Wednesday, September 30, 2015

The Rise of the Value Management Office (VMO)?

B2B solution providers are realizing they need to do a better, more consistent and comprehensive job
of communicating and quantifying value to ever more frugal prospects.

However, most investments are spotty and most value programs are falling short.

Does this remind you of your organization?
  1. Your Marketing works hard to develop what they believe are effective value propositions, insights and messaging, all too often without enough sales and value consultant involvement. And then, they post black-box ROI calculators for customers to use on the corporate website.
  2. Your Sales enablement creates their own set of value presentations and tools, and these often don’t align with the marketing positioning and tools. Then, the sales tools are thrown over to sales reps and channel partners without enough education, certification and support to move the needle.
  3. Value Consulting is invited into the big deals, bringing their own twist on value engagements and business cases. Customized spreadsheets and reports are delivered which may or may not align with what the prospect already received from marketing and sales.
  4. Once the sale is made, too little effort is placed on assuring the value proposed is actually measured or delivered.  Value realization is an afterthought, or not measured at all.
  5. And through the process the Value Intelligence as to current prospect costs and true value delivery is squandered or locked in individual prospect records and sales / consulting spreadsheets.

Think about the duplicative spending from the islands of value messaging, tools and training, lack of leverage, and the ineffectiveness of disjointed approaches with prospects and customers.

Could this be why the #1 revenue growth challenge for B2B solution providers remains “the inability to effectively articulate unique value” for the fifth year in a row?

A cohesive, orchestrated and optimized approach is needed to get value marketing, selling and consulting right.

A New Center of Excellence - the VMO

To overcome this challenge, many leading B2Bs are turning to VMOs: the center of excellence aligning value marketing, selling and consulting, - with the mission of proposing, proving and improving value to customers.

The goal of these VMOs? To centralize best practices, tools, insights and databases, in order to provide much needed rules, guidance, standardization and governance and drive better efficiency and effectiveness in value investments.

Without a centralized office, it is difficult to assure that value is implemented cross functionally, and delivered consistently throughout the buyer’s journey. The VMO can help drive the approach across groups and throughout the journey:
  1. Value Marketing – helping to develop and deliver value messaging frameworks, insights / benchmarks, go-to-market content (like challenge / value infographics) and tools (like cost of “do nothing” and ROI calculators).
  2. Value Selling – Driving the development and delivery of sales-ready value messaging, presentations, storytelling, quantification and proposals, assuring sales reps and channel partners have the right tools, processes and education / certification.
  3. Value Consulting – providing standards, engagement practices and tools for pre-sale financial justification / business case proposals, post-sale value realization, and value intelligence benchmarks and databases.

Most often the VMO is born from Value Consulting or Sales Enablement, but regardless of the catalyst for the group’s creation, should consist of a cross functional team of Product Marketing, Sales Enablement and Business Value Consultant / Engineering team members, working together to drive the programs, practices and deliverables. As well, the VMO should gather and promote executive directive and support.

Some of the tangible benefits VMOs help organizations realize include:
  1. Consolidation of dozens of different, inconsistent and less than effective value messaging, presentations, tools, contractors and programs, helping to reduce duplicative internal efforts and leverage strategic sourcing from 3rd party collaborators.
  2. Increased Speed and Agility, leveraging standards frameworks and collaborative, additive efforts to accelerate programs from a common metrics, knowledge and practice base.
  3. Transition and Adoption, a collective effort from different groups in all customer communications to drive product to value.

So, does your organization have a VMO or are you considering one?  
If you want to hit proposed growth goals, now might be the perfect time.

Learn more about the importance of a Value Management Office and best practices in the book: Frugalnomics Survival Guide - How to Use Your Unique Value to Market Better, Stand Out and Sell More 

Monday, September 28, 2015

The Importance of Getting Value Marketing and Selling Right

Checkout this new video about the #1 revenue growth challenge over the past five years, and why we need a better, more comprehensive approach to get value marketing and selling right.

Tuesday, September 22, 2015

Three Challenges that will Impact Your 2016 IT Sales and Marketing Plans

If you are in IT sales and marketing, there are three significant challenges of which you should be well aware when setting up your budgets and plans for 2016.

IT Spending on the Decline?
First, Gartner announced mid-summer that IT spending is on the decline. A predicted anemic increase in IT spending at the beginning of 2015 has now been replaced with a 5.5% decline (compared to a paltry 1.6% growth in 2014).

Although Gartner blamed the decline on a rising dollar, we don’t buy it and have seen where prior forecast declines by Gartner were actually blamed on a declining dollar!

The real reason: We are in the era of Frugalnomics, so despite the rising importance of technology, do more with less is the mantra and Cloud / Service models are reshaping the spending landscape.

