A Business Case for an Enterprise Quality Management System
A Business Case for an Enterprise Quality Management System
A Business Case for an Enterprise Quality Management System
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A <strong>Business</strong> <strong>Case</strong> <strong>for</strong> <strong>an</strong><br />
Sparta <strong>System</strong>s, <strong>an</strong> industry pioneer <strong>an</strong>d leading provider of enterprise quality m<strong>an</strong>agement software<br />
(EQMS) solutions, enables businesses to safely <strong>an</strong>d efficiently deliver their products to market. Its<br />
TrackWise® EQMS, a trusted st<strong>an</strong>dard among highly regulated industries, is used by quality, m<strong>an</strong>ufacturing<br />
<strong>an</strong>d regulatory affairs professionals to m<strong>an</strong>age compli<strong>an</strong>ce, reduce risk <strong>an</strong>d improve safety across the<br />
global enterprise. Headquartered in New Jersey <strong>an</strong>d with locations across Europe <strong>an</strong>d Asia, Sparta <strong>System</strong>s<br />
maintains <strong>an</strong> extensive install base in the pharmaceutical <strong>an</strong>d biotechnology, medical device, electronics<br />
m<strong>an</strong>ufacturing <strong>an</strong>d consumer products markets.<br />
<strong>Enterprise</strong> <strong>Quality</strong><br />
M<strong>an</strong>agement <strong>System</strong><br />
WHITE PAPER<br />
To learn more about this topic <strong>an</strong>d how Sparta <strong>System</strong>s c<strong>an</strong> help, visit www.spartasystems.com<br />
Global Headquarters<br />
2000 Waterview Drive<br />
Hamilton, NJ 08691<br />
(609) 807-5100<br />
(888) 261-5948<br />
info@spartasystems.com<br />
Europe<strong>an</strong> Offices<br />
Berlin | London | Tel Aviv | Vienna<br />
europe-info@spartasystems.com<br />
Asia Pacific Offices<br />
Singapore<br />
apac-info@spartasystems.com
Today’s m<strong>an</strong>ufacturers face enormous challenges m<strong>an</strong>aging their enterprise quality <strong>an</strong>d compli<strong>an</strong>ce initiatives. Market trends point<br />
to even greater scrutiny of these ef<strong>for</strong>ts as pressure mounts from both consumers <strong>an</strong>d regulatory agencies <strong>for</strong> m<strong>an</strong>ufacturers across a<br />
broad r<strong>an</strong>ge of industries to deliver better, safer products <strong>an</strong>d services. To meet these import<strong>an</strong>t regulatory challenges, it is imperative<br />
that m<strong>an</strong>ufacturers have a quality m<strong>an</strong>agement system to m<strong>an</strong>age processes <strong>an</strong>d provide timely access to relev<strong>an</strong>t data, effectively <strong>an</strong>d<br />
efficiently. This paper will act as a step-by-step guide to help readers:<br />
Get started with the system selection process<br />
Lay out requirements <strong>an</strong>d identify the right internal stakeholders<br />
Set up the business case <strong>an</strong>d qu<strong>an</strong>tify the benefits of <strong>an</strong> <strong>Enterprise</strong> <strong>Quality</strong> M<strong>an</strong>agement Software (EQMS) <strong>for</strong> internal buy-in<br />
Introduction<br />
EQMS solutions are focused on m<strong>an</strong>aging, tracking <strong>an</strong>d reporting<br />
a comp<strong>an</strong>y’s quality m<strong>an</strong>agement processes, including incident<br />
m<strong>an</strong>agement, corrective <strong>an</strong>d preventive actions (CAPAs), audit<br />
m<strong>an</strong>agement, complaint h<strong>an</strong>dling <strong>an</strong>d ch<strong>an</strong>ge control. Most<br />
systems are industry focused with m<strong>an</strong>y having originated<br />
in the heavily regulated industries like medical device <strong>an</strong>d<br />
pharmaceuticals. Through the years, the needs of smaller<br />
org<strong>an</strong>izations have driven some EQMS vendors to include <strong>an</strong><br />
electronic document m<strong>an</strong>agement system (EDMS) or training<br />
m<strong>an</strong>agement (LMS).<br />
EDMS’ focus on m<strong>an</strong>aging documents electronically. They are<br />
typically “file-folder” based <strong>an</strong>d have limited workflows to support<br />
revision history <strong>an</strong>d ch<strong>an</strong>ge processes around ”unstructured<br />
content.” EDMS’ alone c<strong>an</strong>not support the more complex<br />
relationships of quality m<strong>an</strong>agement processes.<br />
