Thursday, April 29, 2010

Today's Most Significant Challenges for B2B Marketers to Overcome

MarketingSherpa, indicates from their latest research, “The call from the sales force is not Give us more leads -- it’s Give us better leads.”

In their annual B2B Marketing Benchmark Survey of 147 Marketing Executives, MarketingSherpa indicates the top challenges for marketing, all of which point to Value Marketing Tools as a potential solution.
Based on percentage of respondents challenged, the top issues include:
  1. Generating more high quality leads (69%) and higher lead volumes (35%)
  2. Helping sales reduce lengthening sales cycles (39%)
  3. Educating buyers on the value of product features and benefits (37%)
  4. Marketing to a growing number of people in buying process, especially more stakeholders with different value propositions, and more scrutiny from economic buyers (33%)
Our advice: Interactive Demand-Gen White Paper Personalization, Assessments, ROI and TCO tools can help solve some of these issues by:
  1. Providing the compelling, personalized and credible content to cut through the noise and connect to value driven / economic decision makers.
  2. Reducing the sales cycle and educating buyers via delivery of personalized consultative advice as to what pain points should be address,  intelligent recommendations on solutions to solve their issue, and urgency from quantified value and competitive total cost advantages analysis for proposed projects.
  3. Sharing value propositions and quantified savings, benefits and ROI for all customer business unit stakeholders and frugal economic buyers.

The research and synposis can be found at (for a limited time):

Wednesday, April 28, 2010

Selling in the Age of Austerity

In 5 years IT will dramatically change, leaving many IT solution providers at a loss for how to connect and sell to a dramatically changed landscape.

According to a Corporate Executive Board research report: "The IT function of 2015 will bear little resemblance to its current state," with "fundamental changes in how the function is organized and managed."

The report is summarized in this CIO Insight article:

Some of the most significant changes reported by CEB include:
> Fewer than 25% of current IT employees will remain;
> Many activities will devolve to business units, be consolidated within other central functions such as HR and finance, or be externally sourced;
> The role of the CIO will change - expanding to lead a shared service group, or shrink to manage technology delivery.W

How the solution provider markets and sells to, and what the customer needs to know to make a decision will dramatically change if these trends prove true:

> Sales and marketing needs to establish tighter relationships with the business - the power shift will be dramatic from IT to the business where currently the business units only own 35% of IT purchase decisions versus 40% under IT centralized control (with the rest "shadow" projects / spending). When 75% of decision making shifts to the business units will sales be prepared? What about marketing?

> Solution providers will need to change the dialogue to connect with business focused vs. IT centric buyers - With IT decisions a part of the business, buyers will care even more than ever about business value. Already cost conscious IT buyers will migrate benefits analysis from IT focused cost savings metrics to business impacts when setting priorities and quantifying the business case.

> Business units will need more help than ever determining pain and path - proactive advice will be needed to help business units understand pain points they may not even know they have, and provide consultative advice on path to be taken.

> Business units care more about value than IT - ask any business unit leader if they do a business case for proposed investments, or if they track value impacts / metric improvements on investments and they will say yes much more than IT buyers / leaders. Value realization and proof is a key element of any business unit decision, and marketing / sales needs to recognize that driving business improvements, improving productivity, streamlining business processes and saving costs will be key to selling technology solutions to even more business focused economic buyers.

How will your marketing and sales be ready for this dramatic change in the IT landscape?

Windows 7 ROI Calculator Updated

The Windows 7 ROI Calculator is a tool that lets users enter in their current PC configurations – such as how many computers and what operating systems they run – and selecting a Windows 7 version, tally the current total cost of PC ownership and compare it to improvements with Windows 7

The Windows 7 ROI Calculator, using case study research from Microsoft deployments, quantifies how much money IT and the business would save or lose by switching to Windows 7, including a calculation of key financial metrics such as ROI, and time to breakeven on the Windows 7 Investment (payback period).

The calculator was developed and launched by Alinean about 6 months ago and initially contained research from early case studies of Windows 7 pre-release deployments.

With Windows 7 released for some time, it was appropo to do a refresh and put in results of even more real world findings, as well as incorporate valuable field feedback from users.

In this latest round, we updated the Windows 7 ROI Calculator with:

1) the latest research from Microsoft Windows 7 case studies and deployments, refining the benefit assumptions, as well as cost to deploy metrics.

2) deriving the value per user of key Windows 7 Enterprise features and MDOP to highlight the potential value for Windows 7 Enterprise vs. other editions.

