Friday, July 25, 2014

CFOs are Large and in Charge of Tech Purchase Decisions?

CFOs are now more influential and more in charge over IT spending decisions, this according to a recent article from Baseline Magazine.

Studies by Gartner concur, revealing a 44% increase in CFO influence over IT purchase decisions. Over 41% of CFOs indicate that they are now the leader of the group responsible for IT investments and 26% of IT investments are directly authorized by CFOs (with only 5% by CIOs).

There are three key factors you should be aware of that are driving more CFO control:
  1. Disruptive - CFOs believe that disruptive technologies can drive growth, with CFOs involved in spending decisions for big data, cloud computing, mobile and social media as growth enablers.
  2. Risk – If you get technology wrong, it has a bigger impact on the business. Just ask Target about the impact of their security breach and its no wonder why CFOs are more involved.
  3. Frugalnomics - We are still operating in a “Do more with Less” economy, with the CFO assuring that precious investments like you are proposing are low risk / high reward and are perfectly aligned with realizing business objectives.

 For IT solution providers like you, the expanding influence of the CFO means that engagement is more difficult, involving more financially focused stakeholders with expanding influence and control.

With the CFO taking more control in setting technology strategy, it becomes essential for you to:
  1. Engage earlier with the CFO in order to help them recognize important challenges they should be addressing (Why Consider a Change), and the tangible impact of “do nothing” (Why do so Now)
  2. Speak the language of the CFO – business objectives, risks, business benefits and financial impact / ROI - developing provocative content to fuel CFO engagement sand sales conversations
  3. Deliver CFO-ready business cases to communicate the story of your value and quantify the investment versus benefits  / ROI.

 Are you ready to win in an environment where the CFO is more influential and in control of IT purchase decisions?
  • Is your content speaking to the CFO?
  • Are you arming your sales reps and channel with the provocative value messaging and quantification needed to gain early CFO access?
  • Do you proactively deliver CFO-ready business cases to gain CFO approval?

 If not, we should talk!


Sources:
CFOs are the New Technology Evangelists

Gartner Reports that CFOs are Large and in Charge

The CFO as Technology Evangelist

CFOs Alone Are Making 26% of IT Spending Decisions, Gartner Survey Finds

Tuesday, July 08, 2014

Oops They Did it Again! Gartner Downgrades Overly Optimistic IT Spending Forecast

According to Gartner, worldwide IT spending was expected to reach $3.8 trillion in 2014, a 3.2% increase from 2013 spending levels.

Although the forecast at the beginning of the year predicted healthy growth for 2014, these same Gartner forecasts have been overly optimistic the past two years. And sure enough, Gartner had to once again lower their forecasts substantially.

According to their latest predictions, Gartner estimates that spending will rise only 2.1% for 2014, down over 34% from the 3.2% growth rate Gartner had predicted at the beginning of the year.

Examining their 2013 predictions, Gartner indicated IT spending would grow 4.2% for the year. When the dust settled on 2013, the IT spending growth was a mere 0.4%

In 2012, initial rosy predictions of 3.7% growth were never realized, coming in around 1% by year-end; This despite the economy improving slowly over the same time frame.

Looking back at the reasons for the forecast shortfalls, Gartner indicated economic headwinds, a shift from land-lines to mobile, even blaming exchange rate fluctuations.

This time around managing vice president Richard Gordon, in an interview with ComputerWorld, indicates that:  "In the context of an improving global economic situation, to have IT spending be anemic, in the low single digits, might be a surprise on the face of it, but customers aren't necessarily cutting back on spending, they're getting better deals for their money and spending their money carefully."

We believe that Gartner is getting closer to the real reasons for the shortfalls, but still feel that they have missed a major "sea change" in IT spending and decision-making in their continued overly optimistic forecasts.

For IT solution providers who may be using these forecasts and were expecting a turnaround in 2014 spending levels, another slower than expected year has significant implications for your organizations' sales and marketing strategy.