If you’re on the team responsible <strong>for</strong> product quality <strong>an</strong>d<br />
regulatory compli<strong>an</strong>ce, you may have already determined<br />
that your org<strong>an</strong>ization needs to invest in <strong>an</strong> EQMS to drive<br />
greater control, consistency, efficiency <strong>an</strong>d tr<strong>an</strong>sparency. Now<br />
what? How do you convince your peers, supervisors, senior<br />
m<strong>an</strong>agement, directors <strong>an</strong>d other colleagues that EQMS is a<br />
worthwhile investment that will provide signific<strong>an</strong>t business value<br />
<strong>an</strong>d long-term competitive adv<strong>an</strong>tage?<br />
First Things First<br />
Be<strong>for</strong>e you attempt to build a business case <strong>for</strong> <strong>an</strong> EQMS, what<br />
do you w<strong>an</strong>t the system to be? This is one of the most import<strong>an</strong>t<br />
aspects that will have lasting consequences, benefits <strong>an</strong>d value.<br />
Typically, a large org<strong>an</strong>ization’s compli<strong>an</strong>ce needs <strong>an</strong>d regulatory<br />
oversight should look <strong>for</strong> the following vendor qualities when looking<br />
<strong>for</strong> the most appropriate solution.<br />
Industry Knowledge <strong>an</strong>d Experience: Vast Regulatory <strong>an</strong>d<br />
compli<strong>an</strong>ce experience will help you leverage the vendor’s<br />
both diverse <strong>an</strong>d industry-specific experiences in providing <strong>an</strong>d<br />
successfully implementing a suitable solution.<br />
www.spartasystems.com<br />
References: Gain immeasurable insight from peers who have<br />
already implemented EQMS solutions to help you figure out your<br />
unique needs <strong>an</strong>d identify best practices <strong>an</strong>d pitfalls to watch out<br />
<strong>for</strong>.<br />
Comprehensive Solution: While today you may be only<br />
interested in a smaller set of EQMS process, you may need a<br />
broader set in the future. Make sure the solution you choose is<br />
comprehensive, future proof <strong>an</strong>d provides end-to-end coverage<br />
of all EQMS based business process.<br />
Configurability: Stay away from solutions that are hard-coded<br />
<strong>an</strong>d shrink-wrapped under the guise of best practices. Even<br />
with a best practices baseline, you w<strong>an</strong>t to be able to con<strong>for</strong>m a<br />
solution around your existing processes through configuration,<br />
<strong>an</strong>d be able to create new processes as your needs exp<strong>an</strong>d<br />
without going back to the vendor. <strong>System</strong>s lacking this level of<br />
flexibility introduce risk <strong>an</strong>d additional cost <strong>for</strong> implementation<br />
<strong>an</strong>d validation.<br />
Integrated: The multiple processes <strong>an</strong>d best-practice based<br />
quality components should be integrated <strong>for</strong> optimum usability<br />
<strong>an</strong>d value. This will allow you to gain value as you generate<br />
reports <strong>an</strong>d increase visibility. Another consideration involves<br />
process <strong>an</strong>d data interch<strong>an</strong>ges with your existing enterprise<br />
applications like ERP, CRM <strong>an</strong>d EDMS which c<strong>an</strong> utilize batch<br />
processes or modern, real-time web services.<br />
2
Start of the <strong>Business</strong> <strong>Case</strong><br />
Those with little experience making business cases <strong>for</strong> investments in software or other enterprise systems may not know where to<br />
begin. This document outlines the critical steps <strong>for</strong> building support <strong>for</strong> EQMS investments. Sparta <strong>System</strong>s’ “Building a <strong>Business</strong> <strong>Case</strong>”<br />
toolkit provides additional templates <strong>an</strong>d worksheets that are invaluable <strong>for</strong> quality professionals at every level of experience.<br />
What follows is a suggested guide <strong>for</strong> how to build your case <strong>for</strong> EQMS investment. Your exact process will be tailored to the specific<br />
needs of your org<strong>an</strong>ization – what its approval process looks like <strong>an</strong>d where you are in the budget cycle. These unique circumst<strong>an</strong>ces<br />