The latest additional research reinforced that for most organizations, improving management with an optimized desktop based on Windows 7 and MDOP can provide some significant productivity benefits and cost savings. And as Microsoft worked to lower the cost of deployment, with lower change costs, the return on investment is superior to prior versions. In engagements we have been involved in, estimated savings of 10%, to as much as 30% are possible, with ROIs of 130% to 350%.

See for yourself what you can save with Windows 7 at:

Friday, April 23, 2010

Gartner: Nearly half of IT, telecom companies plan to boost marketing spending

A survey by Gartner found that 44% of high-tech and telecommunications companies plan to increase their marketing budgets this year.

The report was based on an online survey of 206 global high-tech and telecommunications providers conducted in December.

Forty-one percent of executives surveyed said they would keep marketing budgets flat this year, while only 15% said they plan to decrease them.
Among those companies planning marketing budget increases this year, 30% expect to boost budgets between 1% and 15%, and 13% of respondents plan budget increases of between 16% and 30%.

See the B2B Magazine summary here:

Thursday, April 22, 2010

SMB IT Spending Recovers: Looking for ROI and Diagnostic Guidance

Microsoft Corp. released its second annual Microsoft SMB/Partner Insight Report and the study shows that although SMBs remain concerned about the business climate, most will increase technology spending in 2010, highlighting the role of IT as a strategic business tool in this crucial sector of the global economy.

Of great note is that:
1) Economic Buyers Reign, even in SMBS: SMBs are cost conscience with their spending, with the economic buyer clearly in control. According to the study, SMBs will invest in IT that directly benefits their bottom line — either by reducing operating costs, improving employee productivity, or acquiring and retaining customers.

2) Looking for Strategic Guidance on IT Investing: Most SMBs lack dedicated IT staff, and rely heavily on local technology partners to help them evaluate, implement and maintain the right IT solutions. Facing increasingly complex IT options and a challenging economic environment, SMBs are now looking to these partners to provide more strategic guidance that is better tailored to their business, vertical and industry, the study found. Microsoft Small Business Specialists forecasted that customers would look to them most for help with cost-reduction measures, increasing remote management, and a "one-stop" experience aligning technology with business needs.

In the study, based on a survey of Microsoft Small Business Specialist partners, 63 percent of respondents predicted their SMB customers will spend more on IT in 2010, up from just 25 percent in 2009, with overall SMB IT spending anticipated to rise by an average of 16 percent over 2009 levels. Results from more than 500 partners in the U.S., U.K., Canada, Brazil and India indicate that SMBs view virtualization, IT consolidation, software as a service, customer relationship management (CRM), and support of remote workers as their most important technology investments.

Recent industry research confirms many of these findings and attests to the importance of SMBs to the economy. According to James A. Browning at market research firm Gartner Inc., "The SMB market represents 44 percent of the total IT market spending. We predict that SMBs will spend $800 billion on IT in 2010. Our research indicates that midsize businesses worldwide will increase their IT spending in 2010 by 5.4 percent over 2009 spending levels."*

The complete 2010 Microsoft SMB/Partner Insight Report is available at

Virtual Desktop (VDI) 9-11% more expensive than PCs?

In a presentation at Microsoft's Management Summit 2010, new research was previewed from Microsoft on the total lifecycle costs of VDI compared to traditional desktops, particularly for Office Workers.

According to Microsoft, VDI promised benefits including:
> Centralized Management - manage physical and virtual clients from a single console, centralized desktop lifecycle management
> Enhanced Security and Compliance - data is always locked in the data center, improved compliance through centralization
> Anywhere Access for Connected Devices - access desktops from any connected device, enable rich desktop experiences on thin clients and older PCs
> Increased busienss continuity - datacenter grade business continuity and disaster recovery, quickler resolution to desktop failures.

Microsoft’s objectives in the study were to understand customer perceptions and expectations from VDI, gather real world data from deployed organizations, and
provide customers with TCO guidance from a collection of industry experts.

Surveys of 105 organizations in Financial Servies, Government, Manufacturing and Retail,indicate that unanimous market perception / sentiment is that VDI has a lower TCO than the PC. Deeper analysis of actual costs and savings indicate that VDI is indeed cheaper than the PC in certain use cases, for example with task workers, but can be more expensive for office / knowledge workers, particularly when the organization's PCs are already well managed.

For the study Total Cost of Ownership (TCO) was used to best compare the costs of VDI vs. traditional PCs, tallying not just the up front costs, but the total costs over the entire lifecycle from planning, through deployment, management, evolution and retirement. Created by my friend Bill Kirwin at Gartner in 1989, it has been used since to great effect to help buyers make economic decisions for key IT solutions.

