Promote the Value of ROI

That preparation may mean arming your contacts with the facts about return on investment (ROI). For many VARs, the days are increasingly scarce when they can talk long-term IT strategy with their clients, and ROI can be key to closing a deal.

"Our conversations used to be 50 percent about business advantages and 50 percent about saving money," Siemens' McNamara reports. "But now, about 70 percent to 80 percent are saying, 'Can you save me money, because I have to free up money for disaster recovery' or 'Stop spending, because our revenues are going to decrease and I get my whole budget re-evaluated in two weeks.'" Conversations, McNamara says, are shifting toward ROI in terms of cost, not in terms of value.

The problem is, only 38 percent of the VARs queried in VARBusiness' SOM survey currently discuss ROI with customers. Many solution providers say they feel an ROI analysis is an unconvincing measure of the worth of an IT investment. When they do discuss ROI, the percentage of return they offer tends to be in the 20 percent range, although 16 percent of the VARs surveyed say they offer an ROI of 50 percent or greater.

In some cases, however, ROI is a less significant indicator of a project's worth than other financial measures. "Sometimes when we're dealing with the CEO, we may get into discussions about ROI, but with an

outsourcing contract, it's not as key as how much cost it will save them and what kind of tools it will provide them to do what they do," Fiserv's Muma says. "All of that could [eventually] be argued down to an ROI, but that's not the way they look at it."

Having a frank discussion about ROI isn't always easy, either. "We might have that discussion [about ROI]," Hand says, "but it's hard to quantify it unless you get to a place with the customers where they will openly and honestly identify their internal costs."

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