will dictate which steps require the most emphasis. You may find that you c<strong>an</strong> move quickly through certain steps <strong>an</strong>d that you need<br />
to drill down more deeply into others. Building a business case is not always a linear process. You may gather all of the data you think<br />
you need <strong>an</strong>d then realize as you are preparing your pitch that you have to gather different in<strong>for</strong>mation all together. This is a normal<br />
part of building a business case. It is also almost certain that external factors will evolve as you move through the process, <strong>an</strong>d you<br />
should be prepared to accommodate those ch<strong>an</strong>ges <strong>an</strong>d shifts in a fluid fashion.<br />
People, Process, Data – Which is Most Import<strong>an</strong>t?<br />
Oftentimes, the numbers are what first come to mind <strong>for</strong> people building a business case. M<strong>an</strong>y think that their first step should be to<br />
calculate the frequently requested business metrics – return on investment (ROI), total cost of ownership (TCO), payback period (PP)<br />
<strong>an</strong>d net present value (NPV) – that are sure to sway m<strong>an</strong>agement (see “Key Fin<strong>an</strong>cial Metrics” sidebar).<br />
While it’s true that metrics are import<strong>an</strong>t, they will have little credibility if you haven’t derived your calculations in collaboration with key<br />
stakeholders. Fin<strong>an</strong>cial metrics are most effective after you’ve gone through a careful process of building org<strong>an</strong>izational alignment <strong>for</strong><br />
a project.<br />
If your org<strong>an</strong>ization has not already decided to implement EQMS (see “Where Are You Today?” sidebar), or if you haven’t spent the<br />
time to build org<strong>an</strong>izational alignment, you may find that your proposal, while well received, ends up on the back burner of comp<strong>an</strong>y<br />
priorities. Or you may find that the project gets approved but without the proper stakeholder <strong>an</strong>d fin<strong>an</strong>cial backing to make it a true<br />
success.<br />
The takeaway here is that you need to build a strong level of support <strong>for</strong> your proposal. At the same time, underst<strong>an</strong>ding your<br />
comp<strong>an</strong>y’s approval process <strong>an</strong>d getting the right people involved in your project will be critically import<strong>an</strong>t <strong>for</strong> getting your project<br />
green-lighted. The ultimate success of your project — when you move from approval to implementation <strong>an</strong>d launch — will also<br />
depend on the work you did up front to ensure org<strong>an</strong>izational alignment.<br />
www.spartasystems.com<br />
CRM<br />
Customer master data<br />
Automated complaint<br />
initiation<br />
LIMS<br />
Automated initiation<br />
of lab investigations<br />
ERP<br />
Product/material/<br />
vendor in<strong>for</strong>mation<br />
Batch release<br />
Return/repair processing<br />
EDMS<br />
Integrated ch<strong>an</strong>ge<br />
m<strong>an</strong>agement workflow<br />
Access to controlled<br />
documentation<br />
<strong>Enterprise</strong> Bus<br />
<strong>Quality</strong> M<strong>an</strong>agement<br />
<strong>System</strong><br />
MES<br />
Automated initiation of<br />
deviations/<br />
noncon<strong>for</strong>m<strong>an</strong>ces<br />
PLM<br />
Engineering Ch<strong>an</strong>ge Order<br />
Document Access<br />
3
Nine Steps toward Building a <strong>Business</strong> <strong>Case</strong> <strong>for</strong> EQMS<br />
Step 1: Underst<strong>an</strong>d the Approval Process<br />
Underst<strong>an</strong>ding the process your comp<strong>an</strong>y uses to evaluate potential capital investments is the critical first step in your project. Meet<br />
with your immediate supervisor, someone in the fin<strong>an</strong>ce department or a person who has shepherded a similar project through<br />
the approval process to find out how your comp<strong>an</strong>y h<strong>an</strong>dles it. Discuss the specific steps that will need to be taken (which may<br />
differ somewhat from this list) <strong>an</strong>d identify key stakeholders whose support will be needed. Make sure you walk away with a clear<br />
underst<strong>an</strong>ding of how the process works, who is involved <strong>an</strong>d what their roles are.<br />
During your due diligence, you may find that there is no budget available <strong>for</strong> new IT projects this year. If that’s the situation, don’t be<br />