The TCO model compared the Direct Costs of both solutions, including CAPEX – Hardware, Software, and OPEX – Administration, Operations, Fees. As well, the service levels and capabilities of the systems need to be considered in any good TCO model, tallying the Indirect Costs for End-User Operations. The indirect costs include service level issues such as downtime / accessibility / support wait times when issues occur, as well as additional time users spend solving their own issues, or futzing with systems to get them to do what they need it to do.

The bottom-line is surprising to many who beleive that VDI always delivers a lower TCO than traditional desktops. Comparing a well managed office worker environment:

1) VDI was 9% more expensive than Windows XP SP3 -> $908/client/year for VDI versus $836/PC/year for Windows XP.

2) VDI was 11% more expensive than Windows 7

Of course these figures depend on the assumptions, and particular application. The study considered a well managed environment (Rationalized according to Microsoft's IO maturity scale) because implementing VDI often requires a certain base capability in order to deal with the added data center complexity. Because Rationalized environments are already optimized, VDI cannot drive enough additional labor savings to overcome the added capital for VDI hardware and software licensing.

Another key assumptions was an all office worker environment, where VDI currently has issues with user experience adding to indirect costs. Microsoft indicates in the study that many office worker applications, like VoIP might have degraded performance, and graphic intensive applications currently don't always perform well over WANs.

For environments that are unmanaged or not well managed, the savings from VDI for office workers turn positive, but in these environments the capability to effectively implement VDI and acheive the savings is diminished. For task worker environments, the savings for VDI are positive in most situations, delivering between 10-30% (source: IDC).

Having participated as an industry expert to review and validate the results, the study is an important one to open perceptions towards VDI. VDI indeed does not offer guarenteed savings. The application is the most important driver for VDI, not cost savings, and this study should maintain decision makers focus on that fact.

To calculate your own unique potential for savings, use the following on-line tool (registration required):

Microsoft blog on VDI TCO at:

Wednesday, April 21, 2010

Value of Assessment ROI & TCO Tools for Demand-Gen and Sales Enablement Campaigns

Today’s buyers are more conservative than ever, demanding that any investment they make drive tangible savings and business value – a fundamental change called Frugalnomics. Leading B2B solution providers recognize that old sales and marketing techniques need to evolve to meet these new buyer demands.

Alinean business value sales and marketing tools can empower solution providers to align with frugal buyer needs, fundamentally changing the engagement with prospects by revolutionizing corporate web sites and sales presentations / proposals from antiquated feature / function / price, to customer focused value engagements:.

• Developed for B2B web-sites and on-line campaigns to help prospects assess opportunities and quantify the value of proposed solutions, Alinean’s value-based interactive demand-generation tools have been proven to entice 50% more leads compared to other initiatives, achieve 240% superior conversion rates, and increase on-line loyalty with 44% increases in repeat visitors and 65% increases in time per visit.

• Used to evolve direct and channel sales professionals from antiquated features / function / price selling, to modern solution selling techniques, Alinean value-based interactive sales tools have been proven to reduce the time it takes to develop credible assessments and business cases from days to an hour or less, reduce discounting and increase deal size by 20%, reduce sales cycles by 30-40%, drive channel partner loyalty, and increase the competitive success rate of proposals by over 60%.

In 2009, Alinean and IDC updated annual research conducted since 2003 on the ROI from implementing business value tools. In this research, we examine the monthly activity and usage reports of at least 15 Alinean customers to determine the tangible value these programs were delivering. Did the Alinean Business Value Tools drive incremental sales, reduce sales cycles, increase deal size, generate more demand, and improve sales / consulting productivity as anticipated?
Research Results

The results of the research were compelling, as the investment in value selling tools has proven to be one of the highest ROI investments an organization can make in sales / marketing operations. The survey revealed that the average Alinean Business Value Tools programs delivered:
• An ROI of 810%, meaning that each $1 invested in an Alinean program generated $8.10 in incremental benefits.
• A payback of less than 3 months from deployment.

How was such a high ROI and quick payback realized?

For demand-gen marketing campaigns, compelling value oriented interactive tools is an absolute requirement for today’s frugal and skeptical IT buyers. Without personalized and quantified value proof points delivered via on-line interactive benchmarking, assessment, ROI and TCO tools, it is difficult to meet demand generation goals – attracting and capturing qualified prospects, and accelerating the sales cycle. Programs using self-assessment Alinean Business Value Sales Tools from the corporate web sites were proven to deliver:

• Resulting in 12% higher visit-to-sale conversion rate (versus less than 5% for registrants of competitive campaigns).
• Produced 3 times as many qualified leads as other competitive web promotion programs.