For you, an already price sensitive and competitive marketplace could get dramatically more so over the next 12 months and beyond, especially if you are in one of  five key technologies that will be most constrained:
  1. Communications Services – Taking the biggest hit, a move to subscription services, price erosion and competition in communication services are combining for an expected 7.2% annual decline.
  2. Devices – PC and tablet sales are struggling, with smartphone spending and a Windows 10 upgrade cycle unlikely to make up for the expected 5.7% annual spending decline.
  3. IT Services –Despite increases in business /technology complexities and the need shrinkage, a big reason why several service providers have announced significant headcount reductions.
  4. Data Center Infrastructure – storage and networking are expected to decline a significant 3.8% YoY, with decision makers postponing upgrades and extending lifecycles for on-premise infrastructure as they figure out their cloud / hybrid strategies. One bright spot is mainframes, benefiting from delayed refreshes during the recession and new product introductions.
  5. Enterprise Software – Although productivity / process improvements from software remain an important investment priority, big software purchases are being replaced with SaaS, and despite a healthy number of transactions, spending is declining 1.2% YoY, with significant pricing pressure.
Regardless of whether you are marketing / selling one of these five technologies or something different, there is a tangible impact to your from IT spending constraints:
  • Buyers are now more than ever sticking with status quo versus considering new proposals.
  • Personal risk is higher than ever, making emotions and trust more significant decision drivers
  • More projects will be unbudgeted, so a stronger business case will be needed to convince frugal buyers that the project is a priority and the solution is low risk / high reward.
Is your content ready to help convince buyers that the challenges you address are investment worthy in a constrained spending environment?

Are your sales reps / channel partner sable to  emotionally, logically and credibly convince more frugal buyers to allocate shrinking budgets for your solutions over other projects? Can they defend you selection and price against competitors and discounts?

More Stakeholders in Every Decision
Second, there are more stakeholders involved in every decision. IDC indicates that the number of stakeholders has dramatically increased 43% over the past three years, Now, more than 8 are involved a typical technology decision. If your proposals are more than $500k, you now average 10 stakeholders per decision.

More stakeholders several significant challenges for your content, sales conversations and proposals:
  • Each stakeholder has a unique point of value, making it difficult for one-size-fits all approach to resonate with what is important and will motivate / convince each decision maker.
  • It is difficult to reach each stakeholder directly, so your presentations and proposals often need to do the selling for you.
  • Sales reps and channel partners have to identify and turn the key stakeholders they are able to meet with into influencers and convincers within the organization.
Is your content personalized to articulate your unique value to each stakeholder?

Are your sales reps and channel partners arming influencers with the right conversations, storytelling and proposals to communicate and quantify your value in proxy?

IT Spend No Longer Controlled by IT
Finally, we are at a significant turning point where IT spend is no longer controlled by IT. Last year, IDC reported that 48% of IT spending was controlled or influenced by the business (IDC). In 2015, the trend for business unit control has accelerated, with business leaders and their reports for the first time in history in control of the majority of IT decision-making.

And this trend is only accelerating, with Gartner predicting that by 2020, business units could control or influence as much as 90% of technology purchase decisions!

The risks?

1.     What is valuable to business and financial buyers is not the same as what matters most to technical buyers.

2.     Most marketers and sellers aren’t reaching the business buyers who are now sparking demand and purchase cycles.

3.     And when the business buyer is engaged, most sales reps and channel partners are not having the right conversations, and the traditional technology buyer centric content they are using isn’t helping reshape the business engagement.

So how well does your content, sales reps and channel partners speak the language of business and articulate your unique business value to a completely different breed of decision makers and budget holders?

The Bottom-Line

If you are in IT sales and marketing, these can be challenging times, but with change comes disruption, and an opportunity for the savvy to capitalize.

The research is clearly indicating significant shifts:
  1. IT spending is on the decline
  2. More stakeholders are involved in each purchase decision
  3. Business units are now in control of the majority of technology spending.

And therein is a significant opportunity, for you to evolve your 2016 strategy to take advantage of these shifts The key is to reshape your content, conversations and proposals to be more effective in this constrained, complex and frugal environment:
  1. Target the status quo – developing the right value messaging, insights, storytelling to illuminate challenges with business-as-usual and the cost of “do nothing”.
  2. Communicate to the business buyer - targeting and engaging in the language of business stakeholders, aligning with the unique “point of value “ of not only technical, but the ever growing power of business and financial stakeholders.
  3. Fuel value conversations – communicating and quantifying the cost of “do nothing” and your unique value to ever more skeptical and frugal decision makers.   

For a complete roadmap on how to best handle these trends, check out the: Frugalnomics Survival Guide - - How to Use Your Unique Value to Market Better, Stand Out and Sell More


Frugalnomics In Effect: Gartner Predicts 5.5% Decline in IT Spending for 2015 -

Thursday, September 10, 2015

Growing Value: The Value Selling and Realization Summit

Did you know ….
  • Over 95% of B2B buyers demand proof that you’ll deliver value, demanding financial justification / ROI quantification prior to purchase approval (IDC)
  • Yet, only 7% of buyers say your content and sales reps as value-focused (The Economist).
There is a decided Value Gap between the approach buyers want you to have, and what most B2B vendors are delivering.