discouraged. You c<strong>an</strong> still put together your business case, <strong>an</strong>d you’ll have the in<strong>for</strong>mation to underst<strong>an</strong>d which year’s budget you’ll be<br />
aiming <strong>for</strong> <strong>an</strong>d what your project’s time frame will be.<br />
Step 2: Identify Your Champion<br />
Every org<strong>an</strong>ization has a hierarchy of decision makers with different degrees of influence in the approval process. To make the case <strong>for</strong><br />
EQMS, it’s import<strong>an</strong>t to find a partner with both the org<strong>an</strong>izational leverage <strong>an</strong>d the willingness to move the proposal up the hierarchy.<br />
In some cases, the right person may be somebody high up in the quality department. In other cases, he or she may be a senior<br />
m<strong>an</strong>ager in IT or someone in fin<strong>an</strong>ce. It all depends on who at your comp<strong>an</strong>y is involved in fin<strong>an</strong>cial decision-making about major new<br />
projects.<br />
Identify a champion who has the power to help you progress the project through the approval process. That person may not<br />
necessarily be at the top of the political pyramid, but he or she should be at a level high enough to have gained the trust of those at the<br />
top.<br />
Step 3: Uncover Your Champion’s Priorities<br />
Once you know who your EQMS champion will be, invest some time to identify specific priorities. For example, if your champion is in IT,<br />
you may find that his or her top concerns are all about reducing support costs by consolidating infrastructure <strong>an</strong>d reducing the number<br />
of systems the IT department needs to m<strong>an</strong>age. If your champion is in quality, you may find that training, documentation, auditing or a<br />
new regulation is a principal challenge. Do a little digging <strong>an</strong>d find out if there has been a recent issue that dominates decision-making<br />
in your champion’s department or if there is a relev<strong>an</strong>t industry challenge that has been highlighted in their area.<br />
“When embarking on a quality m<strong>an</strong>agement initiative, leading comp<strong>an</strong>ies do a good job charting out<br />
the problem statement. Obviously these initiatives c<strong>an</strong> vary in scope, <strong>an</strong>d best practice is <strong>for</strong> comp<strong>an</strong>ies<br />
to take a hard look at that scope first… Comp<strong>an</strong>ies that get very detailed, very clear <strong>an</strong>d very gr<strong>an</strong>ular<br />
as to that scope will have a clearer set of functional requirements that help in the selection of their<br />
quality m<strong>an</strong>agement solution. It also pays dividends in terms of org<strong>an</strong>izational alignment… It allows<br />
these comp<strong>an</strong>ies to bring all their stakeholders along through the process to have clarity on the purpose,<br />
the business benefits <strong>an</strong>d goals of the quality m<strong>an</strong>agement initiative. And that is a key determin<strong>an</strong>t <strong>for</strong><br />
ultimate success.”<br />
Roy C. Wildem<strong>an</strong>, Senior Analyst<br />
Forrester Research<br />
www.spartasystems.com<br />
4
Initially, the concerns your champion raises may not appear to have much to do with your proposal. You need to gather the in<strong>for</strong>mation<br />
<strong>an</strong>d then go back <strong>an</strong>d see if EQMS c<strong>an</strong> be used to address your champion’s needs. You may end up building a case around the use<br />
of EQMS <strong>for</strong> a particular, immediate business need, followed by exp<strong>an</strong>ding use of the system to address your champion’s broader<br />
priorities.<br />
If your EQMS proposal doesn’t seem to align with your champion’s stated priorities, yet you think his or her department would benefit<br />
directly from the investment – either immediately or in the longer run – you’ll have to do some educating about the benefits of EQMS.<br />
This is good practice <strong>for</strong> the other stakeholders you’ll need to win over along the way. The goal is to have a champion who is truly<br />
willing to go to bat <strong>for</strong> this investment - to be the most effective possible advocate <strong>for</strong> the system.<br />
Step 4: Get Resources Allocated <strong>for</strong> Further Investigation<br />
