Why organisations spend on IT

Unless investments in IT are providing business value, they will not be justified. Understanding this is vital for salespeople - unless wasting time chasing unqualified opportunities is the goal. 

Why do organisations spend money on IT?

 

 

 

Spend on IT will link to one or more of the four “Business Imperatives”. Initiatives which support one or more of these provide increased business VALUE to the organisation. VALUE is defined as activity or investment which directly supports the goals of the organisation.

Strategic Value is gained from two Business Imperatives - to increase revenue and to reduce costs.

Reduce Costs

The costs associated with IT include not only the capital purchase of new equipment, but also the ongoing costs through its lifetime. The operational costs can be up to three or four times the purchase cost. Total Cost of Ownership, or TCO, is a term often used to describe this. TCO is becoming a little dated as a term because IT ownership is in fact optional. Enabled primarily by virtualisation technologies, software and hardware are becoming decoupled and increased mobility means organisations do not need to own infrastructure - they can simply pay for "services" to be provided - for some or all of their needs. Total Cost of Operations may be a more fitting meaning for TCO.

Increase Revenue

Commercial organisations are typically goaled to drive profitability. Simply put, Revenue minus Costs equals Profit. The way to achieve this is to provide the best possible levels of service for customers so they buy more products and or services. For public sector organisations, the focus on service provision is in fact the primary goal. Better service provision should drive improved funding which is used to cover the organisation's costs. The end result is similar to commercial organisations - but the focus is on service provision rather than profit.

Organisations also need to drive Operational Value. The two Business Imperatives here are to increase agility and to reduce risk.

Increase Agility

Organisations need to respond ever more quickly to market demands. New applications must be rolled out in shorter time frames, test and development cycles must be slashed and the costs associated with new projects need to be curbed. In summary, as IT evolves, it must become more agile - in line with the business itself.

Reduce Risk

As businesses grow, become more globalised with 24/7 operations and become more regulated - whether by internal or industry governance - so the pressures to avoid business risk mounts. With IT so central to business operations, so Risk Management has become a critical operational imperative. Legal compliance, information management, business continuity, backup and disaster recovery are all initiatives which fall under this category and provide necessary value to the organisation.

Unless an IT purchase supports at least one of the Business Imperatives and VALUE is increased, it will not be justified. Conversely, if you can demonstrate how an investment in a particular technology supports one or more business imperatives, this will strengthen your case to get budget approved.

 

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What is selling anyway?

Have you ever been in a conversation and at the end thought "I don't think she listened to a word I said"? Or conversely "I don't have a clue what he was talking about?" Especially over the phone, it can be difficult sometimes to get a point across. It can be even harder to gain real commitment from someone you may not have spoken to before or at least have not met in person. And yet, that is the purpose of you calling your customers/ prospects.

It may seem like quite an achievement just to get through to your customer. To have an engaged conversation can be harder again and your well written call plan will certainly help with this. But all this can be for nothing if you and the conversation are not remembered, if you have not had a personal influence on your customer.

Why is personal influence so important? Well it boils down to the fundamental reality of what selling is.

I often tell delegates in my training sessions that they cannot sell anything. I am not trying to be disparaging when I say this, it is not a personal slight on their abilities. It is a rather controversial statement to be making in a room of sales people and does tend to get the conversation started. Some will be intrigued, some will disagree and someone will say - "What do you mean by saying that?

"Well", I continue, "who in here reckons they can sell?" One way or another, someone volunteers (or is volunteered). "OK", I challenge, "sell me something". This tends to flummox the volunteer. If she is smart, she will say "well what do you want?" And that is my point. You can only sell something to someone who wants it, who sees some value to be had and is willing to part with money in exchange for it. You cannot sell unless someone wishes to buy. Of course, there are some unscrupulous  people out there who find ways to cajole, manipulate or con their "customers" out of money by convincing them that they want something - but this is not legitimate selling.

There is no sale without a willingness to buy. So selling is actually the process of communicating with people, ideally in a targeted way, with the purpose of firstly discovering a willingness to buy a product or service that you can fulfil. Then, it is personally influencing that person (or perhaps multiple decision makers) to buy from you.

This final process is personal because the buyer is either buying for himself or putting his personal reputation on the line if buying on behalf of his company. Your ability to influence the purchasing decision will be governed by a number of factors such as price, product fit for purpose, your compliance with any purchasing rules etc. But the old adage, people buy from people, is as true today as it ever was because ultimately, a person needs to raise that purchase order and we are all driven to do what we perceive to be right by ourselves, our employer and by our peers (probably in that order).

In order for you to build influence with your customers, you need to spend time with them. This is partly so you can build rapport and trust, and partly so you can get to understand their personal drivers. Doing "right by ourselves, employer and peers" is subjectively and personally defined. So unless you get to know the person, your ability to influence will be dramatically reduced. Win over the person, and your ability to win the sale will skyrocket.

IT's Cloudy where the Sun don't shine

Pure genius. I did not understand it at the time but what foresight. The phrase - "the network is the computer". It was coined in 1984 by a company which was the yin to Microsoft's PC yan - Sun Microsystems.

Those of us who have been in IT for while know that things go in circles. Like the seasons and the weather. But now - there is a fundamental shift taking place. Should IT be centralised like in the mainframe era - or should it be de-centralised with all the power given to users? It's an outdated question. Both are now demanded. As networks, computing and storage have become independent through virtualisation - so IT has become service centric. As a bi-product, it has become impossible to draw as well - so now we just refer to "the Cloud" (because this is how engineers got around the drawing limitation).