So how do you best evolve from empty product pitches to a more effective value selling approach?

Join us Feb 29 – Mar 1 2016 for the Value Selling & Realization Summit in Dallas TX, a gathering of leading analysts, value consultants / engineers, product marketers, sales enablement professionals and value selling solution providers, meeting for the first time to share research, best practices and experiences in order to bridge this Value Gap and Grow Value.

Featured analysts include: Jim Ninivaggi (SiriusDecisions), Joe Galvin (CSO Insights / MHI Global), Scott Santucci (Alexander Group / Forrester), Bill Kirwin (Gartner / Father of TCO), Randy Perry (IDC) and our own Tom Pisello (the ROI Guy / ex-Gartner).

Featured value experts include: John Foster (, David Breaugh (SAP), Cheik Daddah and Scott Sendel (Oracle), Michael Mitterer (IBM), Doug May (Splunk), and Jack Keen (Author / ROI Institute).

Wednesday, August 26, 2015

TCO is So 1990: Why TCS is the new TCO!

Think back to the 90's: Bill Clinton and the Bull market, Flip phones and the Internet, Forrest Gump and Pulp Fiction, Boy Bands and Nirvana, Friends and Seinfeld... and if you were in IT, the rage was TCO – Total Cost of Ownership.

TCO was first developed in 1987, to help compare the costs of different compute infrastructure. At the time, it was a battle between big iron vs. PCs and networked computing. TCO was vital in helping CIOs understand the true costs of not just buying the infrastructure, but owning and managing the systems over their useful lifecycle. The on going costs of administration, support were 3 to 5x more expensive than the original purchase price –– a real eye opener for many.

TCO was valuable as a financial model, to analyze the true and complete cost of IT across the enterprise and over time. The model was asset based, CAPEX focused and for the most part, isolated to the datacenter, network and desktop. At the time, the activities and costs associated with 90s IT were relatively easy to codify – a chart of accounts with a handful of easily defined capital and operating expense categories.  You could examine internal spending and tally a handful of consultants and services providers to understand your true cost of computing or compare different solutions using the TCO model.

Today, enterprise IT is all about the Cloud, Big Data, Internet of Things, Mobility and BYOD. The business spends more on technology than central IT, compute services are sourced by business groups and users as a service, and new levels of technical and financial abstraction have emerged.  
To go along with the benefits of flexibility, scalability and agility with this new model, IT struggles with a loss of central control, compliance and security, way more configuration and services options, and more hidden costs and risks.

In a more complex and vital environment, the need for technology financial analysis is more important now than in the 90s. Public, Private and hybrid decisions abound, and having a financial model that can help organizations make the right choices is key. However good it was in the past, the old asset-centric TCO approach is difficult if not impossible to apply to the 2015 IT world.  

At the IT Financial Management conference in April, Bill Kirwin, well known as the “Father” of the original TCO models at Gartner, discussed the idea of Total Cost of Services (TCS), an evolved approach to determine the true costs of these new compute options and services.
Just like in the original TCO model, research shows us that it’s not just the initial Cloud service fees that have a cost, and that BYOD may not be the free lunch IT expected. There is a complex web of additional expenses, both internal and external to not just procure but manage, support and secure the business compute services.

Kirwin defines TCS as “the full life-cycle cost of the entirety of activities – driven by market forces and directed by policies organized with supporting processes and procedures - that are performed by an organization or part of an organization to source, plan, provision, operate, control and refresh IT services offered to consumers of those services.”

Here’s a quick comparison of how the TCS model can evolve the concepts of TCO and help create a better view of IT decisions and finance:

Asset based
Business Service Demands
Resource based
Consumption based
Cap-Ex focused with defined refresh cycles
Op-Ex centric and continuous
Management and support
Centralized IT+ a few outsourced services
External services + Internal IT + Business + End users
Labor Drivers
Keeping the Lights-On vs. Innovation
Security and Compliance
End User Operations
Futz-factor and Peer support
BYOD and Shadow services
Indirect costs
SLAs, Velocity, Flexibility, Scalability, Elasticity, Agility and Risk

Technology needs a common costing model that will enable IT to compare different options and measure the true cost of these new service models.

For 30 years, TCO has been a useful metric to understand the cost of the old IT world.  But times have changed, and with it, the entire delivery model for IT services. As a result, we need a better financial model to help optimize service decision-making, and illuminate hidden costs and risks. TCS could be that new model.

When the “Father of TCO” says it’s time for TCO to grow up, perhaps it’s time to listen? 
TCS is the new TCO.

Bill Kirwin , CEO and Founder of IIIE, will be one of our featured presenters at the Value Selling and Realization Conference in Dallas TX on Feb 29/March 1 2016, discussing TCO and presenting the TCS model and it’s potential impact on technology decision making and optimization. Mark your calendars and stay tuned for this inaugural event.

Comparing and Selecting Solutions Using TCO -

The Frugalnomics Survival Guide - How to Use Your Unique Value to Market Better, Stand Out and Sell More -