Most enterprise software projects require its champion to build a business case to justify the capital spend. Your next step will be to<br />
convince your champion <strong>an</strong>d/or your direct supervisor to approve the allocation of resources <strong>for</strong> further fact finding. In building a<br />
business case, the champion needs to capture all t<strong>an</strong>gible benefits that the comp<strong>an</strong>y would obtain from implementing the software<br />
<strong>an</strong>d then place a defensible monetary value on these benefits in terms of <strong>an</strong>nual savings to the org<strong>an</strong>ization. The goal of the business<br />
case is to ensure that the project delivers value greater th<strong>an</strong> the corporate hurdle rate <strong>for</strong> capital investments. The following steps are<br />
required to develop the fin<strong>an</strong>cial business case to ensure the resources are allocated <strong>for</strong> this endeavor:<br />
Identify qu<strong>an</strong>tifiable business benefits<br />
Capture current state scenario <strong>an</strong>d collect baseline metrics<br />
Develop a future state scenario<br />
Model future state metrics<br />
Populate ROI data <strong>an</strong>d qu<strong>an</strong>tify the benefits<br />
Communicate value<br />
(See Step 6)<br />
Step 5: Win Support of Your Stakeholders<br />
It’s vital to get key internal stakeholders involved <strong>an</strong>d invested in the project <strong>an</strong>d to avoid conveying the impression that you are out to<br />
ch<strong>an</strong>ge the way their world works. Even if the ch<strong>an</strong>ge is <strong>an</strong> improvement, stakeholders might be resentful if it is <strong>for</strong>ced upon them.<br />
This is the time to have thoughtful conversations with stakeholders across the various business processes that will be impacted by<br />
EQMS. Ask them what they think needs to be improved <strong>an</strong>d what they would like to see ch<strong>an</strong>ged. Your willingness to listen, discuss,<br />
adjust <strong>an</strong>d make them part of the ch<strong>an</strong>ge process will help to build their support <strong>an</strong>d provide momentum <strong>for</strong> your ideas at the middle<br />
<strong>an</strong>d lower levels of your comp<strong>an</strong>y. It will also help you gauge the extent of your org<strong>an</strong>ization’s openness to ch<strong>an</strong>ge.<br />
Step 6: Gather Supporting Data<br />
At this point you will need to get the in<strong>for</strong>mation needed <strong>for</strong> a cost benefit <strong>an</strong>alysis outlining gains, risks <strong>an</strong>d resources required to<br />
implement a solution, with a focus on the key concerns of your stakeholders. To get the right in<strong>for</strong>mation you must engage with<br />
the people who are on the front lines of each process <strong>an</strong>d who have the direct experience to help you underst<strong>an</strong>d the scope <strong>an</strong>d<br />
components of each process. Make sure these people underst<strong>an</strong>d your goals <strong>an</strong>d engage with them to develop detailed process maps<br />
of both the current <strong>an</strong>d the future states you envision <strong>for</strong> each process. Be sure to include every process step no matter how trivial.<br />
www.spartasystems.com<br />
5
Step 6.1: Identify Qu<strong>an</strong>tifiable <strong>Business</strong> Benefits<br />
The first task is to identify the top three to five qu<strong>an</strong>tifiable business levers that will be impacted by the EQMS. The key criteria are to be<br />
exhaustive but not overlap (to prevent double counting of benefits) <strong>an</strong>d the impact of the EQMS should be qu<strong>an</strong>tifiable. A set of sublevers<br />
helps identify detailed qu<strong>an</strong>tifiable cost reductions or revenue increases from the selected levers. An example is shown below.<br />
“We mapped out at <strong>an</strong> extremely gr<strong>an</strong>ular-level the deviation, the CAPA <strong>an</strong>d the GMP investigation<br />
process. And then we identified what the value-added <strong>an</strong>d the non-value-added activities were in that<br />
process. When we mapped out the process we actually included things like take the file <strong>an</strong>d put it in the<br />
drawer. These were 14-page process maps. And we took work distribution surveys, <strong>an</strong>d we distributed<br />
them to our QA groups <strong>an</strong>d our customer groups. And we actually had them do them between one <strong>an</strong>d two<br />