The leading virtualization provider needed to drive more demand generation and educate prospects on the value of virtualization earlier in the sales cycle in order to generate competitive advantage, and drive cross-sell to other virtualization offerings. An on-line interactive ROI/TCO Calculator was developed and utilized as value added corporate website content, as the destination for worldwide print and banner ad campaigns, and in other on-line direct marketing programs. The Alinean driven initiative generated over 2,000 qualified leads per month, the highest success and ROI of any prior marketing campaign.

For sales teams, the tools were often applied to deals during the pilot phase, pre-launch, and these initial deals often resulted in competitive wins, or helping to move deals that were previously “stuck”. Less than two incremental deals on average were needed in order to realize positive cash-flow on the tools investment. Moreover, many of these deals were multi-million dollar sales, and compared to the modest investment for the sales tools, derived enormous return on investment gains. The first year benefits included a 3% increment in related revenue, and incremental savings per direct sales representative of $30,000.

An add-on management utility was being marketed by a major IT solution provider. The utilities’ value proposition was compelling, and investment cost modest, but IT decision makers demanded ROI proof, and as a result, several deals were stuck while the IT buyers tried to make the case, and the vendor sales teams struggled for proof points. Case studies were commissioned, but did not provide all the proof needed. Alinean developed a tool based on the case study research for use by sales, channel partners and consultants in making the business case for the utility. Within a month, several 100,000+ seat deals were being proposed using the Alinean ROI sales tool, and these deals were quickly realized largely in part to the compelling business case reports, resulting in several multi-million dollar sales.

Researched Realized Benefits Summary

The tangible benefits measured from an investment in Alinean Business Value Tool programs for demand-generation included the following:

• Generate more qualified leads through value added ROI content and services and targeted value-oriented direct marketing and sales campaigns, leading to reduced sales cycles, and incremental sales, an average 20% increase in total lead generation, and a 40% increase in lead to conversion rates for related campaigns.

The tangible benefits measured from an investment in Alinean Business Value Tool program for sales enablement included the following:

• Reduce sales cycles by 20% via helping sales teams drive initiatives more proactively with prospects, and by automating business case development, eliminating the time it took prior to develop these reports for prospects or eliminating the time buyers spent developing their own cases.

• Reduce discounting and increase deal size for direct sales by 20% or more by migrating sales from features, function and price selling to business value selling.

• Reduce the time it takes to develop credible businesses cases from days or months to hours. Standardizing the team on a credible, enterprise class tool to help create benchmark, assessment, ROI and TCO presentations and reports, helped to improve sales and consultant productivity (40% savings in time used today to generate reports), and reduce sales cycles (by 20% or more).

• Increase the success rate of competitive sales engagements by over 10% by elevating perception of sales teams to strategic partners, and providing the quantifiable proof of TCO advantages.

• Improve the ability of consulting to offer more value added / billable services including benchmarking, assessment and ROI / TCO engagements, resulting in a 15% improvement in related services revenues.

• Empower channel sales with differentiating ROI selling approach and value added ROI services, helping to improve channels sales loyalty, effectiveness, satisfaction and retention. This resulted in 23% higher channel partner retention rates.

• Increase the success rate of up-sell and cross-sell initiatives by providing value proof for other product and service add ons, and via the implementation of on-going value measurement and reporting programs (using realized value of prior programs to sell new initiatives). A 25% measured annual improvement resulted for customers for which the sales tools were applied.

• Reduce the current ad-hoc investment in homegrown benchmarking, assessment, ROI / TCO tools and programs via standardization on a single provider, and eliminating internal SME burdens, a net savings of 25% in current consulting, licensing and internal labor costs.

Get your own Value Assessment on what Alinean Assessment, ROI and TCO Tools can produce for your economic buyer focused sales enablement / demand-gen campaigns:

Monday, April 19, 2010

Pricing B2B Solutions with Customer ROI

A recent article "How to price IT products in 7 steps" by Arpon Kar caught my eye about how vendors should use ROI to properly price solutions. At Alinean, and previously with Gartner and Interpose, have been working with vendors on creating ROI tools for use in engaging customers for the past 9 years, and from this experience, can say that many B2B solutions are not priced correctly because an ROI analysis is not done prior to setting price.

According to the article, the author recommends the following 7 steps:

1.Decide the various unique benefits from your product, such that there is no overlap.
2.Quantify the objective of deliverables for each benefit, by discussing the same with your client.
3.Map each benefit to its monetary value from the client’s data (or industry average).
4.Ask the client how much percentage deviation is acceptable from the quantified objective of deliverables mentioned earlier.
5.Discount the monetary value of each objective with the deviation percentage.
6.Sum up the discounted benefits.
7.Discount that sum by the operating profit margin of your client, and quote the calculated price.