Frugalnomics in Effect
So what are the real reasons behind the continued slow growth? I believe it all revolves around Frugalnomics:

1) Although progressing, real economic growth remains slow. As a result, organizations have learned how to permanently “Do More with Less”.

2) Although new technologies like mobility, big data, social collaboration and the cloud are hot topics, and they promise to fuel the next big IT investment wave, they are taking a little longer to catch fire than pundits claim, are replacing spending on other projects and not adding to overall spending, and are not significant enough to affect the annual growth figures - yet.

3) Purchase decision-making has significantly changed, now driven by buyers who are:
a.   Highly empowered – privately controlling the decision making process with ever more competition for each deal and more discounting,
b.   Risk averse – afraid of making a wrong decision, and instead choosing to remain with business as usual / status quo,
c.    Frugal – with over 95% of IT decisions now requiring a solid business case with significant ROI and fast payback according to IDC.

4) Most IT spending decisions are now driven and controlled by business groups vs. formal IT. At the same time, more and more spending is occurring in the shadows, by individual users and groups without the formal knowledge of IT. This “dark” spending is not showing up in the growth figures. When it comes to business and shadow purchase decisions, most IT solution providers are not adept at selling to the business groups and capturing dark spend.

All of these conditions still exist, indicating that Frugalnomics remains in full effect, and as a result we expect that Gartner’s even bumped up predictions for 2014 will prove overly optimistic.

Most importantly, you need to take Frugalnomics into account as you evolve your sales and marketing strategies and investments to meet the challenge.

Surviving Frugalnomics - 3 Things To Do Now
To help meet the challenge and Survive Frugalnomics, we recommend three “must do” programs for the near term:

#1 - Engage Frugal Prospects with Provocative Marketing
Todays’ buyers are more risk averse and frugal than ever, with 58% choosing to “Do Nothing” versus considering a change and your solution (SBI).

Prospects will choose to stick with the status quo unless you can proactively and provocatively quantify that they have a pain worth addressing. 

And those opportunities you thought were progressing through the waterfall / sales process to “wins” will stall unless you can help successively convince the prospect that the issue you can help solve is real, that it is a high priority worth addressing over all other issues on their plate, and that your solution represents a real low risk / superior value solution with unique competitive advantage.

In order to connect and engage with “Do Nothing” buyers, helping them through the decision making journey, you need to help them realize:

  Why Consider a Change? - the Prospect has a pain worth addressing and a significant cost of “Do Nothing”,
  Why Change Now? – the Prospect should not wait to address the issue because every day is costing them, they are leaving good money on the table (significant bottom-line impact, ROI and fast payback), and they are falling behind competitively (illustrated through peer comparison benchmarks),
  Why Your Solution?– that your solutions can deliver unique and superior value at a lower total cost of ownership (TCO).

So how well does your current content marketing help answer these key value-focused decision maker questions in a compelling and quantified way?

#2 - Empower Sales with Value Storytelling and Quantification
According to SiriusDecisions, the #1 reason why sales reps fail to meet quota (for the 3rd year in a row) is their “inability to effectively communicate value”.

Sitting in on the majority of sales presentations and you can see that most are still delivering empty product pitches or pseudo-solution selling asking a few questions and then jumping into canned “death by PowerPoint” presentations. According to Forrester, prospects indicate that less than 10% of sales engagements are focused on customer value (down from a paltry 12%).

Despite significant changes in prospect expectations, sales leadership recognizing that value selling is needed in order to meet quota, and the millions spent on solution / value selling messaging and training, only about one in ten sales professionals engage with “value”.

So how well do your sales professionals and channel partners engage with value and what are you doing to address this "value gap" challenge?


#3 - Close the Deal with a CFO-ready Business Case 
CFOs are large and in charge of many IT purchase approvals. According to a Gartner and Financial Executives Research Foundation research survey, the CFO is becoming the top IT decision maker in many organizations, with:
  Over 75% indicating significant decision making involvement from CFOs,
  41% indicating that the CFO is one of the main decision makers for IT investments.