Who could have predicted the end of Sun? mmm yes, an Oracle. What about the end of the PC? It's been hailed before but now there are signs that the PC is in its Autumn years. The range of client devices being demanded in the corporate world is being driven by the liberating effects of Cloud computing and virtualisation. Why can't I bring my own device to work? And why can't it be an Apple 'cos its cool? IT - just make my apps work (even the Microsoft ones).

For an explanation of Cloud and other things - visit www.2decipher.com

Seven Insights about Revenue Acceleration: A Sales 2.0 Conference Recap | Sales 2.0 Conference

Seven Insights about Revenue Acceleration: A Sales 2.0 Conference Recap | Sales 2.0 Conference

Consultative Selling vs Tin Shifting

If you could sustainably shift enough tin – you could earn a very nice living thank-you. So why is the term “Tin Shifter” so sneered at?

In the good old days of IT Sales – before say year 2000, Tin Shifting is something that many resellers were good at and indeed made a lot of money doing . Some would say too much money. Money earned due to being in the right place at the right time and being able to transact orders perhaps generated some jealousy in some quarters. The more significant reason that Tin Shifting passed its sell by date is that the “easy money” attracted competition – lots of it. So much so that Tin Shifting  became harder to achieve without giving margin away to win the business.

The obvious answer was to move away from selling tin (IT Hardware). Selling Services became the goal of many organisations who enthusiastically re-invented themselves as service providers. Many got this completely wrong. They discovered that their customer base could not consume enough services and that despite popular belief, the margins to be made were not as lucrative as they first thought. This was due to the fact that service delivery carries real costs and the world of service delivery is susceptible to market forces and competition just the same as the world of hardware.

The fact is customers need tin and services (not to mention software). So how can IT suppliers “shift” all of these things, win over the competition and make some money in the process? The answer is to focus on the customer – not on the product – whether this is tin, services or otherwise.

Focus on the customer, help him figure out his needs and explore solutions. Build strong relationships and increase your influence. Use your relationships to help determine the right technologies and services for your customer – and influence them to buy  from you.  This is the essence of Consultative Selling and if you do it right, you can shift some tin in the process and a lot more besides.

Before you start selling anything, you have got to get it. Start here www.2decipher.com

IT Sales – bit by bit

It’s a lot like the old adage about eating an elephant (one bite at a time). Selling is very similar in that it takes a number of steps to reach the end goal.

At each stage of the sales process you need to be clear about what you are trying to achieve. Invariably – the goal is to move the deal forwards – closing only comes at the end. So don’t get hung up about closing (although when you get there – don’t forget to ask for the PO!).

For example – if you are prospecting for new customers – offering products the first chance you get may be counter-productive. They have got to get to know you a little first. People buy from people – not from strangers.

As you build relationships, you also need to build trust. One good way of doing this is to ask questions and show that you want to know more about your customer and his situation. In IT Sales – the customer’s situation will include business and technical considerations – so build some knowledge and confidence in both these areas. You do not need to be a business or technical expert – but do need to hold credible conversations within these environments.

One great side effect of being clear about the next step in the sales process – is that you can track success even before you sell anything. Gaining commitment for a follow up call – that is success. Discovering an upcoming project – that is success. Finding new contacts – that is success. Once in the habit of success – great sales results are sure to follow.

Sales Superstardom – it’s all in the swing

You may think that your role in IT Sales is to sell more. This is not the case. It may well be your goal – but not your role. Let me explain.

Perhaps an analogy will help. It’s like in sport – let’s say golf. When you tee off on a long hole – you may think your role is to hit the ball hard so you can achieve the long distance. Wrong. If you focus on hitting the ball hard – you are likely to miss hit it and perhaps with embarrassing results. The key with golf – or indeed most sports – is to focus on using the right technique. With golf - it’s all in the swing.

So in sales, with a goal to sell more, where should you focus to maximise your results?

A good sales swing comes from focusing on buyers – not on selling products. No buyer means no sale. Or put another way – you cannot sell anything – unless you are engaged with a buyer who wishes to buy from you. It sounds obvious – but the implications are enormous. Your role is not to sell stuff – it is to firstly find a buyer – qualify that he has a real need and that you have products or services which address the need – then influence him to spend his money with you. If you succeed in this with enough customers – you will achieve your sales goals.

To improve your sales technique, think about the steps a customer goes through to make a purchase and figure out how to help him want to buy from you. Note that customers will follow this process with or without you. Your role is to make it with you.

We can break down the process as follows:

Need

Every purchase begins with a need. In order to increase your pipeline – you must identify more customers with a qualified need. The only way to do this is to talk to many customers. It is still a numbers game in sales! The key is to ask open questions about their situation and challenges they face. In the process, you will uncover needs which your products and services may be able to address.

Specify

The customer will be faced with many choices both in terms of technology and vendors to work with. Your role here is to help advise him. Get closer to him and build your relationships and trust. By introducing technical expertise and helping your customer narrow his options by making informed choices – you can increase your influence.

Choose

By the time your customer comes to choosing – technologies and supplier – the influence you have built will greatly increase your chances of winning the deal.

Buy

At this stage, the deal is hopefully yours . You will need to ensure everything is lined up in your favour – which includes the customers trust that you can deliver, the right products and services in place and of course – the right price. Don’t forget to ask for the PO!

There are many techniques and skills required to be a sales superstar – but unless you keep your customer and his needs at the centre of what you do – you’ll find your pipe-line turns into a pipe-dream.