A business solution should be
about driving value in the customer's organization. Period! ERP solutions specifically, and CRM
solutions to an extent, are mission critical because of the number of
core functions they support, such as Quote-to-Order Entry, Order
Fulfillment, Receipts and Payments, HR and Payroll, Inventory
Management, Demand forecasting and sales pipeline management, among
others. When you see the applicability of the system to multiple
workflows within the organization, it should then not be a stretch to
understand and determine the impact of the system on that organization. A
good sales team will try their best to articulate this value during the
sales cycle, regardless of whether or not the customer is looking for
those kinds of metrics.
A question can be asked as to
why this is important. It is easier to drive executive support for a
project when there is a value associated with the solution. Executive
support is absolutely critical for a project of such magnitude.
Additionally, during the implementation of the solution, the solution
delivery team is bound to go through peaks and valleys. When there are
clearly defined value projections, these will be excellent motivation
factors for the team to keep forging ahead through its struggles.
The most important aspect of
driving value for the customer is ensuring that the right solution is
being positioned to meet the organizational requirements. A good sales
team always keeps its customer's needs at the forefront. Always strive
to do what's best for the customer and their organization, even if it
means walking away from an opportunity if you determine that it is not
the right fit to your solution. This is where ethics come in, but when
sales teams follow this thought process, they will have appreciative
customers. And over the long run, they will end up on the winning side
and be able to feel good about their accomplishments.
A business solution sale
should not be about filling the sales period quota, but should be about
helping the customer organization. There is of course no denying the
influence of quotas and bonuses on sales behavior. However, by aligning
the right solution for the customer, the sales personnel can get their
individual goals accomplished while also helping organizations achieve
their potential. This should give them a sense of gratification that
extends well beyond the period-end bonuses. Long-term value can be
achieved through a due-diligence process that engages and informs the
customer through the sales process. Solution providers that establish
such a culture and inculcate these values in their organizations are in
turn successful in the long run.
Value realization and measurement
During the customer's due
diligence process, the service provider strives to gain an understanding
of where the customer organization is currently at and their vision for
the future. The proposed solution will bridge the customer's gap from
their as-is state to their to-be state—an effective value realization
process begins early in this cycle and is executed in sync with the
solution visioning and delivery process.
As the service provider
develops the blueprint for the proposed solution, they should begin to
define the value that the solution will provide. While this will
include, in part, the determination of the conditions of satisfaction
for the customer, the critical component to determining value will be to
understand the business drivers for the organization's change to the
proposed solution.
Microsoft, in its training curriculum, defines a business driver as:
a brief statement
that defines clearly and specifically the desired business outcomes of
the organization along with the necessary activities to reach them.
Business drivers help
communicate the vision and strategy of an organization. Business drivers
clearly articulate the goals and objectives for moving the organization
from its current (as-is) state to its desired future (to-be) state.
Business drivers can also help
in the alignment of the business priorities to the organization
strategy. In turn, they can explicitly align each initiative to the
organization's strategic objectives, while also helping with the
measurement of the desired outcomes.
Simply put, a business
driver is something that should result in quantifiable savings for the
organization. As such, the business drivers should have SMART
attributes:
Microsoft provides a
straightforward technique to define or write a business driver. Start
with a "verb", and add to that the "element to measure" and the "focus
or area of emphasis".
Business Driver = Verb + Element to Measure + Focus or Area of Emphasis
Using this definition, the following are some of the examples of business drivers:
Increase the sales for product ABC
Reduce the average inventory in Plant XYZ
Improve the Days of Sales Outstanding (DSO) in the Area Office
Accelerate the time to market for new product introductions
Once the business drivers have
been defined, it is important to capture the metrics that will enable
the measurement of the value. This is where the above definition also
helps, as the "element to measure" translates into the metric or Key Performance Indicator (KPI) to measure.
Microsoft defines a KPI as:
an instrument to monitor, predict and manage performance needed to achieve a specific target.
The value measurement statement then includes the KPI and a "threshold value".
Value Measurement = Key Performance Indicator (KPI) + Threshold Value
The following are examples of value measurement statements that include the metrics or KPIs for the business drivers:
Sales of product ABC to increase by $5M
Average inventory in plant XYZ to be reduced by 15%
DSO in the Area Office to be improved by 5 days
Time to market for new product introductions accelerated by 30 days
With the business drivers and
KPIs defined, the next step is to measure and capture the baseline
metrics—the values of the KPIs in the current (as-is) state. Without
establishing the baseline metrics, you cannot quantify the effect of the
new solution on the drivers, so this step is very important.
Related to the
determination of the KPIs, it is also important to define the timing and
frequency of when the measurements will be taken. The actual execution
of measuring the results will typically happen only when the solution is
actually in operation for a given period, but the teams should decide
up front when the measurements will occur. They should also decide the
frequency of the measurements for the corresponding KPIs.
The solution delivery
process is then set up to ensure that value realization is accelerated
and maximized. After the solution has been deployed and has gone through
a period of stabilization, the actual outcome or metrics can be
measured.
The following diagram summarizes the value realization and measurement process in the context of business solutions:
In
the following sections, we will discuss how this concept of value
realization is enabled by a solution-centric approach. We will also
discuss how solution selling helps the customer identify the right
solution, and sets the stage for the solution implementation so as to
realize the projected value from that solution.