 From the CFOs we talk to, they indicate that proposals:
  Won't be considered a priority without a business case, and the larger the proposal, the more detailed and formal the case has to be,
  Won’t be advanced unless they show that the proposed project is low risk and with low resource requirements, as “do more with less” applies regardless of the ROI,
  Won't be approved unless you show that the issue being addressed is a priority with a high cost of “doing nothing”, quantified savings / benefits from the proposed solution, and a significant ROI and fast payback,
  Won't be signed off unless you can prove your solution has a lower total cost of ownership (TCO) / better value than competitive offerings.

With Finance playing such a key role in IT decision approvals, it is imperative that proposals contain the business case content that CFOs need to provide approval, otherwise your deals will be stalled or delayed in the final stages, and you may be losing critical deals to competitors who make the better CFO case.

So how well do you deliver the financial justification / ROI business cases that CFOs demand?


The Bottom-Line
Gartner has once again lowered the IT spending growth forecasts, proving again that they are being overly optimistic in the face of Frugalnomics.

With Frugalnomics in full effect, IT solution providers need to implement a more value-focused approach to their sales and marketing strategy, content and tools.

If value marketing and selling are not effectively implemented to account for Frugalnomics, the majority of your deals will continue to stall, sales cycles will get longer, and heavy discounting will prevail.

For the rest of 2014 and well into 2015, IT sales and marketing professionals should consider three initiatives as a top priority to help address the forecast adjustments and best Survive Frugalnomics:

1.            Engage Frugal Prospects with Provocative Value-Focused Marketing
2.            Empower Sales with Value Storytelling and Quantification
3.            Close the Deal with CFO-Ready Financial Justification / ROI Business Cases

To learn more about suggested best practices to help you Survive Frugalnomics, click here.


Sources:
IDC 2014 Buyer Experience Study (Oct)
Forrester Sales Enablement Conference 2014
SiriusDecisions SiriusIndex, results from 2011 – 2014

Tuesday, June 24, 2014

Qvidian & Alinean Announce Strategic Partnership to Deliver Comprehensive Sales Execution Solutions

Partnership Helps Companies Overcome Their Selling Challenges to Close More Business Faster     

CHELMSFORD, MA and ORLANDO, FL – June 24, 2014 - Qvidian, the innovator in sales execution solutions, and Alinean, the leading creator of interactive B2B value selling and marketing tools, today announced their strategic partnership to help companies overcome the sales challenges of better communicating value during the selling process in order to accelerate their revenue growth.

According to SiriusDecisions, the number one reason sales teams fail to meet quota is their lack of effectively articulating value to prospects. Unfortunately, only 1 in 10 sales reps have made the transition from pitching products to engaging prospects with value according to Forrester Research, and 60 percent of buyers disengage with sales because reps do not communicate compelling value according to Qvidian’s recent Sales Execution Trends report.  In an environment where leaders want to drive profitable revenue growth, increase win rates, and improve overall quota attainment, organizations are struggling to close this important sales execution gap and achieve their goals.

“In our research, when we asked sales executives to share their top sales challenge, 71% of sales executives indicated it was their reps "inability to effectively articulate value", said Jim Ninivaggi, Service Director, Sales Enablement Strategies SiriusDecisions. “Ensuring salespeople have the right knowledge, skills and tools to maximize every buyer interaction is the heart of sales enablement. Combining Alinean's value actualization offerings with Qvidian's playbook capabilities can provide sales organizations an effective sales enablement solution to help address that top challenge.”

“This partnership joins two integral components for sales leaders – a dynamic guided selling system to drive successful sales behavior and captivating tools to better present value,” stated Qvidian President and CEO, Lewis Miller. “This is a game changer for organizations seeking to help transform their sales teams and make them more agile and efficient in an ever changing selling environment.”

Qvidian provides sales execution solutions, including a cloud-based guided selling system and a personalized content engine, designed to help sales organizations succeed faster by ramping new sales reps faster, helping sales teams exceed quotas, and increasing overall sales efficiency.  Alinean helps sales teams communicate value to today’s more informed, skeptical, and frugal buyer through effective value messaging and interactive online and mobile sales tools.

