With 20 years of this business under my belt, I can say with confidence that I get it. Many I work with get it but many companies as a whole don’t. As a Solution Architect for a large hardware/software/services organization, I’m amazed with the inconsistency of approach and lack of understanding – not a unique situation. Arrogance? Inexperience? Culture? All the above? It reminds me of a discussion I had with a senior manager late last year. Scary is the best word to describe it, he clearly had no clue.
A while back I blogged about an approach to sales that helps focus the pursuit of a deal or account. Specifically, not understanding the customer, lack of industry focus and knowledge and resistance to investing in the client. As sign of the times or the reality of quarterly (What have you done for me this week…) performance measurement? Immature services organization?
If you look to the likes of Gartner and IDC, they will tell you the following criteria are the most important to clients when selecting an external services partner:
- Price competitiveness
- Technical expertise
- Proven track record
- Ability to transfer knowledge
- Ability to work with our people
Ask yourself, why would you outsource? Cost model? Lack of internal expertise? No time to ramp up? Cultural? What’s interesting is I don’t see mention of relationship which is a key factor in any deal – most the time. As one of my past colleagues said, “You don’t lose on price”.
Some further interesting facts from their research:
- Approximately 42% of the sample indicated that a good company reputation was
an important consideration.
- Almost 38% of the respondents indicated that the vendor’s ability to align IT
projects with business objectives was an important consideration when selecting
a firm for an implementation.
- A proven implementation methodology was deemed important by more than one third
of the sample.
- Having an existing relationship with the customer’s organization was an important
consideration for about 28% of the sample.
- Having deep expertise in the customer’s industry was only deemed important by
25% of a recent studies sampling.
Some of the more prominent differences (by industry) in importance include:
- More than 80% of the respondents from the infrastructure services sector feel
that price competitiveness is a top 5 consideration versus less than 50% of the
respondents from the financial services sector.
- Respondents from the financial services sector place greater importance on track
record and company reputation than other sectors.
- The ability to work with the organization is of greater importance to the public
sector and distribution & services sectors than the other sectors.
So what does this mean? While sipping my latte this morning at EWR, I summarized my thoughts as follows:
- Relationship – Relationship is key, people do business with people they know and trust. If your priced to high, they will tell you. If your team isn’t strong enough, they will tell you.
- Price competitiveness – Your cost structure and price (Margins) must be competitive in the region/area you play in. Prices for service in NYC vs. Des Moines wont be effective.
- Technical expertise – Deep focus accompanied by solid breadth – one trick ponies are not always the best approach.
- Proven track record – Can you prove past success? Do you have solid references? How did you turn around a failing project?
- Ability to transfer knowledge – Can your staff speak the local language well? Do they understand how to transfer knowledge? Does you PM know how to manage this?
- Ability to work with our people – Are your staff personable? Can they adjust to different cultures? Keep in mind that a technical persons education usually does not focus on building interpersonal skills. For some it comes naturally, for some it’s not.
What do you think? I’d interested in hearing from you.