Saturday, August 31, 2013

How to Unseat an Incumbent?

I was recently asked by one of our technology services customers how best to help their sales teams
unseat an incumbent solution provider, and if it could be done proactively and provocatively.

According to a recent study of tech buyers, the number one reason for changing vendors was not that the new provider had a vastly superior technology, or delivered thought leadership about a changing business landscape, but most significantly about the challenger providing a solid business case for change.

This business case quantifies how the new vendor could deliver superior business benefits (improved productivity and processes, reduced risks and revenue gains) while at the same time lowering total cost of ownership (TCO - lower IT capital and operating costs) compared to the current vendor.

According to research by UBM Tech, the top factors that led to a change in vendors included:
  • 42% - Case for Change, where the new vendor demonstrated a business case for change
  • 41% - Unrealized ROI, where the existing vendor did not deliver the knowledge or training to realize the value in the solution
  • 38% - Superior Knowledge, where the new vendor demonstrated a better understanding of the customer's company and industry
  • 27% - Thought Leadership - where market research demonstrated a change in business landscape.

The Bottom Line
If you are the incumbent, in order to maintain the account loyalty you need to assure that your customer is achieving the expected value, as 41% indicated they switched not because of anything the challenger did, but because the incumbent failed to prove realized ROI.

If you are the challenger, in almost half the cases where a change occurred it was the business case that made the difference. Enabling your competitive marketing to focus on the financials can help frame the choices in a new way for your prospect. While sales reps and consultants can be armed with tools to deliver business case conversation and quantify the better business value and lower TCO of your solutions.

Tuesday, August 27, 2013

VMware Cloud Compass Tool (powered by Alinean)

It can be a challenge knowing which cloud solution is best for your particular workloads and business requirements: a private cloud, public cloud or hybrid solution?

To help you determine the best option, VMware worked with the business value experts at Alinean to create the VMware Cloud Compass Tool.

The VMware Cloud Compass Tool factors your unique workloads, budget goals, risk tolerance and desired business outcomes to provide a customized 3rd party recommendation as to the best cloud option for your unique requirements. The tool factors the most important elements to help guide your cloud decision, all in less than 10 minutes to complete.

Starting with a few simple questions about your company and workload requirements, the tool then provides:
  • A comparison of Total Cost of Ownership (TCO) for various compute options, differentiating the costs for on-premise with public and private cloud options, tallying differences in CapEx, OpEx and business benefits.
  • An assessment of your Risk Tolerance, analyzing the importance of Availability, Governance and Compliance, Security and Privacy and Business Relationship Management in your selection of the right cloud platform.
  • An assessment of Results Expectations, determining how important Accessibility, Business Responsiveness, Scalability and Cost & Accounting is to the cloud decision.
Based on the workloads, TCO, risk and results assessments the tool delivers an online summary of the recommendation results; with an overview of the right cloud recommendation based on your unique factors and requirements.

For a more detailed view, a complimentary customized white paper PDF can be downloaded and shared with your team, personalized for your specific workloads, budget, risk tolerance, desired business outcomes, and most importantly, cloud recommendations.

Watch this quick video with VMware Accelerate Advisory Services Benchmark Practice lead Craig Stanley to learn more, and you can read Craig's blog, The 3 Rules for Making Confident IT Decisions, for a deep dive on VMware's risk analysis methodology.

Access the VMware Cloud Compass to determine the best cloud solution for your workload and business requirements.

Friday, August 23, 2013

OpenShift Enterprise by Red Hat Benefits Estimator (powered by Alinean)

Here at Alinean, we help some of the best technology solution providers convey the business benefits of their solutions to their customers.  In doing so, we see many different types of technologies and solutions and the corresponding business benefits that those provide.

On occasion, we are excited to identify a technology that really has a compelling value proposition and provides profound benefits to enterprise IT.  Based on our research, we see OpenShift Enterprise by Red Hat as one of those straightforward technologies that can make a big impact on a quite reasonable investment.

In today’s “do more with less” economy you likely struggle to deliver enterprise applications as quickly as required, while at the same time under constant pressure to reduce development costs.

