How to Build a Business Case for New Membership Software

Replacing your existing membership software is going to be one of the largest investments you’re ever likely to make in your career. You may have started a new role with your association or you might have been there for a long time and can see that there are opportunities you’re not addressing with your current technology. You may be working with legacy software that just doesn’t work for you any longer and it’s time to do business a little differently.

Whatever the reason, the result is the same: a new system costs money.

While you may know why it’s time for a change—and why a capital investment needs to be made—your board doesn’t. So how do you build a business case to get board support for a new membership system?

Go Beyond the Numbers

association board management & membership softwareBuilding the business case to get the investment required starts well before the board reviews bottom line costs. In fact, John Walker, an independent IT consultant with COTIQU Consulting in Australia, suggests associations should plan on making two visits to the board: the first to present the business case and the second to discuss actual cost estimates.

The business case presents your proposal for change. This is where you’ll outline the opportunity cost for staying with the system you have. “You don’t necessarily need to quantify the actual costs of what a solution is going to be or speak to the cost of that implementation,” Walker says. “What you need to do is present to the board a case for change. And the constraints that you’re facing could be inefficiencies at the operational level, or opportunity cost. But the case has to demonstrate that it is time to do something.”

It can be extremely compelling to show that, given the constraints of the current system, your organization might stand to lose out on x number of members and x number of dollars. The outcome of your first meeting with them should be, then, that you’ll be given the approval to execute a selection process.

Notice that the first step doesn’t include a discussion about new system pricing. At this point, it’s too early in the process. And, Walker says, beware the temptation to mention ballpark pricing. While the number you discuss early on may be an estimation to you—that’s the number the board will remember. Without your requirements in place, that ballpark figure is meaningless and can do nothing but damage if you include this in your initial presentation.

The Difference between ROI and TCO

board approval for new membership softwareIf you feel the board will want to talk numbers in the initial meeting, then return on investment (ROI) is what you’ll want to focus on. Think of the ROI as a justification for the investment and the total cost of ownership (TCO) as what the bottom line cost will be. The ROI belongs in the first meeting, the TCO shines in the second.

“An ROI can be quantified in terms of operational inefficiencies inside the organization,” Walker says. For example, the return can manifest itself in solving operational shortcomings. Say you’re keeping member data in your finance system, your CRM, and in an online member directory. You can show the ROI of a new system by profiling these inefficiencies and proving the pain these cause on your members. Be specific and have the numbers to back up your case.

The ROI is, in effect, the pain you’re walking away from when you move to a new system.

TCO, on the other hand, is a forecast of the opportunity you have with the new.

Arriving at the total cost of ownership is where you’ll spend the bulk of your time between meetings with the board. This shows the outcome of your selection process, where you define your requirements, determine the upfront investment, and outline the ongoing operational costs. There are several factors that go into determining the total cost of ownership, and it’s best to make sure, when comparing systems, you get to as close to a direct comparison as possible.

The Final Meeting

When you meet with the board the second time, you’ll have a project plan in place that shows the outcome of the selection process. According to Walker, a solid project plan contains:

  • the project structure
  • stakeholders and their roles and responsibilities
  • identified risks
  • a total cost of ownership modeled over three to five years
  • what’s in and outside of scope
  • the governance that’s going to control the project

This is your chance to get everyone in alignment early on so that all sides are comfortable with the approach and well-defined expectations are set.

Before you begin to consider association board management, you might be wondering, “How much does an AMS cost?” Download the Pricing Guide to learn the six factors that impact pricing and what you can expect to spend on a new system.

 Pricing Toolkit for Membership Software

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