In creating ROI tools, and using the set prices, there are dozens of instances where the benefits of the solution were not quantified and compared to price. As such, looking at the savings versus costs, the products were priced too high. For these solutions, only in the best conditions could the customer could obtain a positive return on investment (where the benefits / net costs were positive), and in most situations, the savings did not exceed the investment, resulting in a negative ROI, and no payback period (the time it takes from kickoff to where the investment is recouped by the savings). In a world where economic buyers now require payback in less than 12 months from deployment, and ROI > 150% in most instances, the producs were unsellable.

The teams quickly repriced after these exercises, but quantifying the value proposition and ROI up front could have saved change costs and issues as all of these were post launch.

In some instances more recently, solutions are being priced too low. One recently for a product lifecycle management / simulation solution has ROI > 1000% in almost every deal and only using hard dollar savings. Clearly room for higher pricing, or perhaps a more stratified offering.

We all know that intuitive pricing is valuable, competitive pricing essential, but this article does stress the importance ROI plays when pricing, and one which should be followed as a best practice by any product manager. Good article.

HP Launches Networking ROI Campaign with Alinean Tools

To drive more and higher qualified leads, HP Procurve and Carolina Advanced Digital, an HP partner, have launched a campaign and microsite to promote the ROI of its solutions.

The campaign is designed to help customers understand the value proposition of HP Procurve solutions, and use an ROI tool (powered by Alinean) to quantify personal ROI potential. On average, HP claims, and we have confirmed 400% ROI potential.

The tool and white paper are available from:

(registration is required)

9 More B2B Leaders rely on Alinean for Value Selling / MarketingTools

Today’s business buyers are more conservative than ever, demanding that any investment they make drive tangible savings and provide quantified business advantages – a fundamental change called Frugalnomics. Leading B2B solution providers recognize that old sales and marketing techniques need to evolve to meet these new economic buyer demands.

As a result demand has never been higher for Alinean's solutions, and more B2B solution providers are recognizing the need to connect with buyers on web sites and enable sales with Alinean developed assessment, ROI and TCO tools.

New customers this quarter include: Wipro, PGI, CSC, CiRBA, Acsis, MokaFive, Shoretel, Informatica and Office Max.

These 9 new accounts, adds to our ever growing list of loyal accounts including the best B2B solution providers including: HP, IBM, Microsoft, EMC, Dell, Intel, AT&T, Siemens, Unisys, Thomson Reuters, NetApp, Citrix, Juniper Networks, VMware, Symantec, BlueCoat, Novell, Cisco, Oracle, Sybase, and CA.

Blades Systems Insight 2010 Presentation

Had the pleasure to be one of the featured presenter at the Blades Systems Insight 2010 conference, discussing the ROI / TCO advantages of blade servers and how to quantify the value.

In the presentation, had the opportunity to present the latest IT economics research, and the ROI / TCO of Blade servers versus traditional options:

> IT purchase decisions have fundementally changed since the bursting of the tech bubble in 2001, moving from innovative solutions to bottom-line impact and cost savings focus. This shoft has been reinforced by the great recession.

> That IT budgets are still consumed with "keeping the lights on" spending vs. new applications and innovation for the business, 61% on sustaining operations, and 18% for innovations in 2009. Discussed how innovations will likely shift lower in 2010.

> Total cost of ownership (TCO) remains higher than most would like, particularly the labor overhead to manage IT assets. Ongoing costs are 3:1 vs. purchase price.

> Traditional servers have issues that drive higher than necessary TC) of $4K-$5K / server / year. These issues include: Inflexible: Static and hardwired; Over-provisioned: Wasting capital investments, power, cooling, and space; Manually coordinated: Change requires too many person hours, people and steps; Non-standardized practices: Processes are unique, with unique tools and inconsistency; and Expensive: More expensive to own than to build.

> Blade servers have some advantages to help lower TCO including the ability to simplify change management and provisioning procedures, reduce compliexity, use less power and space, and reduce Ethernet / FC / costs. With integrated / lower cost management tools, additional savings can be acheived.

> Blade servers can save 33% per year in direct savings on hardware, data center space and power consumption compared to traditional servers (over $1K per year per server), an additional 85% in provisioning and change management labor (an additional $800 / server / yr). Savings potential of 46% or $2K per year per server are likely.