A typical application development project today takes 4 months to deliver and costs between $100,000 and $150,000.[1]  Your time frames and costs might be higher or lower depending on your business, but if you are like most, there are opportunities to reduce waste, streamline processes and optimize resource utilization:
  • How much time and effort do your application developers waste in setting up application development, testing and hosting environments, when they could be coding?
  • What IT resources are consumed with provisioning and systems management of the application platform stack?
  • How much do you spend standing-up and evolving the production, development and test environments?
What if you could?
  • Accelerate app delivery by 45%
  • Lower system configuration time and effort by 85%
  • Reduce improve resource utilization by 25%
  • Reduce application development costs by 10%
  • Reduce IT infrastructure needs by 25%
These benefits are available, leveraging OpenShift Enterprise's automation technologies to standardize and streamline developer workflows. OpenShift Enterprise is a platform as a service (PaaS) designed to provide an on-demand, elastic, scalable, and fully configured application development, testing, and hosting environment for application developers so they can focus on coding those new application services.

With a balance between reducing costs and accelerating delivery, a 20% savings in legacy development costs and accelerated delivery can be achieved. [2]

Can you achieve similar benefits? Since each business’s development requirements are so different, it can be difficult interpreting what these benefits can mean for your own unique challenges and environment.

Red Hat realized this challenge, and worked with the IT value experts at Alinean to create the OpenShift Enterprise Benefits Estimator, an online tool enabling teams to better understand their own application development and delivery challenges, and calculate the potential benefits of using PaaS to optimize development resources and streamline application delivery.

Take the challenge to quantify your current application development opportunities and determine if OpenShift Enterprise could help:

[1] Aggregated average from the OpenShift Enterprise by Red Hat Benefits Estimator
[2] Estimated benefits achievable by Alinean, studying case studies of Red Hat customers, and from customer confirmed estimates using the OpenShift Enterprise by Red Hat Benefits Estimator

Tuesday, August 13, 2013

Canon Output Management Print Services ROI Calculator (powered by Alinean)

Recent research shows clearly that decision-makers pay little attention to operating costs despite claiming price and value for money is key in the purchasing process.

Nearly all decision-makers (87%) say they are satisfied with the way they currently measure spending on print BUT only 49% actually knew the cost of a printed page.  Even more concerning was the fact that 1 in 3 do not use any kind of measure to determine whether investing in new printers represents good value.

The Canon Output Management Print Services Calculator (powered by Alinean) demonstrates the benefits consolidating, optimizing, and managing your printed output.

Gartner says Buyers Have Changed. IT Sales and Marketing Strategies Are Lagging

According to Charles Darwin, “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.” If this is the case, Gartner’s latest research indicates that many IT Sales and Marketing leaders may end up on the “endangered species” list, unless some serious realizations and changes occur sooner versus later.

According to a new research report, IT buyers have dramatically changed. Gartner indicates that” Newly empowered and informed buyers are taking control of the sales cycle, which should be cause for concern for many sales leaders.”

Tiffani Bova, vice president and distinguished analyst at Gartner indicates that IT sales and marketing has struggled to meet the change, "As technology has continued its unprecedented advance in recent years, the sales models used by providers to bring technology products to market have failed to keep up."

Although most of the sales and marketing executives may recognize the issue, change will not be easy. “Providers have long been accustomed to defining not only what customers will buy (the product), but also how they will buy it (the sales model).”

Looking at past strategies, products were pushed to a large, loosely defined customer segment. Their advice now is to redirect efforts towards connecting customers to their desired offering through their desired purchase experience.

It is good to see Gartner finally illuminating an issue that has been fourteen years in the making, starting with the tech bubble burst and reinforced substantially with the Great Recession. The Teutonic shift that is occurring in the IT marketplace is based on a condition we have coined Frugalnomics, where buyers have substantially and fundamentally changed:

More Empowered – buyers are clearly more informed, leveraging the Internet and social media to research potential solutions, you and your competitors extensively. As a result, CEB and others report that sales reps are being invited later and later into the decision process, when some 2/3rds of the buyer’s journey is already complete. This at a time when Forrester reports the spoils going to those who can engage earlier, with 76% of all deals going to those that can help the buyer establish the need and define the buying agenda, while only 24% of deals went to those winning the “bake-off”.