“Sales leaders know there is a value communication gap between buyer expectations and current sales capabilities, but continue to provide the same content, tools and support while expecting different results,” stated Tom Pisello, CEO and founder of Alinean. “This partnership will provide sales teams with the real-time guidance needed to have more provocative value-focused conversations, improve selling effectiveness and achieve revenue growth goals.”


Click here for the press release announcement from Qvidian: http://www.qvidian.com/about/news/qvidian-alinean-announce-partnership

Thursday, June 19, 2014

SiriusDecisions Research: Longer Sales Cycles Drive Need for Change


Sales cycles are taking longer than ever, lengthening by 24% over the past two years, this according to research by SiriusDecisions.

Just two years ago, the average sales cycle was 6.4 months, but deals are now taking much longer to close, extending to just over 8 months. Why the longer sales cycle?

First, buyers have changed, now more skeptical and frugal, a condition we have term Frugalnomics. Regardless of will, today’s buyer finds it difficult to evolve current practices / solutions, sticking with the status quo unless there is overwhelming evidence that the issue they are faced with is costly enough to immediately address, the benefits of your proposal are significant and the risks are low.

There are also many more decision makers involved in each purchase, driving a more complex review / approval process and longer sales cycles to gain consensus. According to research by IDC, 43% more stakeholders are now engaged in each decision compared to just 3 years ago; more than 10 decision makers in deals greater than $500K.

And even when the decision makers are convinced that your proposal is worthy, they are woefully short on budget and resources, delaying commitment even further.

However, the sales cycle delays are not just because of a changed buyer and Frugalnomics. According to IDC, almost 40% of decision-making delays are due to vendors not providing the right decision support information or requested deliverables on a timely basis. Now some of this may be bellyaching or excuses on your buyer’s part, but there is likely some merit to this feedback.

Therein lies a great opportunity to shorten the sales cycle, by up to 4 months according to IDC, by empowering sales reps to ignite and better facilitate buyer’s decision making.

The recommendation, proactively guide the process by answering three key buyer questions:

1)  Is the issue worth addressing as a priority? - There are many challenges competing for your prospect’s time. Often your prospects are not even aware of the severity of the issues you are trying to address, leading to stalled deals and way too many “no-decisions” in the pipeline (up to 60%). Proactively helping them to diagnose new issues, and quantifying the cost of “do nothing” is key to ignite the decision cycle and get deals from status-quo to “Yes”.

2)  What’s the value of the proposal to each stakeholder? – Getting all of the stakeholders on-board with the purchase decision is difficult for your champion, but you can provide them with the fuel for consensus by providing the value messaging and quantification for each relevant decision maker – presenting each with a unique point of value relevant to their challenges and key business drivers.

3)  What’s the financial justification / ROI? – 95% of decisions now require a business case in order to gain approval, however, less than 20% of your prospects are able to do this on their own, causing delays of 1 month or more per decision. Proactively delivering a CFO ready business case is key for you to gain project approval.

In answering all three of these key decision making questions, your ability to improve value communication and quantification is the key.

The Bottom-Line

With Frugalnomics still in effect, your sales cycles have likely extended over the past few years, but you don’t have to settle for deals taking longer than ever to close. By facilitating the buyer’s decision-making process and proactively providing the answers to three key buyer questions regarding the value of addressing key challenges and your proposed solution, you can indeed accelerate buyer decisions.

So, what is the tangible impact of accelerating your sales cycle? If you are able to implement the recommended practices to drive a 1-month reduction in the sales cycle time you can generate over $4M in incremental sales revenue for every $50M in sales territory / quota.

And what about improving the ability for your sales reps to ignite stalled decisions? You can generate an additional 8% of sales revenue, or $4M for every $50M in territory is possible.

What would you be willing to invest for a 16% sales revenue increase?  Improving your sales reps ability to communicate and quantify value in order to ignite buying decisions and accelerate sales cycles is clearly an opportunity worth addressing.