Posted by: datango AG | October 15, 2010

“How much does it cost?”

Five words that will have sales people everywhere shuddering! Let’s be honest, they hate that question.  Why? Because that’s the question that requires that they justify the actual value of what they propose you should spend on their solution. When discussing ‘user adoption’ for enterprise applications, these costs are typically counted in terms of software, documentation and training services, end user travel expenses, etc. and justification is often derived on the basis of ‘we have to do it’ or the whole project falls over (which is as good a reason as any, I’ll grant you). The problem with that approach though is that you end up with a ‘check the box’ mentality that invariably leads to a ‘train users?’; ‘check’ and not an approach that really cuts to the chase of what an appropriate end user adoption strategy should look like for the organization. Maybe a better question to ask is ‘what’s the cost of not doing it or of doing it poorly?’ Here’s a couple of experiences where the answer to that question really begins to focus the mind and get into the real cost drivers for a successful user adoption initiative:

One of our clients, a large financial services company, had a loan processing/origination application that was tied to credit reporting agencies. Their driving force to increasing user adoption of the system wasn’t a new rollout or upgrade, rather a data entry problem that resulted in denied loan applications which, ultimately, could work through to their clients credit reports. The cost for the bank to correct these errors ran into thousands of dollars in each instance. So, they embarked on a user adoption initiative with the ethos that prevention was better (well, cheaper anyway) than cure and the problem at hand guided the methodology and approach used to ‘solve’ the problem.

It struck me that the same thing occurs in retail all the time. Not necessarily in ‘costs to remedy’ but in the ‘opportunity cost’ of a failed transaction. I was in a store recently when someone in line in front of me came back with some returns. The cashier clearly hadn’t processed many returns and proceeded to grapple with the POS system before calling another cashier from the register opposite to assist. All the while, lines begin to form at each register. Eventually, at least 3 shoppers abandoned their baskets during the delay and left their selections un-purchased (that really should be a word if it isn’t already). What’s more, another staff member now had the task (at the retailer’s expense) of returning this unwanted merchandise to the shelves. Again, a user adoption challenge in the context of the implications of failure which also indicates the likely improvements the firm would need to make in order to solve it appropriately.

In the past we’ve read that Gartner indicated that successful projects they studied budgeted 17% of project spend on effective end user adoption activities. From a datango perspective, we rarely see projects that budget even half that number but rather that debate the right amount to spend (or what should it cost), maybe the better question is what does it cost if we do it poorly. With that information we’ll then be better positioned to not only understand the criticality of the initiative in the context of the organization’s goals and plans, but also gain important insight into the true problems we are trying to solve. And it’s the nature of the problem that will determine how you execute your user adoption strategy in order to successfully address it. Only with that information can you begin to develop requirements and really figure out what this stuff is really likely to cost…

-Steve, datango

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Responses

  1. Hi Steve,
    Great post – but can you tell me where to find the Gartner study you refer to?

    • No problem Morten, the 17% comes from a Gartner research note dating back to 2000 and represents the ‘high’ watermark in budget allocated to training (our opinion). The actual note in question is by Clark Aldrich, “The Justification of IT Training”, Gartner Research Note DF-11-3614.

      Best wishes,
      datango

  2. That’s nice but we would still like to know how much it costs!

    • We’ll happily tell you what it will cost for our solution.

      The price depends upon the modules required, number of individuals involved on the project (and their roles/software they will need to access), plus the volume of end users, and the enablement services that you’d like our consultant(s) to provide, we can give you a firm price. If you’d like to setup the brief call so we can walk you through the salient questions, I can have one of our sales team members reach out and give you a price.

      Let us know!
      datango


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