More Stakeholders – IDC reports that there are now 40% more decision makers involved in each IT purchase decision compared to just three years ago, growing on average from 5 to 7 per deal. With ready availability to cloud solutions and more consumer-like IT expectations, there are more business stakeholders involved in each decision – including the heavy hand of CFOs, Finance and Procurement. And this trend is accelerating, with Gartner reporting at last year’s that a whopping 90% of IT decisions will be controlled not by IT, but by the business groups before the end of this decade.

More Frugal – In the new “Do More With Less” economy, most buyers have less budget, little resources and a low tolerance for risk. As a result, most are forced to deal with “business as usual”, and cautiously approach any new proposals. In order to even consider your offering, these frugal buyers need to first know that the cost of “do nothing” is significant, convincing them that staying with business as usual is untenable, that the investment requirements are reasonable and low risk, and that there is a significant and fast payback. Almost 60% of all deals are now stalled, and of those that move towards close, 95% of these deals now require financial justification.

As a result of “Frugalnomics”, Gartner implores sales and marketing to rethink their entire go-to-market strategy, whereby "the existing ways of selling, based on specific segments, high-touch, often face-to-face sales, with a select few channels and heavy investments in lead generation marketing, are beginning to be less effective as people's buying behavior changes, and the expectations of IT shift".  According to Ms. Bova, "The key to moving forward is to take a customer-centered approach and adopt sales models that support customers' new buying processes, rather than fight against them."

Here are our three step recommendations to help you address the issue and support this new buying process:

1)  Facilitate buyer’s decisions – with buyers so much more in control of the buying process, instead of trying to wrest control, you need to empower buyers even more. Investing in more provocative, relevant content is essential to helping the buyer recognize their issues and facilitate their decision-making process, as well as enabling sales reps to engage earlier and deliver insights to make them a valuable part of the process, and to help stalled deals move forward.

2)  Value in the “eye of the beholder “– different stakeholders perceive value in different ways. What is valuable to an operations person, is not so important to a CFO, who certainly has different pain points, solution requirements and perceived value than an IT manager. With so many more stakeholders in the decision process, particularly business executives, it is essential to communicate your value messaging in relevant terms to each distinct stakeholder in the decision making process.

3)  Financial Justification – with less appetite for risk and more business and finance stakeholders involved in the decision making process, it should come as no surprise that financial justification is a requirement. Interactive tools can be leveraged by prospects to diagnose issues, quantify the cost of “do nothing” and calculate potential benefits from your solutions. More advanced tools can be used to empower sales-led workshops, collaborating with prospects in the financial justification process and delivering CFO ready business cases.

It is important to remember that financial justification early in the engagement is different than the justification the buyer needs in later stages. Here is how financial justification should unfold to help facilitate the buyer's decision making process:

Quantify the Pain - Early, the project itself needs to be justified, answering the question “Why Change?”, and proving that:
  • The issue that you can address is a costly one for the buyer
  • The issue should be a priority amongst all the other opportunities they can address
Justify the Gain – In the middle of the decision making process, the financial justification moves to your proposal, proving that your solution is “investment worthy” and should be a priority (Why Now?):
  • Quantifying the proposed savings, productivity and process improvements, risk reduction and revenue benefits.
  • Comparing the proposed investment versus the benefits, including a tally of key financial measures especially: return on investment (ROI), payback, and net present value (NPV) savings.
Prove You’re Not the Same - And finally, you need to quantify the competitive advantages of your solution versus alternatives, answering “Why You?”:
  • Tally your lower total cost of ownership (TCO) compared to alternative solutions
  • Prove the incremental value you can deliver versus competitive offerings.

The Bottom-Line

Gartner research confirms that IT buyers have significantly changed, a condition we call “Frugalnomics”, forcing IT sales and marketing strategies to change in order to remain effective and competitive.

We recommend that you leverage three steps to help address this challenge today:
  1. Providing provocative content to help buyers overcome “do nothing” and facilitate the decision making process
  2. Align messaging and solutions with the pains and “point of value” of different stakeholders
  3. Deliver financial justification to answer “Why Change?”, “Why Now?” and “Why You?”.
As Gartner concludes, "The greatest innovation challenge for providers today may be in finding the means to reinvent the sales organization and go-to-market model to meet new market demands, while at the same time continuing to protect and defend existing customers and deliver net new revenue."

Gartner Says Go-to-Market Sales Models May Be a Bigger Competitive Advantage Than the Product Being Sold - Gartner Special Report Examines the Future for IT Sales Strategies