Microsoft Dynamics Sure Step 2010 : Driving value for the customer and the solution provider

10/2/2012 2:57:21 AM
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:

  • Specific

  • Measurable

  • Aggressive but attainable

  • Results-oriented

  • Time-bound

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.
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