Building a compelling business case for board management software
Amid geopolitical tensions, rising investor pressures and evolving regulatory requirements, modern boards are faced with the question — how do we navigate it all effectively? This is the essence behind the business case for board management software.
Measuring the total value of board management software is really an exercise in weighing the value of a powerful board. Beyond saving time and increasing efficiency, software propels nearly every activity the board must do to keep the organization on a positive and profitable trajectory.
Here, we’ll explain how to make a case for board management software, including:
- Identifying the need for board management software
- Benefits of implementing board management software
- How to calculate the return on investment
- Tips for presenting a business case for board management software
- Real-world stories of board management success
Identifying the need for board management software
An effective board is the product of myriad people, processes and data points. The more efficient each of those pillars is, the better they coalesce to provide the board with the right support and insights at the right time. While manual management may work for a while, many organizations outgrow it.
How do you know when it’s time to move away from manual processes to a software solution? Look for:
- Increasingly time-consuming preparation and distribution: Preparing meeting materials can be a massive time drain. Some administrators estimate spending as many as 50 hours per quarter simply prepping for board meetings. If you notice mounting inefficiencies, frustrations and resource wastage leading up to board meetings, it is time to start building a business case for board management software. AI can automate meeting preparation tasks. This allows board administrators to prepare for meetings and make progress on strategic tasks, enhancing their overall efficiency.
- Enhanced due diligence security: Transition to a software solution when manual processes in M&As, such as funding rounds and IPOs, lack robust security measures. Without strong security measures, you’re at risk of litigation due to inadequate due diligence. Using software with strong encryption, permissions for different groups, and detailed audit trails can greatly reduce human errors and unauthorised access to sensitive information. This will protect the integrity of the transaction process.
- Delays in accessing critical information: Boards need instantaneous access to critical information. Board management software can make the difference if your board regularly lacks the information it needs or doesn’t know where essential documents and financial reports are stored. Centralized, real-time access to essential insights helps directors make quicker, more informed decisions.
- Risks of noncompliance: Regulatory requirements are complex and ever-changing. The potential legal and financial consequences are damaging, but it’s easy to make errors when managing board materials manually. Board management software is vital if your compliance tracking becomes too complex.
- Lack of board engagement: Boards disengaging between meetings may miss opportunities to solidify the organization’s competitive edge. If you notice board members are difficult to reach or slow to collaborate, introducing software can boost engagement. Integrated communication tools and real-time updates foster stronger involvement from all board members.
Benefits of implementing board management software
Understanding the benefits of board management software is key to creating a compelling business case. Boards want to know what they stand to gain by investing in software.
While board efficiency, security and effectiveness are all common outcomes of using board management software, your organization can also expect the following.
Streamlined meeting preparation
More straightforward meeting preparation is one of the most immediate benefits of board management software. Administrators will no longer spend hours compiling documents, creating agendas or distributing materials.
Board management software automates these processes, allowing administrators to organize and send materials to all board members quickly. This saves time, reduces errors and fosters more productive meetings.
Enhanced data security and privacy
Boards handle an immense amount of confidential documents and data. These require nothing short of strict security measures that can be difficult to implement manually, especially if your board still communicates over email or text.
With board management software, documents, data and messages are encrypted, protecting confidential information from unauthorized users. Additional measures like role-based permissions and audit trails add a layer of security that offers even more peace of mind for board administrators and directors alike.
Real-time access to information
Boards often need to make decisions quickly. Even if members are at-the-ready, though, they may be hindered by a lack of accurate, up-to-date information.
Board management software centralizes information that may otherwise be scattered. Directors can tap into a single platform to view and annotate essential documents in real-time from any device. This immediate access to information leads to the swift decision-making the modern business landscape requires.
Improved legal and regulatory compliance
Compliance isn’t a task for the faint of heart. Maintaining compliance with various regulations is one of the board’s key responsibilities. Board management software makes it easier.
Board members can receive automatic updates on regulatory changes and ensure that all documents and data are handled appropriately, reducing the risk of non-compliance. Board management software also creates the accurate and thorough records boards need to withstand audits and legal reviews.
Better communication and collaboration
Board members often struggle to engage between meetings. This is due as much to their busy schedules as it is to their lack of ability to communicate and collaborate effectively.
Board management software engages the board through ongoing collaboration, notification and discussion tools. Instead of relying on fragmented, easily buried email chains, board members can engage in real-time on a single platform. This makes board activities more efficient and promotes a proactive board culture, leading to better outcomes for the entire organization.
Cost and time savings
While board management software requires an up-front investment, it often pays for itself in the long run. Automating tasks reduces the manual labor involved in board activities, which cuts down on administrative costs.
At the same time, improved decision-making and governance lead to fewer delays and more effective use of board members’ time, yielding additional productivity and resource optimization.
Leverage this whitepaper as you build your business case for board management software.
How to calculate the return on investment of a board portal
Board management software has countless benefits, but it also brings added costs. Calculating its true return on investment (ROI) requires assessing the cost of acquiring and implementing the software and determining the quantifiable benefit it offers your organization.