weeks, based on the workflow process, to figure out how much time they were spending on each step. We<br />
then extrapolated that to the number of tr<strong>an</strong>sactions per year <strong>an</strong>d rolled it up into a pretty robust business<br />
justification.”<br />
Rol<strong>an</strong>d Smith<br />
M<strong>an</strong>ager, <strong>Quality</strong> Technical <strong>System</strong>s<br />
Shire HGT<br />
www.spartasystems.com<br />
6
Step 6.2: Capture Current State Scenario <strong>an</strong>d Baseline Metrics<br />
Now’s the time to work with your stakeholders <strong>an</strong>d their teams to <strong>an</strong>alyze their current processes <strong>an</strong>d cost elements, identify<br />
baseline metrics <strong>an</strong>d capture the value of these metrics related to the primary business levers. For example, if a sub-lever is<br />
“reduce recall costs,” then document the current process headcount requirements <strong>an</strong>d determine the following:<br />
What was the dollar amount of recall costs last year?<br />
What is this percentage compared to the total output?<br />
What was this recall amount internally attributed?<br />
Hours spent on the following:<br />
- Inspection<br />
- Sorting<br />
- MRB<br />
- Disposition<br />
Calculate hours spent on each activity <strong>an</strong>d the st<strong>an</strong>dard cost of each unit of activity. An example of how these variables c<strong>an</strong> be considered<br />
<strong>an</strong>d qu<strong>an</strong>tified is provided below. *<br />
www.spartasystems.com<br />
- Recall administrative costs<br />
- QA department h<strong>an</strong>dling<br />
- H<strong>an</strong>dling cost to replace or refund<br />
- Shipping costs<br />
EQMS<br />
- Communications with suppliers <strong>an</strong>d customers<br />
- New design costs<br />
- Replacement costs<br />
* Figures in the chart above are example estimates.<br />
** Most comp<strong>an</strong>ies use a concept called “fully loaded FTE” cost, based on job title. Work with your fin<strong>an</strong>ce partner to get the hourly values <strong>for</strong> your org<strong>an</strong>ization.<br />
?<br />
7
Step 6.3: Develop Future State Scenario<br />
This step enables you to visualize the future process flows with the new EQMS solution. It lays the foundation <strong>for</strong> how the new system<br />
will streamline the various processes that drive the primary levers <strong>an</strong>d sub-levers identified in step 6.1 <strong>an</strong>d how the new system will<br />
address the various issues that caused the current state problems. This is the most critical part of the business case development<br />
process. The user determines how the future state scenario will improve the key baseline metrics identified in step 6.1 <strong>for</strong> each of the<br />
sub-levers <strong>an</strong>d creates assumptions <strong>for</strong> the new value of the metrics. Since this is the most subjective part of the overall process, it is<br />
recommended that the user create two scenarios <strong>for</strong> identifying improvements to the metrics:<br />
Conservative: User assumes that ch<strong>an</strong>ge m<strong>an</strong>agement related inertia will slow the improvements to each of the processes.<br />
Most Likely: User assumes that with strong sponsorship of the m<strong>an</strong>agement team, the user will be able to achieve the most likely<br />
process improvements, factoring in some ch<strong>an</strong>ge m<strong>an</strong>agement-related pushback.<br />
An example of how the future state scenario provides value <strong>an</strong>d benefits is shown below.<br />
Step 6.4: Generate ROI Data <strong>an</strong>d Qu<strong>an</strong>tify the Benefits<br />
Once you have identified <strong>an</strong>d tabulated the business levers, future state scenarios <strong>an</strong>d qu<strong>an</strong>tified the outcome, now it is time to tabulate<br />
the qu<strong>an</strong>tified benefits to show the value of the EQMS. This is customarily calculated based on the five year life of the investment,<br />
taking cost of capital, all other expense bases <strong>an</strong>d considerations into the calculations to provide <strong>an</strong> <strong>an</strong>nual cash flow status, leading to<br />
<strong>an</strong> investment decision (net present value). This is typically the step required to get the approval from the fin<strong>an</strong>ce department <strong>for</strong> the<br />
