Business Case for Change


Green Light Your Business Case for Change

You have a compelling case for change but how large are the risks, what are the potential rewards, and who needs to be convinced? By covering all your bases you’ll increase your chances of getting a green light to move forward.

As logistics leaders, we frequently craft internal investment proposals that promise to improve business advantage, reduce cost, or improve productivity. But a huge challenge we face can be summarized by Martec’s Law (Figure 1), which notes the huge difference in the rate at which technology changes versus an organization’s ability to absorb it. Even when our ideas appear to be clearly a priority, beneficial, and low risk, there may be hidden variables that can become barriers unless we anticipate and plan for inevitable objections; you will need to clearly articulate why your initiative is a change that should be embraced.

Figure 1. Martec’s Law

We at ScanData have years of experience helping our clients build the business case for change – and we’d like to share our learnings with you.

THE PATH FOR CHANGE

1- Start by assessing the magnitude of your proposed change. Underestimating organizational impact is the leading reason internal proposals are denied. Remember, requests that require change, no matter how small, are packed with emotion. Do your homework by first understanding the breadth and depth your proposed change. Determine if it’s foundational, incremental, or transformational (see Table 1).

Moreover, get an understanding your organization’s historical appetite for change. If it has been low, you may need to pitch a phased approach where a series of efforts are reviewed and approved before moving on to the next stage. If the organization has historically taken on big risk to achieve things such as first-mover-advantage, study how the leaders of those initiatives got a green light and later managed the effort. Bottom line, know how your executives feel about risk and how their attitudes may have changed over the years.

Table 1. Inform your sales strategy by first classifying your idea as foundational, incremental, or transformational.

Why change? For example:

Foundational change

Low risk, small-to-medium reward

These proposals adjust foundational processes already in place that are working well but need modernizing.

Often don’t require new investments in technology or resources. Focus is on process changes or technology enhancements.

Make a shipping process change that will improve Ontime Delivery by 10-20% or upgrade your carrier version to take advantage of new services.

Incremental change

Medium risk, medium-to-high reward

Reduces costs by 10-30% to achieve a higher outcome, often through more automation. Presents a tougher sell due to an ROI that may not be realized for several months, or even a year or two.

Often proposes leading-edge technology where success stories already exist.

Invest in technology that will enable Carrier/Ship Method agility like rules-based and/or multi-carrier rate shopping.

Presort packages to take advantage of Zone Skipping.

These types of changes could reduce shipping costs by 30%.

Transformational change

High risk, high reward

Delivers breakthrough, versus marginal results (like over 50% reduction in costs) to achieve a significant competitive advantage.

Often proposes dramatic technology and infrastructure changes. Technology changes can often be bleeding-edge.

Implementation of a significant change to the fulfillment strategy that dramatically reduces cost and time-in-transit through Ship-From-Store (SFS) and/or Buy Online Pick Up in Store (BOPUS).

2- Tell the big picture story, supported by data. Articulate the story of how your vision for change will improve the lives of your customers and your business, supported by data. Use stories (e.g., case studies) of how other organizations achieved similar benefit. Once you get heads nodding, you’ve reached “agreement on need,” that is, the critical prerequisite to selling the details. While this may seem obvious, dig deep into your data to model the ROI of your investment proposal assuring it’s not built on hopes and dreams rather true analysis. Structure layers of data to support the ROI. Predict objections (and be ready for them) by listing the objections you would have if being presented with the idea. Understand there will be many objections that you may not feel are rational – human cognitive bias has been well documented as a reality and while not logical, these barriers have to be addressed. As Walter Cronkite once said, “know your audience.”

3- Highlight how you’ll reduce risk. As with any sales call, formulate specific ways you’ll reduce, even potentially eliminate, the risks associated with your idea. Every change creates some level of discomfort, and even the rank-and-file will resist change if it doesn’t serve their interests. Show how you’ll reduce perceived risk with employee communication, vetting of any required outside vendors, training, or proofs-of-concepts – especially important in transformational change – that will flush out any risks in a contained test environment before you move to broader implementation. Risk management is a discipline within in its own right. (If risk management techniques are new to you, seek out help from people in your organization that have experience in risk mitigation.)

4- Recruit a team of advocates. Project approval in the logistics space rarely lies in a single department. Start to build an alliance of cross-functional advocates to help grease-the-skids. As the Logistics or IT Subject Matter Expert you will require buy-in from financial, operational, technical, and strategic stakeholders. Gain a solid, irrefutable understanding of how various stakeholders are evaluated (including those that answer to the board). Be prepared to alter your position as you learn how your proposed change will be affected by organizational politics.

IN CONCLUSION

The Heraclitus quote, “the only thing that is constant is change,” certainly sums up our industry. You will likely repeat the cycle above again and again, as such:

Set priorities and learn from history. Ideas for change typically outnumber available resources. Table 2 may help you prioritize multiple ideas and where they stack up with others you see your organization evaluating. You should also get familiar with successful initiatives within your organization and others in your industry and use these stories to formulate your approach. Be ready to change your viewpoint on the initiative as you learn more. As Mark Twain may (or may not) have once said, “It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.”

Table 2. Prioritize your ideas by plotting them in a 2x2 matrix to understand how their relative business value aligns with your internal capabilities.

Show your passion and resilience. You are likely one of the most passionate people in your organization regarding any changes you are requesting. Just because others aren’t as passionate as you are about the topic, don’t give up. You have taken the time to build a good story, but you still need to be prepared to tell it over and over. Don’t be discouraged as this is normal. Organizations look for people who are willing to fight for their beliefs. The path to a greater leadership role is never easy, but worth it if it’s what you want.

LET'S TALK

We realize this piece is very high-level, and if you’d like to drill down on any of our recommendations, please reach out to us with questions or comments. We also welcome opportunities to deliberate or dispute our insights and recommendations – no conversation is off limits. You are an expert and we'd love to speak with you.

ScanData Systems

ScanData, the leading provider of parcel transportation management solutions (PTMS), has over thirty-one years of experience in the development and deployment of parcel shipping solutions.


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