Workleaf

I was talking to Jason yesterday. We were discussing different ways to move forward with the Alef Platform. During the conversation, Jason talked about the primary challanges in any sales process, irrespective of what you are trying to sell. I found it good enough to become blog fodder, so here it is -

1. No Need – The customer does not have or does not feel the need for the product/service. Here, the sales person should focus on making the prospective customer realize the need for the product or service
2. No Money – The customer’s current budget is already committed to other initiatives and hence, there is no money to spend on this product/service. Here, the sales person to devise ways to make the payment part easily fit into the customer’s budget and spending plans.

3. No Urgency – The customer realizes the need but the need is not urgent. The sale gets postponed indefinitely. Here, the sales person should focus on “quick wins” that the product/service will generate for the customer, hence making him/her realize the urgency of the need.

4. No Time – The customer does not have the time to evaluate the product/service to assess if he/she needs it or not. In other words, the prospect does have time to listen to the sales pitch. Here is where a sales person should focus on relationship building and get a time from the customer to make the sales pitch.

Have you faced some (or all) of these challenges during your sales process? Are there more? Do let me know.

I have been reading a few articles recently regarding issues in outsourcing and their possible solutions (I am writing one on my own!). I observed that a common thread ran through these documents – “ITO fails due to immature processes at both sides of the engagement”. Apart from these, bad vendor selection & a blind focus on cost factors were stated as other reasons. I was wondering if this could be true across the board – large enterprises, mid-market companies and small firms.

What has been your experience or observation? If an IT Outsourcing deal fails, what was the primary reason? And is there something that others can learn to avoid the same reason from occuring again?

In the Sourcingmag.com blogs, I came across a question that was debating upon when to use freelancers to get some software code written versus when to use an outsourcing firm for the same job. It was interesting to read others comment on the question (so did I), so I decided to post my suggestions here.

But as I was writing this post… literally… I noticed that Steve Mezak of Accelerance had posted a response to the discussion forum. And coincidence… he had a post on his blog on the same question, which was pretty much what I wanted to say, but articulated in a way that reflected Steve’s experience.

Find it here

So here we are – at the thershold of a new buzzword – Middlesourcing!!

This is almost like a predictable cycle – each buzzword lasts only for 4 years at the most!

Anyway… middlesourcing, apparently is what we were/are planning to do at Alef Solutions. Except for the fact that we were not aware of the existance of such a term, we were pretty much close to how it is being defined. Dian, at Sourcingmag.com wrote a post on the magazine’s blog that caught my attention. Here it is.

How many layers of management will we keep adding to the already complex nature of outsourcing. On one side, we are pushing towards the lean mean organization, and on the other sides, we are adding too many layers of abstraction.

Middlesourcing is basically outsourcing the management of outsourcing! Sheesh… will we ever stop?

Thanks to my brother Arjun, a new logo for Alef Solutions was born yesterday. How does it look?

Or for that matter, ANY toolbar? If yes (and you probably do like many of the netizens out there), you should know THIS
A great post on toolbars, revenue streams and a sneak peek into where the internet war will head in the future.

Are there big opportunities here?

According to this report on the “Outsourcing World“, the chinese outsourcing industry registered a whopping 44% growth during Q1 2006!! China’s existing trade relationships with Japan seem to be the biggest contributor to this growth.

What’s more? In this nascent market – there is no single dominant service provider. Its a buyer driven market I guess. Imagine if you were a buyer and if you could get a multi-year IT outsourcing contract signed with one of the more promising suppliers at a bargain. The market is still fragmented, so there is room to bargain. The buyer is more powerful than the seller here. Of course, easier said than done…. but still… imagine! How would it be if you could pull this off successfully for the next 2 years, while you comeptitors just start looking into this market?!

How would you feel if you thought you were the first mover and you found that someone had launched a very similar idea almost a year ago??

In China… the regional software association… http://www.blogsource.org/2006/07/zsoft_launches_.html

I am crying…. sob… sob.. !

In hindsight, they are still regional. Which still gives us a wide open space to play with. I shouldn’t be crying after all, I guess. What do you think? Do you think that our attempt is similar to theirs?

Recent reports from TPI and DiamondCluster pointed out to the declining TCV (Total Contract Value) of the outsourcing deals seen this year. The contention is that outsourcing has platued and onshore outsourcing service providers need to re-invent their model to survive the changing trend in the industry. The biggest contributor has been F&A functions and we will see offshore providers gainingmarket share at the expense of their onshore peers.
But the sheer large-enterprise focus of these research reports makes me think about the validity of extrapolating these trends to the whole industry as such. I believe that large enterprises lead the way in outsourcing and the SMB segment follows. If this is true, then what was true for outsourcing in general 2 years back, should hold true for the SMB segment in the near future. How is that for a simple trend forecast?

Does that mean that we will see a flood of outsourcing deals from mid-market firms next year? Should outsourcing service providers reach beyond the low-hanging fruits and pitch outsourcing as a strategic initiative rather just a cost-cutting move?

I have been reading a whole bunch of technology marketing related stuff recently. A common thread has been the challenges in marketing technology solutions to the SMB market. Its a common contention that this segment is highly fragmented, and hence, unattractive for organizations with a sales model tuned to service large scale enterprises. Assuming that each sales personnel is expected to generate uto 7 times of his/her cost to the company, as topline for the firm, it is obvious to see why this sales force cannot be employed to service the SMB segment.

According to some of the reports, 50% of IT spending in US (in 2005) happened in this segment. But it has its caveats – Reluctant buyers, predominantly non-IT decision makers and wanting more for less. Moreover, affinity for non-customized solutions and an attitude that stresses more on post-sales service establishes a scenario where the cost side of the equation remains the same, but the revenue side decreases significantly.

In such scenarios, shouldn’t start-ups take advantage of this situation by building a low-cost sales model upfront? Doesn’t it make sense to build a sales & distribution model that works on a customer “pull” basis, rather than pushing the offerings?

The primary challenges that I see here are -

1. Predictability – If I were to build a sales model that attempts to pull the customer to the product/service, rather than pushing the product/service to the customer, how can I predict or forecast the number of customers that will get pulled and eventually buy the product? Hence, traditional frameworks of sales and revenue forecasts become invalid.

2. Accountability – If I put a sales person in-charge of bringing in 5 new customers each month and if that does not happen, then I can hold the sales person accountable. In the pull model, who is accountable if the customer does not get pulled in sufficient number (heck… if he doesn’t get pulled at all!!)?

It would be interesting to hear your comments on this one. To pull SMB customers towards your technology offerings, what is be most predictable and effective way? Or is the whole hypothesis lop-sided? Are there other ways to get to the SMB market?