investment approval. The following example illustrates the cost elements considered <strong>an</strong>d how the NPV is calculated.*<br />
* Please note that the numbers used are examples only.<br />
www.spartasystems.com<br />
8
EQMS<br />
*Numbers used are examples only<br />
www.spartasystems.com<br />
9
Step 6.5: Communicate Value<br />
At this step, it is imperative that you bring all the internal<br />
requirements, current <strong>an</strong>d future states, value generators (both<br />
t<strong>an</strong>gible <strong>an</strong>d int<strong>an</strong>gible) <strong>an</strong>d create a qu<strong>an</strong>tifiable benefits<br />
paper. This should consider internal stakeholders along with<br />
m<strong>an</strong>agement so all parties underst<strong>an</strong>d the value <strong>an</strong>d benefits.<br />
This is import<strong>an</strong>t <strong>for</strong> fin<strong>an</strong>cial <strong>an</strong>d operational success of the<br />
EQMS implementation project. The previous charts provide some<br />
examples on the kind of value communication that resonates well<br />
with m<strong>an</strong>agement. These include <strong>an</strong>nual net cash flow, NPV, ROI,<br />
payback period, etc.<br />
Step 7: Re-engage with Vendors<br />
If you haven’t already done so, this is the time to engage<br />
software solution vendors so you c<strong>an</strong> underst<strong>an</strong>d the order<br />
of magnitude of your implementation costs. If you’ve already<br />
spoken to vendors, this is the time to re-engage with them. If<br />
you’re proposing a centralized QMS <strong>for</strong> the first time, the exact<br />
scope <strong>an</strong>d details of the project c<strong>an</strong> come later, but you w<strong>an</strong>t<br />
a solid ballpark figure that takes into account both installation<br />
<strong>an</strong>d ongoing mainten<strong>an</strong>ce costs. If there is already support<br />
<strong>for</strong> enterprise quality m<strong>an</strong>agement in the org<strong>an</strong>ization, now is<br />
the time to get more detailed numbers. Remember that you<br />
may w<strong>an</strong>t to consider not only the costs involved with your<br />
initial adoption of enterprise quality m<strong>an</strong>agement, but also <strong>an</strong>y<br />
exp<strong>an</strong>sion pl<strong>an</strong>s if they will be implemented in the near-term<br />
future.<br />
Step 8: Create Your <strong>Business</strong> <strong>Case</strong> Presentation<br />
Next you’ll w<strong>an</strong>t to use the in<strong>for</strong>mation you’ve gathered from<br />
stakeholders <strong>an</strong>d their teams as well as outside vendors to build<br />
your business case presentation. It should include the following<br />
qu<strong>an</strong>tifiable elements:<br />
Current state<br />
Current state metrics<br />
Future state<br />
Future state metrics<br />
Benefits/value of future state<br />
Cost of <strong>an</strong> EQMS<br />
Justification - ROI/TCO<br />
www.spartasystems.com<br />
Step 9: Work with Your Champion to Take the<br />
Proposal through the Approval Process<br />
By this time your champion <strong>an</strong>d key stakeholders should be in<br />
support of your proposal. Present your findings <strong>an</strong>d metrics to<br />
your champion <strong>an</strong>d arm him or her with the in<strong>for</strong>mation needed<br />
to present the investment. Then allow your champion, with your<br />
help, to use his or her political leverage to take the EQMS proposal<br />
through the approval process.<br />
Presenting a compelling business case c<strong>an</strong> sometimes feel<br />
daunting, particularly if you have had no experience doing<br />
one in the past. If you follow these steps <strong>an</strong>d keep in mind the<br />
import<strong>an</strong>ce of people, process <strong>an</strong>d numbers in accomplishing<br />
your goals, you’ll find that your proposal will be much more<br />
effective. And regardless of the timing of your approval, you will<br />
have acquired <strong>an</strong> underst<strong>an</strong>ding of your comp<strong>an</strong>y’s structure <strong>an</strong>d<br />
processes <strong>an</strong>d you will have gained allies across the comp<strong>an</strong>y<br />
both of which will enable you to build a stronger case in <strong>an</strong>y<br />
future projects or initiatives.<br />
Recap: Nine Steps<br />
Step 1: Underst<strong>an</strong>d Approval Process<br />
Step 2: Identify Your Champion<br />
Step 3: Uncover Your Champion’s Priorities<br />
