Defining ROI Benefits and Business Case Models for EIM

In an earlier post, I outlined the seven steps you need to develop a business case for enterprise information management (EIM) initiatives. This post digs into two of the most important steps: defining the benefits you should use as criteria when making your business case, and determining the type of business case model you should use.

To review, the two steps are:

  • Define the types of benefits to use as criteria. Ask: Which benefit type (or types) align most closely with my organization’s corporate business goals? These are the benefits that are most likely to get the attention of executive management, whether they are a single one or a ranked combination of goals such as cost reduction, revenue lift, risk mitigation and compliance, business continuity, or something else.
  • Choose the type of business case model: Next, consider the various types of business cases. There are different circumstances in which each type of business case is appropriate. Your approach may be one or a combination of the models. Your goal here is to create defensible scenarios to demonstrate how your proposed initiative will provide quantifiable return on investment (ROI), not just an enumeration of the soft benefits.

Types of Benefits

Dig up the documentation of your organization’s defined business priorities, and evaluate your proposed initiatives by how well they fit those business priorities, and prioritize and present them accordingly. Here’s a partial list of potential business priorities, with definitions and an example of an EIM-related initiative framed in language to show how it supports that particular business priority:

  1. Cost reduction: Benefits that decrease the hard-dollar costs of business processes (Example: imaging and e-forms technologies to reduce the amount of paper in business processes.)
  2. Revenue lift: Benefits that help the organization increase revenues. (Example: customer communications technologies that integrate with line-of-business systems, allowing for cross-selling and up-selling to existing customers.)
  3. Risk mitigation/compliance: Benefits that improve the organization’s ability to reduce corporate risk or facilitate its ability to comply with regulations. (Example: records management technologies that make it easier to manage discovery-related information in the event of litigation.)
  4. Business continuity: Benefits that improve the organization’s ability to ensure that mission-critical functions and services can continue uninterrupted during and after a disaster. (Example: imaging technologies and mirroring of repositories to ensure up-to-date copies of business-critical documentation and data are maintained in geographically dispersed locations.)

Types of Business Cases

Also understand which type of business case is appropriate for your initiative and therefore most likely to speak to executive management at your organization. The classes of business cases include the top-down, the bottom-up, the reallocative, the retrospective, the embedded, and the reformative. Again, for each type , I provide a definition and an example of an EIM-related initiative framed in language to show how it supports that particular type of business case:

  1. Top-down: A top-down business case is typically an organization-wide business case that highlights macro-level EIM benefits at an enterprise level. These tend to be credible only for hourly wage/variable capacity types of workers, where capacity planning can be directly affected with even minor efficiency gains. (Example: Making information more easily accessible to customer service reps in call centers throughout the organization, thereby reducing time required to service calls.)
  2. Bottom-up: This is generally a more credible and more successful approach. It tends to be more precise for knowledge workers and also works rather well on the process worker-related activities and tasks, where certain patterns tend to recur in many areas. Not only can a particular line of business benefit from a process-level drilldown, but those same EIM usage patterns can be applied to other processes with similar characteristics. (Example: New Account Origination optimization through imaging, e-forms, and workflow, which presents usage patterns similar to Retail Mortgage Processing.)
  3. Reallocative: This class of business case focuses on reducing costs from one area and allocating the savings to another area. (Example: Suppressing print for customer communications and reallocating those savings for modernizing the personalization platform for electronic customer communications.)
  4. Retrospective: The retrospective business case focuses on analysis of a particular event or scenario and demonstrates how the outcome would have been different if EIM technology were in place. (Example: an instance of litigation discovery, showing the actual costs of the discovery event and the cost reductions with EIM technologies in place.)
  5. Embedded: This class of business case focuses on demonstrating the ability of EIM to enable an existing and already funded initiative, where EIM acts as an enabler for the in-flight effort. (Example: Using the document management and records management capability sets of EIM to enable archiving for an ERP initiative that is already funded and underway.)
  6. Reformative: The reformative business case tends to highlight the structural, business model-related or highly strategic changes that require aspects of EIM in the critical path. (Example: A business model, such as outsourcing, that the organization seeks to pursue, where EIM technologies such as digitization and process automation are prerequisites for undertaking a distributed sourcing environment.)

Don’t underestimate the importance of either of these two steps. It really does come down to what your English Comp teacher drummed into your head all those years ago: Know your audience. Frame up a business case that uses as its criteria the benefits that matter to executive management at your organization, and use the business case model (or models) that presents defensible scenarios of how your proposed initiative will provide your organization a quantifiable ROI.

Rich Medina
Rich Medina
I’m a Principal Consultant and co-founder of Doculabs, and the resident expert in using ECM for information lifecycle management.