Disclaimer: I have been writing the blogs in the style of story telling based on real incidents but with some fiction added to emphasize the message. Hence I request not to make any conclusions to derive facts based on the posts in these blogs.
I made many business development
sessions and one of the challenges was to convince the Customer on why their
organization must go for a ERP, a BI Solution or even an upgrade to better
version. In a typical Presales mode, I used to present what are all the great
features the software has and believed the customer would be convinced for
sure.
I was doing a similar
presentation to a matured Customer who is in top 10 of the Fortune 100
Conglomerates. The customer Organization was known to be the process oriented
and organization full of knowledgeable stakeholders. My first challenge was
there when the customer stopped my presentation and asked me a simple question.
Why should I upgrade my current
ERP to the latest version? I just want the answer to this and I can convince my
leadership for the rest.
I politely responded that this
was exactly what I was trying to do through explaining the great features that
are added to the new version
He said “we can hear this from
any consulting organization. And in fact, I can go through the literature of
this Product vendor in their web site to understand what are all new in the
Software.”
I was confused. “Dear X, You will
be having more user friendly screens, parameter based navigations, new
functionalities to support some of your activities for which you might be doing
customizations. They are all going to make your life much better”
“At what cost?” Now he came to
the point.
“It costs …. USD but I am sure
that helps you a lot”
‘This is English, can I have
another session where you will explain me on what will be my investment and
what will be my cost or Productivity benefits if I make this migration?”
“Sure Mr. X. I will come back
next week”
“Thanks!
But please remember. I don’t want any English text detailing the benefits in
terms of excellent features, great performance, superb reports etc. I want to
know the numbers against each of what you say as the benefit. And preferably in
terms of dollars”Completely puzzled about what to present in the next week, I
met Bholerao and explained the scenario.
“Dear Khaderao, let me give an
example. I agree any model of BMW car has great features but it also costs a
lot. If my job is to buy vegetables every day and carry them home, will I buy
BMW?”
Your customer is asking the same
question. You need to understand what is the line of business for the customer,
what are the major business transactions that they do. What is the volume of
transactions. What are their major 3 pain areas that they don’t fulfill
currently?
These are a few questions to
which you must have the answer.
I asked ‘how do I get there? Can
you please clarify?’
“Hmm. Ok, let me try. There are
two approaches for you”
Approach 1:
1. Understand
the current business
2. Identify
the features that are already in use and the new features will help the
customer at a Macro level
3. Approximate
the benefits to the customer when the features are adopted. This is to be done
based on customer’s business metrics (CTQ) and the expected cost savings,
increase of revenue, reduction of effort, space or speed up of business such as
quick delivery
4. Compute
the fixed benefits as well as recurring benefits based on the analysis
5. Compare
the with fixed and recurring investments made by the customer
6. The
cost is not just licenses or the service costs of implementation / upgrade.
They include:
a.
Purchase of Infra such as Hardware, upgrades of OS, Database, additional
disk space etc
b.
Any Network costs or upgrade costs
c.
Recurring costs such as hiring new staff for maintenance. Examples are
like Administrators, DBAs, Domain specialists
d.
The cost of business leaders involving in the Implementation / upgrade
and the opportunity loss due to their reduced involvement in the Business
e.
Others
7. Submit
the substantial benefits in numbers to justify the upgrade / implementation
Approach 2;
1. If
you cant justify what is the business benefit by having new or upgraded
version, analyze on the basis what we don’t get when you continue the same way
2. For
each additional feature look at what you cant do with the existing
implementation
3. Compute
the loss in terms of time, cost savings, revenue increase, Productivity gains
etc
4. Present
your analysis
I got some idea on what I need to
do.
I also realized I cant just copy
paste my proposal defense based on what my product ./ services are offered. I
need to map to specific business requirements and make more value adding
proposal.
Thanks a lot Bholerao.
