for them right it affects budgeting, staffing, bonuses, what people's variable comp on their OTE plans are. Can people hit quotas? The does the CRO themselves quota for the organization? Does the organization hit their targets? Are you talking about crossing over into the finance?
Speaker 1:What happens if the organization doesn't hit its targets financially? What does that mean? Does that impact that service? Does it impact how your investors are looking at you? I mean, just up and down the stack.
Speaker 1:So anyways, circle back around. You have to not take the lazy way out. Don't take the lazy way out. That's just what I say. Not to say that it's lazy to go and figure out what the average cost per hour is for your company's employee base because it's takes a lot of time.
Speaker 1:I mean, I've done this a bunch of times and it was unsuccessful every single time. What's more important is to actually figure out what's important to the person you're talking to and express it in ways of helping them meet their goals right and if you can figure that out and if you can cross that bridge you're gonna be much more successful actually providing the value that you're trying to provide in the 1st place, which is giving them what they need in order for them to be successful and for you to be an enabler of that success, which is what you want in the 1st place. So don't do our ROI wrong. Do it right. Make a small change.
Speaker 1:You'll be much happier. You'll get what you need and what you're actually trying to do. Let me know if this was helpful or if I was completely wrong or if you think that there's a better way of doing this, comment below. Otherwise, I'm Max Clark. Talk to you soon.