In conclusion, provided two valuable resources we created for Dell and HP to calculate the advantages of Blade servers over Traditional servers:

Information on the conference can be found at:

Presentation is posted at:

Friday, April 16, 2010

Alinean Announces Migration of Sales & Marketing Tool Platform with Microsoft Developer Tools

Our latest press release pre-announces our new XcelLive(TM) platform, a revolution of our existing Assessment, ROI and TCO tool SaaS, which works with Microsoft .NET, Microsoft Silverlight, and Windows Azure to Improve User Experience, Agility and Reduce Costs. The platform is migrating from a legacy Java solution.

This new Microsoft-based toolset will help enable B2B vendors to develop new sales tool campaigns more quickly, converting existing spreadsheet-based tools to rich internet applications with no application programming, and standardize and centralize their value-based demand generation and sales enablement programs for better efficiency and lower costs.

The Alinean platform is used by leading B2B solution providers to create and deliver Web-based interactive Demand Gen and Sales Tool applications such as Executive Assessments, Return on Investment (ROI) Calculators, and Total Cost of Ownership (TCO) Comparison Tools.

Launching anew in May 2010, the migration from a legacy Java and Open Source development platform to the more powerful and flexible Microsoft solution stack is designed to:

•Increase agility – decreasing time to market for innovative features from months to weeks with the .NET Framework
•Improve User Experience – improve the usability of the tools, and more easily add key graphical, animation, and navigation features with new Silverlight user interface.
•Improve usage tracking and reporting – using Microsoft SharePoint to more easily manage campaigns, manage user identity and access management, and develop and deliver compelling usage reports
•Improve scalability and performance – supporting dramatic increases in number of customers supported number of concurrent users, and worldwide delivery with Windows Azure.
•Support both online and offline execution of the toolset
•Reduce TCO for growth, administration, support and maintenance

"Leading B2B solution providers rely on Alinean to develop and deliver value-based demand-gen campaigns and sales enablement programs," said Tom Pisello, CEO of Alinean. "By collaborating with Microsoft's integrated development environment and technology, we will be able to deliver these solutions to market faster, with more usability, performance and scalability at a lower cost than our legacy Java framework."

The press release can be found at:;_ylt=Ah95V0I4eZ9octz4fpS7s5yscq9_;_ylu=X3oDMTFkYzV2ZHBhBHBvcwM3BHNlYwNuZXdzSHViQXJ0aWNsZUxpc3QEc2xrA2FsaW5lYW5hbm5vdQ--?x=0

Thursday, April 15, 2010

Selling Software to the C-Suite REQUIRES Quantified Value

In a recent article on, Selling Software to the C-Suite, Stephen J. Bistritz outlines how presenting the value proposition is important in a down economy, and that throughout the buying cycle there are multiple opportunities to communicate value.

1) Value Proposition - early in the lifecycle you can guess at customer needs and propose how the solution mught derive value

2) Value Hypothesis - during engagement with the customer you can investigate pain points and how the solution can help customer save, streamline or overcome the issues.

3) Formal Value Reviews - post sale, reviewing the value received vs. the value proposed to determine gaps and assure value derivation.

Although overall we believe value selling is vital, and that the advice offered in this article is good, it is not specific / scientific enough to drive results and action on the part of a frugal buyer. The methodology addresses the art of value selling, but does not address the most important element - Show me the Money - the science of value selling.

Ever since the bursting of the tech bubble in 2001 buyers have fundementally changed. Previous technical buying on innovation, time to market, and features has now been replaced with economic buying, which requires QUANTIFIED proof of bottom-line impact, savings and superior competitive value. We call this change in buying attitude Frugalnomics, and sales and marketing needs to change to address these new market conditions.

Lets look at how value selling science can be used through the buying lifecycle.

Early in the buying process, during the discovery phase, customers need help understanding what issues they have. Many have day to day pain points which need to be discovered, but beyond that, many are so busy that they don't even know what problems they have.

Diagnostic tools need to be used to perform a health check and uncover issues and opportunities proactively. The opportunities need to be quantified so the customer understands the magnitude of the pain. The best health checks include:
> structured set of surveys and scoring to help facilitate discovery and help customers map where they are on a set of recommended best practices / capability & maturity improvements.
> peer comparisons - helping the customer understand where they stand compared to average and leaders in their industry, region and of similar size. The diagnosis and quantification drives urgency, essential in today's environment of fixed budgets and priorities.
> a prescribed mapping of the pain points diagnosed with recommended solutions - a roadmap for success.
> ability to use the science of the engagement, but not lose fact that each customer is unique and the presentation needs to be customized

In the middle of the buying process, the consideration phase, we prescribe that each of the recommended solution sets be modeled, simulating what the solution can do to help reduce costs, streamline processes and drive business advantage. Comparing the "do nothing" As Is scenario with the proposed To Be scenario after the solution is implemented quantified potential savings, and investment requirements. Key financial metrics of the project such as ROI, NPV, IRR and payback period can be derived from comparing investment vs. benefits - providing tangible proof that the solutions can deliver value, and providing urgency so customers can rank priorities based on returns.

