How to Get Budget Approval for Purchasing Software?

From the Series: Avoid Mistakes When Buying Any Software or Cloud Services

Money & Budgets - Are Funds Approved for IT Help Desk & Customer Service Software?
Whitepaper Series: Avoid Mistakes When Buying Any Software or Cloud Services
This whitepaper is part of a series to help avoid mistakes that even the most senior and experienced professionals make that cost companies a lot of time and money. Now, learn to approach the software and cloud services buying process in a much more rigorous and analytical manner.

Key Point: Approve and Set Aside Funding

  • Check in with CFO or others that control funds.
  • Do not invest time until have iron clad assurance that funds are approved and set aside.
  • "Find the right product first and then we'll find the money". Don't believe it!
  • What does company pay today in recurring annual costs? It's a bucket of money already available.
  • Be a hero! Find a replacement product for less than the bucket. Consider cloud services.
  • Be honest with vendors about approval of money. Misrepresenting will kill your creditability. They log conversations in CRM systems.
It is important before spending a lot of time on the project to meet with your CFO and ask a lot of questions about project funding approval. The only activity you should be doing before discussing funding approval is determining if check signers have any pain points. Giva has written a very informative white paper entitled: Do Senior Leaders Have Pain Points? - IT Help Desk & Customer Service Software
There is a "new normal" in today's business environment that dictates careful analysis and justification when spending money for software purchases. Money will be a big hurdle to overcome. If your CFO will not give you iron clad assurance that money is approved and set aside, then you are just wasting your time. It is extremely important to ask questions, and poke and prod in this area in the very early stages of the project. You should be doing this before wasting any of your valuable time engaging with vendors or in any other activities.
The fact is you have a limited amount of hours in your work day. You could be spending your valuable time on call volume reduction projects that will deliver tangible business results (i.e. hard dollar cost reductions, increases in customer satisfaction or increases in revenue) to your organization that you can point to at your formal evaluation time when pay raises and bonuses are determined.
Often, project leaders will not ask senior level leaders or check signers the very hard questions about funding approval. Everybody comes to the work place with different and mostly negative notions about money and power. We all have thoughts, ideas and conditioning about money. For example, it is not polite or even professional to ask about money or push others for firm monetary commitments. Of course, to make matters worse, most companies also have dysfunctional cultures about how money and budgets are handled. Control over money is power, and company decision making about money is often shrouded in secrecy and lacks transparency.
Negative notions about money and dysfunctional company cultures will force many project leaders to become ineffective and operate disconnected from fiscal reality. With no firm assurance that money is available, project leaders go off and waste a lot of their time trying to find the perfect solution. Once they find the solution, they are often disappointed to learn, "Sorry, no money is available, budgets are tight!"
Instead, if they had probed and pushed senior level leaders for an iron clad commitment early in the project, the commitment would have never come. They would have saved themselves a lot of time and energy and could have done more valuable work for the company. At your annual or otherwise performance evaluation, all the wasted work (i.e. documenting requirements, product demonstrations, analysis, vendor engagement, etc.) will be of no value to your company and you. Paradoxically, you may be subtly blamed for spending so much of your time doing this work with no results to show. Only an experienced senior project leader will understand this last point.
Look your CFO or other senior level leader in the eyes, listen carefully, and read between the lines. Listen to what is not being said, and do not believe just what you want to hear. Watch their body language. Although check signers may not be in pain, your department may be in pain. When you are in pain, it will be natural for a senior leader to want to show some empathy. The senior leader may feel bad that the project cannot be funded right now. Instead, they may ask for an exhaustive analysis in the hope that you may get side-tracked and are unable to focus on producing this analysis. Sometimes it is just human nature to want to avoid giving bad news. Poke, prod, ask questions, and then carefully listen to the answers.
When you meet with your CFO, ask what you are paying for annual software maintenance, forthcoming upgrade fees and consulting fees for your current call tracking system, if you have one in place. This is a bucket of recurring expense that hits the CFO hard in the pocket every year with little to show in return. With cloud services, where you pay little or no upfront fees, you may be able to find a superior replacement product at a lower total annual cost. Go be a hero and find a better product at a lower price and save the company money! That is a project worth spending time and effort pursuing.
Of course, there are many other ongoing lifetime costs to owning a call tracking system than just these costs discussed above. As you well know, there are enormous amounts of labor required to generate reports/metrics and KPIs with many tools. Your company may also need one or more employees to manage and maintain the call tacking system for routine maintenance and ongoing configuration/customization. Giva has tools and white papers to help accurately measure these costs.
Of course, another problem is that some vendor account managers often live disconnected from the true economic reality of their prospects. They do not want to push and prod their prospects about whether they have secured approval of funds as well. They would rather just "go along" and not "make waves" and keep the sales process alive and going. They say, "My prospect would not be wasting time on this project if they did not have money, would they?" Unfortunately, this approach does not serve you well as vendor account managers turn into co-conspirators and undermine your productivity.
Embrace vendor account managers that are relentlessly inquisitive. Listen to the wise counsel of the questions they ask. They are pushing you for a reason. Your interests and the interests of an inquisitive account manager are completely in alignment. They do not want to waste time since they are paid on commission; and although you are not paid on commission, you are ultimately paid for productivity, output and high quality decisions.
In summary, if check writers do not have enough of pain and money is not available, then you are wasting a lot of time that can be put toward call reduction projects, customer satisfaction initiatives, etc. that will help you get salary increases, promotions, bonuses, etc. at your annual performance review.