How Chasing the Expectation Gap Kills Your ROI
When we chase a goal to the exclusion of all other considerations, we become blind to issues and often miss opportunities.
Building the theoretical perfect system can turn your project into an expensive white elephant. Attempting to deliver a “big bang” go–live threatens budgets and the viability of the solution, while keeping the return on investment (ROI) clock turned off.
This is well understood in the SaaS start–up community. Lean development using a minimum viable product (MVP) approach is a common mantra.
It is a way of thinking that forces teams to launch solutions as soon as possible so decisions can be influenced by real-world user feedback. No more guessing, no more assumptions.
High expectations are inevitable when deploying a product like NextService because it has the potential to transform your field service business. These expectations are based upon the promise to improve sales, reduce costs, and improve customer engagement.
It is exciting when a solution is found that will transform your business. Part of Next Technik’s sales engagement experience is built around ensuring customers’ appreciation of the potential (ROI) achievable by utilizing NextService.
Warning! Attempting to attain the whole ROI on go–live will keep the ROI clock turned off due to scope creep and delays. This erodes the total return achievable because that time cannot be recovered.
A gap emerges between go-live outcomes and expected outcomes of the business case, hence the term expectation gap.
Why does this happen?
After working with hundreds of customers on their ERP and FSM/FSP deployment, I conclude that projects frequently using a waterfall linear project management approach experience scope creep, go over budget, and often build solutions that include changes that have become redundant or are based upon wrong assumptions.
Projects that adopt an agile methodology that focuses on incremental steps and critical paths finish faster, deploy working solutions, and have happy, engaged users.
The challenge with waterfall is that the requirements get fixed too early. Agile, on the other hand, does not lock in requirements until done is done.
Customers who are already operating as an agile business completely understand. When I discuss the need to define a minimum viable solution so we can start the ROI clock, they always ask me how fast we can move.
Challenges with the Waterfall Approach
In waterfall projects, requirements are gathered up front, approved and delivered.
The requirements are based upon a current understating of processes built around systems that are being replaced.
The customer has no experience with the capabilities of the new system. The consultant does not know everything about the customer requirements. It is the average of two partially informed parties making decisions without testing it in real life.
This model of gathering requirements and then asking customers to decide on configuration options is deeply flawed.
Many compromises are made during the build phase. On go-live, users become implementation-fatigued, budgets are exhausted, and compromises become set in stone as there is no will or budget left to make additional changes.
Unfortunately, the relationship becomes a tug of war between the vendor project manager who is defending scope and the customer project manager who is defending billable. It can quickly deteriorate into an outright conflict and is the most common cause of project disputes.
A better way: the Minimum Viable Solution Approach
Rather than gathering requirements, the question to ask, is: “What is the minimum viable solution that will generate value by turning on the ROI clock as soon as possible?”
On an iterative basis, configuration is jointly reviewed by customer and consultant. For both parties, this is a confirmation and learning experience.
With such a tight project scope, a working solution is rapidly implemented and can be placed into production with no dependent components.
Requirements that are not part of the minimum viable solution are backlogged for optimization and business process improvement services.
NextService customers who adopt this approach frequently go live on scheduling and work order management within 1-2 weeks.
The product use case feedback received after the initial implementation often results in our customers prioritizing the backlog with quick wins first and complex builds last.
This is the exact opposite of the waterfall methodology which is always about front loading the project with the most complex requirements.
The Return-on-Investment Clock
The benefits and savings for NextService occur periodically as opposed to once off. Costs are saved monthly, sales increase monthly, and customer service levels improve monthly.
The longer we wait to turn on the clock, the higher the project costs become in absolute terms. This is different from fixed benefits that deliver all at once.
As a comparison, assume a customer has the following monthly ROI schedule:
- 20% improvement in scheduling efficiency: $5,000 per month savings
- Digital form 1 data entry: $2,000 per month savings
- Digital form 2 data entry: $3,000 per month savings
- Quotations in field: $10,000 (GM $3,000) new parts sales monthly
Return on Investment:
- Total monthly benefit $13,000. Total estimated solution $36,000
- Time to 100% return on investment = 7 months
- First year return of $120,000 or 330%
Waterfall implementations with “big bang” projects take nine (9) months to go live, eroding first-year ROI by $117,000 or 97.5%.
The savings lost during this time can never be recovered. In addition, we still encounter typical project risks of chasing the expectation gap and making too many compromises, which means not all the benefits may be realized.
On the other hand, using agile, the project would go live in stages:
- Month 1: Scheduling efficiency
- Month 3: Digital form 1
- Month 4: Digital form 2
- Month 6: Quotations in the field
In other words, the final project final go-live still takes nine (9) months; however, due to the stagged go-live, we have amassed $89,000 in benefits.
More importantly, the deployment is informed by user experience. Configuration decisions are made based on mandated business process that incorporate actual business practices. User adoption increases based upon continuous improvement.
Why it matters
- Return on investment is on a clock. The faster you start the clock, the greater the return.
- Agile delivers better and faster solutions. Configure, go live, check results, then improve.
- It never stops. Continuous optimisation results in large benefits and greater returns.
If you are chasing expectations from the beginning of the project and trying to forever close the gap, you will miss out on the benefits that are right in front of you.
What is the point?
If you could go live on field service management software and start the ROI clock in a week, why wouldn’t you? The longer you delay, the more money you are losing.
Modern field service management solutions like NextService are flexible, built to be changed, and meant to be implemented in stages. Rather than think of deployment as a project with a finish and end, think of go–live as the beginning of optimization.
Next Technik optimization services are more than just support; they make up a business process improvement program lead by a Customer Success Consulting team that specializes in leading practices for field service organizations.
Thank you for your attention. If you found some value, please connect with me on LinkedIn to catch future posts and feel free to ask for advice on how NextService can help your field service business with digital transformation.
You will have noted that customer experience is a theme of the post. We have a deep commitment to customer engagement and positive customer experiences at Next Technik — it is part of every conversation we have, every service we provide, and every product decision we make.
Next Technik (CTO), Field Mobility Native SuiteApp for Oracle NetSuite.
Klugo (Chair), Oracle NetSuite Solution Provider dedicated to enabling ERP for Field Service.
About Daniel Perry
A start-up generalist with extensive experience in product development, marketing, sales, service delivery, business operations, commercials, and finance. After successfully co–founding several start-ups in the cloud ERP sector, Daniel now regularly provides advisory services to early-stage start-ups or entrepreneurs still in ideation.
“Culture is strategy, align the hearts of your team by being a compelling leader focused on vision, values, mission, objectives and key results. Technology enables outcome, people achieve outcomes, technology must support people.”