During the selection phase of the buying cycle it is important for the seller that the customer does not tactically select a lower priced solution after all the strategic hard work has been done. We prescribe that the sales team use tools to help quantify total cost of ownership advantages, focusing not just on price up-front, but the total cost savings the solution might deliver over time, and competitive feature advantages - all quantified in hard dollar terms.

And finally, during the post-implementation / sale phase, that the quantified ROI analysis be used to determine exactly whether value was delivered. Several of our customers have formalized this into post deployment value audits and ROI SLA guarentees, standing behind the pre-sale ROI predictions and assuring that true value is acheived.

As we progress in the era of Frugalnomics, we believe that combining the concepts of Stephen J. Bistritz as the art, with Value Selling science, is an absolute requirement for selling success.

The original article by Dr. Bistritz on selling to the C-Suite can be found at:

Wednesday, April 14, 2010

BI Vendors not doing enough to prove ROI

At Gartner's Business Intelligence Summit 2010, IT Executives indicate that they're struggling to prove the ROI of BI to the business. BI managers are finding it difficult to quantify bottom-line impact, and as a result, are not able to get business leaders on board to support additional analytics and reporting projects.

As our annual surveys with IDC continue to indicate, over 90% of projects, especially those with high investment requirements such as BI, require financial justification and proof of bottom-line impact. However, 65% of buyers indicate they don't have the tools and research / methods to justify the solutions on their own.

The research indicates that over 60% of these buyers turn to vendors to prove the value.

As buyers struggle to justify investments to frugal executives, solution providers need to proactively step forward and deliver return on investment proof for BI. Value justification has to occur project by project and business unit by business unit.

As Gartner BI Summit participants indicate, the current failure to deliver value proof-points is already having a significant impact on buyer satisfaction, upsell / cross sell opportunities and lack of planned adoption.

As a wave of innovative new BI solutions are becoming available, the ability to excite frugal business leaders, and keep existing customers loyal is going to rely on solid value quantification by solution BI providers.

An article about the Gartner BI Summit can be found at:,289142,sid182_gci1509885,00.html?track=NL-964&ad=760587&asrc=EM_NLN_11332209&uid=748591

2010 Tech spending to increase > 5%

Two IT analyst firms speak of better times to come for IT solution providers. Both Forrester Research and Gartner independently released IT spending forecasts for the remainder of 2010, and both have adjusted their targets higher for the year.

Gartner has accelerated its forecasts for 2010 spending increases from 3% to more than 5.3%, with worldwide IT spending is expected to reach $3.4 trillion in 2010, (growing from $3.2 trillion in 2009).

Forrester has the more aggressive predictions of annual US IT spending growth of 8.4%, with the revision driven by higher than expected investments in communications hardware and software such as networking and Unified Communications.

We believe that Forresters predictions are correct and that the more conservative analysts will continue to revise their targets upwards. Although current budgets remained constrained, discretionary budgets will be put into play later in the year as organizations realize revenue growth and begin investing more to upgrade and migrate aging infrastructure investments that were put off, and meet growth, new business / market demands.

Solution providers must now begin to plan for a ramp up in customer discretionary budgets, and proactively propose projects, even if current budgets are "locked down" and priorities already set. Sales professionals and partners who deliver Executive and Value Assessments, helping diagnose issues that the customer might not even know they have, getting a roadmap of potential solutions in place, and driving urgency with quantified potential savings and benefits, will be the winners.

ShoreTel guarentees TCO savings for UC solutions

Knowing how important value is for today's economic buyer, ShoreTel has just announced an innovative program for its customers - a Total Cost of Ownership (TCO) savings guarentee.

ShoreTel, with a low up-front cost and less complex solution than the competition has demonstrated a clear cost advantage versus competitors such as Cisco, Avaya, Nortel and Mitel. With independent research to back up these claims, and an Alinean 3rd party developed / powered TCO / ROI Analysis tool to quantify the unique TCO savings quickly for each customer, ShoreTel will guarantee the lowest TCO, so you know that when you purchase and deploy a ShoreTel UC solution, that it will deliver higher net savings than the competition.