Step 4: Get Resources Allocated <strong>for</strong> Further Investigation<br />
Step 5: Win the Hearts <strong>an</strong>d Minds of Your Stakeholders<br />
Step 6: Gather Supporting Data<br />
Step 7: Re-engage with Vendors<br />
Step 8: Create Your <strong>Business</strong> <strong>Case</strong> Presentation<br />
Step 9: Work with Champion to take Proposal through Approval<br />
Process<br />
Key Fin<strong>an</strong>cial Metrics<br />
Payback Period (PP) takes into account how m<strong>an</strong>y months<br />
it takes <strong>for</strong> the savings from a new technology to equal, <strong>an</strong>d<br />
thus pay back, the initial investment <strong>an</strong>d ongoing costs of its<br />
implementation.<br />
Return on Investment (ROI) provides a figure <strong>for</strong> the ratio of<br />
savings to the cost of the investment.<br />
Total Cost of Ownership (TCO) refers to the total cost of a process<br />
or software implementation over its lifetime, taking into account<br />
both upfront costs <strong>an</strong>d ongoing recurring operating costs.<br />
Net Present Value (NPV) refers to the present value of the project,<br />
including initial hardware, software <strong>an</strong>d implementation costs,<br />
as well as ongoing recurring operating costs net of qu<strong>an</strong>tified<br />
benefits, adjusted <strong>for</strong> the cost of capital. If the NPV is positive, it<br />
indicates the project will yield a good investment above the cost<br />
of the capital.<br />
10
Where Are You Today?<br />
There are two typical scenarios in which you might have to present your business case.<br />
Scenario One: You’re presenting EQMS as <strong>an</strong> entirely new project that you w<strong>an</strong>t included in the next budget cycle. In this scenario, the<br />
first five steps, which are all about building org<strong>an</strong>izational alignment, will be the most critical. You’ll be taking a more macro view of<br />
the project <strong>for</strong> the purposes of business pl<strong>an</strong>ning <strong>an</strong>d will most likely end up with a ballpark budget figure of X million dollars, plus or<br />
minus X percent.<br />
Scenario Two: Your org<strong>an</strong>ization has already included EQMS in the budget or there has been <strong>an</strong> event such as <strong>an</strong> audit or regulatory<br />
issue that has compelled your comp<strong>an</strong>y to prioritize <strong>an</strong> EQMS investment. In this scenario, org<strong>an</strong>izational alignment is already fairly<br />
established so it’s a matter of cultivating that support rather th<strong>an</strong> building it from scratch. Steps six to nine will be your focus as you<br />
build out a detailed <strong>an</strong>swer to the question, “How much will this cost?”<br />
Conclusion<br />
<strong>Quality</strong> m<strong>an</strong>agement solutions are often viewed as <strong>an</strong> additional cost that must be incurred in order to help ensure compli<strong>an</strong>ce.<br />
However, if the implementation process of <strong>an</strong> automated quality system is approached methodically <strong>an</strong>d properly, org<strong>an</strong>izations<br />
benefit not only from greater compli<strong>an</strong>ce, but also realize a signific<strong>an</strong>t ROI.<br />
To learn more about this topic <strong>an</strong>d how Sparta <strong>System</strong>s c<strong>an</strong> help, visit www.spartasystems.com<br />
Sparta <strong>System</strong>s, <strong>an</strong> industry pioneer <strong>an</strong>d leading provider of enterprise quality m<strong>an</strong>agement software<br />
(EQMS) solutions, enables businesses to safely <strong>an</strong>d efficiently deliver their products to market. Its<br />
TrackWise® EQMS, a trusted st<strong>an</strong>dard among highly regulated industries, is used by quality, m<strong>an</strong>ufacturing<br />
<strong>an</strong>d regulatory affairs professionals to m<strong>an</strong>age compli<strong>an</strong>ce, reduce risk <strong>an</strong>d improve safety across the<br />
global enterprise. Headquartered in New Jersey <strong>an</strong>d with locations across Europe <strong>an</strong>d Asia, Sparta <strong>System</strong>s<br />
maintains <strong>an</strong> extensive install base in the pharmaceutical <strong>an</strong>d biotechnology, medical device, electronics<br />
m<strong>an</strong>ufacturing <strong>an</strong>d consumer products markets.<br />
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