A New ERA in ERP - Part 3

[Continuation]

I do not, for one minute, doubt that the vast majority of technology vendors actually do offer products and services that can be “solutions” for a good many SMBs. If I did not believe this with vigor, I would not be involved in the industry. But saying that a store offers shoes does not automatically imply that they have the correct “solution” for your particular foot. Your foot may be too wide or too narrow to fit comfortably in the shoes they offer. You may need a shoe for hiking in the woods and they sell only dress shoes. Or, the store may have the color and style you find suitable, but they don’t have the 10-1/2 size you foot requires.

Unfortunately, most – but not all – of the salespersons that I have encountered in this industry over the last quarter century are salespersons first, even though they may be engaged in a process that they refer to as “solution selling” or “consultative sales.” All too frequently they do just enough to “consulting” to find a place to get their foot in the door to “sell.”

The problem – more likely than not – is not the salesperson. The problem is almost certainly to be found in the policies and compensation plans under which the salesperson is engaged with their employer and the training that they have received. Even the bulk of “solution selling” and “consultative selling” training courses are only thinly disguised presentations of ways to get more salespeople in the door at clients’ and prospects’ offices and not, in fact, actually focused on the “solution” or “consulting” part of the equation. This is evident by the fact that those giving the training in “solution selling” or “consultative sales” need to know little or nothing about the actual product being sold or how to actually “consult” a business toward achieving more of its goal (read: making more money).

If vendor/VARs are interested in becoming real and practical “solution” sellers, they must also become real and practical “consultants” that understand how to guide management teams in the process of discovering:

1.       What needs to change in order for the system (i.e., the entire enterprise) to improve and make more money

2.       What the change should look like (read: Does the vendor/VAR actually have a product that “looks” like what your management team believes the “solution” should “look” in its working and effectiveness?)

3.       How to effect the change (read: Can the vendor/VAR help in deploying their technology in order to make it effective in the end result?)

On vendors providing low-cost or no-cost solutions

I, personally, find it hard to believe how many vendors today are supplying valuable applications at no-cost or low-cost to huge numbers of users. Everyone knows about Google, which alone provides search-engine capabilities, a blogging site, Google Apps – used for document sharing and collaboration, email services and more. EverNote provides a service that I find absolutely invaluable and allows me to store up to 40MB per month on their servers at no cost to me. EverNote also allows me to use their site for sharing and collaboration. Then there are low-cost applications like CEOexpress.com and eFax that also furnish me with huge benefits for pennies per day.

Jan Hichert is right! People are expecting more and more for less and less out-of-pocket expense. This is a trend that is not likely to end in the near future. The question is: what should vendor/VARs be doing about it?

My recommendation to the industry is that they convert all of their salespeople into genuine whole-hearted consultants – at least insofar as that is possible. (Some, I fear, cannot be converted. They will, perhaps, never be anything but a salesperson through and through.)

Note: Those that cannot be thus converted should remain salespersons, but they should be making three or four face-to-face sales calls per day making “incremental sales” being fed by a sound program of relationship marketing. It is beyond the scope of this article to go into more detail, but if you are interested, see Justin Roff-Marsh’s book entitled Reengineering the Sales Process for more information.

The vendor/VAR’s new staff of through-and-through consultants should be turned loose in a program of incremental transactions. Unlike today’s one-big-gulp approach to sales, allowing a relationship to build over time while gradually increasing the size of the transaction simultaneously builds a solid relationship between the prospect/customer and the vendor, while allowing the vendor/VAR to prove to your management team that a) the vendor/VAR really does have your enterprise’s best interests at heart; b) the vendor/VAR really does know how to help your business improve – i.e., make more money; and c) the vendor/VAR really can be trusted with delivering on its promises.

Allow me to give an example of what such a program might look like:

Step 1: A no-cost one-day “proof of concept” engagement about how the vendor/VAR’s approach can help you unlock valuable knowledge already present in your organization in a way the leads to improvements which, in turn, help you make more money.

Step 2: A $795 one-day engagement to plan the execution steps on just one of the ideas resulting from the “proof of concept” engagement (Step 1).

Step 3: A engagement called the “Next Steps” program to help formulate step-by-step plans to leverage additional concepts stemming from Steps 1 and 2.

Step 4: A one-year engagement to help the client develop and execute on a POOGI (Process Of On-Going Improvement) program.

Step 5: Sale of an updated or upgraded ERP system or tactical extensible technologies that support the POOGI or “Next Steps” initiatives

Note: The reference to “Insert Value Price” has to do with value-price, not by-the-hour consulting. This means that, if you, as a client, are going to benefit to the tune of say $100,000 in Throughput from a particular initiative, you might be willing to pay on a plan such as: $30,000 up front, plus n% of the increase in Throughput over the next 12 months.

Arrangements and sales approaches such as these are a win-win for the parties involved. You and your management team are more likely to reap benefits from real – not hyped or hypothetical “solutions” – and the vendor/VAR can make more money because you are making more money.  That sounds fair, does it not?

Summary

We are not entering a new ERA in ERP. We are – for better or worse – already into the new era. The question is how will vendors/VARs and you, as the buyer, respond in this new age. By keeping the roles of each party clear and by you and your management team taking full responsibility for sound and rationally calculated ROI for each new IT investment, everyone wins.

Plus, if vendor/VARs become really and truly solution-oriented, this team of people that work day after day with SMBs and have considerable experience can learn to bring no-cost and low-cost solutions to your doorstep by helping you unlock what you already know – but frequently do not know that you know. This, too, is a win-win for all involved.

(c)2010 Richard D. Cushing