A complete TCO analysis enables organizations to compare competing solutions on an equal footing—like for like—and align those solutions with business needs. These comparisons are done head to head versus legacy TDM solutions, and versus any number of UC competitive offerings.

For ShoreTel to prove lower cost of ownership, a "chart of accounts" is used to compare costs over 3 to 5 years, for each investment option comparing:
> Capital Costs - switches, phones, software, networking and systems management tools
> Operational Start-up Costs - implementation labor and services, and training
> Ongoing telephony system cost - support contracts, change management and systems management
> Ongoing network costs - circuit / bandwidth costs, long distance charges, power and cooling costs, and carbon footprint

We believe that although only a handful of companies are offering financial service level agreements (SLAs) such as TCO / ROI guarentees, as buyers focus on bottom-line impact more and more, solution providers will need to share in the return on investment risks with the buyer more and more. Solution providers such as ShoreTel who enable their direct sales force and partners to guarentee savings and competitive advantage will clearly outperform those that are slow to adopt value selling and financial SLAs.

For more information on the Shoretel TCO guarentee program visit:

Friday, April 09, 2010

HP legacy upgrade campaign features Alinean TCO sales tools

The market for enterprise servers is fierce, and with IT savings goals top of mind and the recent purchase of SUN by Oracle, many organizations are proactively developing strategies to modernization / consolidate legacy solutions.

In a recent press announcement, HP announced that the number of global companies replacing Sun and IBM systems with more flexible HP solutions offering a lower total cost of ownership (TCO) is rising. Alinean tools are consistently used by HP sales and partners to prove these TCO savings and drive competitive migrations / wins. To help prospects uncover opportunities and increase urgency for legacy consolidation / modernization, HP relies on the Alinean TCO sales tools to calculate prospect's current total cost of ownership illustrating the need for modernization / consolidation, and provide quantifiable savings analysis and third party proof / evidence of savings with HP solutions.

Using the Alinean TCO tool and specific customer consolidation opportunities over a three-year span, HP-UX 11i v3 running on HP Integrity BL870c was shown to deliver a 23 percent lower TCO than IBM AIX 6.1 running on IBM BladeCenter JS23.(1)

HP illustrated the value of consolidation / legacy upgrades with three examples of companies that have migrated and acheived significant savings and business value:

1) Kumho Tires, a leading South Korean tire manufacturer, needed to update its legacy IBM mainframe to support its growing business. “The existing mainframe-based system was inadequate to support the challenges faced in a rapidly changing business environment,” said Seung-gook Cho, department head, Kumho Tires. “We examined and benchmarked major server vendors’ products and selected the HP Integrity Superdome and HP-UX.”

2) Bernalillo County, the most populous county in New Mexico, sought to substitute its mainframe environment with an infrastructure that could improve the reliability of its applications, maximize efficiencies and reduce costs. “When Bernalillo County needed to provide additional services to residents, we turned to HP to provide an infrastructure that could help us cut costs and implement applications faster,” said Paul Roybal, chief information officer, Bernalillo County. “By deploying Integrity server blades with HP-UX, we decreased the number of physical servers, improved overall performance as well as reduced power and cooling requirements by 40 percent.”

3) VTB Bank, one of Russia’s largest banks, chose an HP-UX solution to upgrade its Sun servers running Solaris. The company migrated to HP Integrity Superdome and HP Integrity blade servers running HP-UX and was able to improve efficiency and facilitate service delivery. “HP Integrity Superdome is a highly scalable platform for mission-critical workloads – a platform that helps us maintain a common Oracle database, while consolidating the core banking systems of our branches,” said Dmitry Nazipov, chief information officer, VTB Bank.

Migration tools and support by HP are touted to make the TCO savings acheivable with lower transition costs, providing significant ROI and payback. For each customer, HP uses the Alinean TCO analysis tools to validate and present these projections to frugal buyers.

With the incredible advancement in technologies year over year, modernization and consolidation can reap rewards for many legacy platforms. Migrating to HP to acheive these savings is one of many possible scenarios, and using our analysis tools, substantial savings could also be acheived from SUN and IBM solutions. In fact, both of these organizations also use Alinean tools to help validate savings and present business cases for modernization / consolidation. So why is HP stating superior migration results?

Frugal buyers need a reason to consider any project when budgets are so tight, and modernization / consolidation requires a substantial committment and investment.
We feel that part of HP's success is the result of a higher committment to proactively and more consistently diagnose customer opportunities and prove savings, return on investment and payback with Alinean value-based sales enablement tools.

The entire announcement can be viewed at:

(1) “The business value of HP-UX 11i v3,” Alinean Inc., November 2009.