Costs associated with board management software
Account for both one-time expenses and ongoing operational costs, including:
- Software licensing fees: These are typically recurring costs based on the number of users or annual subscriptions. Free solutions exist but come with real drawbacks, while enterprise solutions often have premium tiers.
- Implementation and set-up costs: Consider the cost of onboarding, setting up the platform, migrating data and customizing the portal for your organization.
- Training costs: Training your team is crucial, but it also adds costs in terms of staff time and any training programs from the software provider.
- Ongoing support and maintenance: These include the cost of software updates, customer support and system maintenance.
Quantifying the benefits
Once you have outlined the costs, you can quantify how adopting software will save money. This may be through hard costs — like reducing the amount of paper you need — and less clear-cut savings like reduced administrative overhead.
- Staff time savings: Automating meet preparation, document distribution and compliance tracking significantly reduces the time staff spends on tasks. Multiply the hours saved by the hourly wage to calculate cost savings.
- Reduction in materials: Using software eliminates the need to print documents and reports, slashing the cost of materials. This can also include shipping costs for document distribution.
- Decreased overhead: Software can reduce or eliminate the need for additional administrative staff since managing board meetings and communications will be more straightforward.
- Increased productivity: You can also calculate the benefit of the increased productivity from instant access to documents and communication. This allows boards to make decisions faster, increasing their efficiency.
Calculating how much you can save
FirstRand conducts upwards of 600 meetings annually between its main board and all its subsidiaries. This robust schedule requires more than 8,700 individual board packs for directors.
By adding up the time spent on each pack and multiplying it by the labor cost, FirstRand determined it spent almost $US 1.5 million per year on board packs. After adopting Diligent Boards, part of the Diligent One Platform, the company reduced costs by 50%, even after accounting for software licensing fees, implementation and training.
Tools and methods to calculate ROI
- Cost-benefit analysis: Compare the costs saved (time, printing, compliance and more) against the cost of acquiring and implementing the software to visualize how much your organization stands to gain.
- Time tracking: Measuring how much time staff spends onboard activities now will enable you to determine how much less time it may take if you implement board management software.
- Audit savings: Review previous audits to determine how much time you spend collecting documents and what you paid in legal fees. Then, determine cost reductions to create a more complete picture of the business case for board management software.
6 tips for presenting a business case for board management software
Presenting a business case for board management software can feel daunting. Many organizations are attached to the way they have always done things. However, with clarity, data and attention to your board’s specific needs and priorities, you can drive decision-makers to act. Here’s how:
- Highlight the ROI: Use the steps and tools above to present a clear cost-benefit analysis. Include the savings in staff time, reduce administrating costs and lower printing expenses to prove board management software's immediate, quantifiable benefits. Concrete numbers and charts can also build buy-in for how the software will generate short-term and long-term savings.
- Emphasize current pain points: Highlight the inefficiencies within the current processes and the tangible ways that impact board performance. Uncovering a pain point allows you to introduce board management software as the solution. Showcase features like automating routing tasks, scheduling and compliance tracking, which can all free up time for the administrative team and board members.
- Focus on litigation risk mitigation: Emphasize how board management software can safeguard against litigation risks by ensuring secure and compliant document handling, which is crucial for maintaining corporate governance and legal standards.
- Tailor the presentation to your audience: Financial leaders and compliance officers will have very different priorities. Take time to align the business case for board management software with their specific interest. For example, board members will want to see how the software improves governance and decision-making, while CFOs primarily care about cost savings and ROI.
- Use case studies: Real-world examples lend credibility to your case and make the transition to board management software feel less risky. Case studies like those outlined below can illustrate the measurable benefits. Be sure to include specific data points related to the areas your audience cares about, such as time savings, cost reduction or compliance improvements.
- Highlight the long-term strategic value: Immediate savings matter, but board directors and senior management will want to see how software can drive organizational growth. Touch on how board management software advances governance best practices, which, in turn, streamline decision-making, collaboration and board engagement. Emphasize that board management software is an investment in a stronger future, helping your organization stay agile.
Board management software success stories
Here is a case study you can use to help make your business case for board management software:
CRICO
CRICO insures all Harvard medical institutions and their affiliates. However, it relied on disjointed digital and manual processes that were resource-intensive and presented security challenges. It also struggled to store data for each search and reference.
The compliance program manager led the initiative to strengthen the company’s security and compliance while also digitizing board management processes.
They improved governance, maintained strict compliance and eliminated thousands of printed pages and hundreds of hours of labor yearly.
Strengthen board management with Diligent Boards
Today’s directors need to stay current. The landscape evolves quickly, new risks can emerge in seconds, and investors want increasing transparency in board decision-making. Board management software can unlock all three.
The simplest business case for board management software is that boards are only as strong as their tools. Diligent Boards offers AI-powered risks and analytics that give boards a complete, real-time picture of risk — from any device, anywhere.
