Saturday, May 5, 2012

3 Major Steps In The Solution Business

3 Major Steps In The Solution Business
Yes, it’s only 3 Major Steps. Enterprises gradually shift their focus to solutions or moves away from products to solutions especially when those products get commoditized or the product margins are declining, as you know. The major shift actually happens in the process we develop, go to market and convince the target audiences. The go-to-market strategy thus becomes pivotal in conceptualizing and executing the whole solution piece. There are multiple steps in the go-to-market strategy. However, we identified 3 major steps, without which one cannot move from product to solution. They are as follows:
1.   Step # 1: Understand Customer Pain Points and Improvement Areas. Every organization has some pain points. The examples could be “high utility cost”, “weak business opportunity management”, “me-too products”, “rising operational costs”, “lesser-than-expected revenue growth”, “declining or flat profitability”, “flat market participation” and the likes.  Your current product may be able to partially address one or couple of customer pain points, but not fully. There are some companies who may not have very salient pain points, but have identified some improvement areas which could take the customer organization ahead of competition. These (pain points &/or improvement areas) could be the potential opportunities to develop a suitable solution putting together the missing pieces, if that strategically fits to the enterprise’s vision, mission & values.

2.  Step # 2: Customer Pain-to-Solution Process. This process starts with developing the solution and ends with delivering it. Developing a solution starts with thorough understanding of the customer pain points. A gap analysis needs to be done to understand the missing pieces of the puzzle. Once you identify the missing pieces, you need to evaluate whether we will develop them in-house or we intend to out-source them. A cost-benefit analysis will possibly help us making the right decision (whatever makes sense for your enterprise). Put them together. Run a proof-of-concept and finalize the solution. Parallelly, we need to figure out how we take this solution to the market. Environment scan is needed to assess how big could be the market, how intense those pain points are, will customer really be ready to pay to get rid of such problem/s, who else are in this or very close to this, what are their offerings, how they position themselves, how they go to market, what are their solution limitations, can we plug them (if needed) in our solution, what could be our differentiators, what value/s customer will get out of those differentiators etc. etc.

3.   Step # 3:  Be a Trusted Adviser. This is a very sensitive step, involving customer-facing interactions. One of the things that successful solution selling enterprises do is to elevate the conversation level to “C” level of customer organization. The dialogue needs to open with customer’s concerns in mind and how can you solve at least one or some of their concerns or challenges. In a customer organization a department or functional head may not be able to support, considering his / her limited domain of control. However, for a cross-functional solution, the “C” level person can quickly see the value of the solution and can help getting a decision made. Moreover, the proposed solution will have greater scope & scale at the enterprise level rather than at functional or departmental level. That’s the reason why elevation of conversation is a must-do approach. During the discussion you need to have adequate situational fluency. Ideally, there should not be any vacuum of voice, especially when you are suggesting solutions which appropriately address their pain points.  The customer organization should see you as their trusted adviser rather than a just a sales person. When you solve somebody’s problem/s he tends to accept you more as an adviser rather than anything else, because, you are trying to convert their pain points to comfort points.

This is very different from pushing product. Because, if you look at it clinically, product is an “inside out” approach, while solution is an “outside in” one. Finally, a solution configurator needs to be designed for the customers to play with it inputting their data (related to their pain points) to get a configured solution on-line real time. It’s customized!! Wow!!
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Acknowledgement for Solution Selling: http://www.spisales.com/solution_selling.aspx

You can follow me on twitter: @samikar 
You may visit the blog post on "Business Intelligence": http://consult2win.blogspot.com/   

Saturday, February 5, 2011

Product Portfolio Management (PPM)

      PPM is generally governed by corporate-level strategy. One of the popular way of representing PPM is by way of strategic buckets. Meaning, there can be 4 to 5 strategic buckets where the organization will focus when it comes to putting efforts and R&D $. Organizational positioning and market penetration are very important, while the IRR (Internal Rate of Return) is important from financial viewpoint. If we consider 4 strategic buckets. They could be NTE, NTS, MI & IC. PPM helps us to map our vision & resources. If the vision hinges on high brand recall, profitability & market penetration, then, resources have to be focused mostly around NTE & NTS. Possibly around 60% of the resources & investments may revolve around NTE / NTS. If the organization is not that ambitious or does not have the deep R&D core competency, it may as well focus more on MI/IC. Some investments could be there for NTS.

   



The diagram here would help us understand the strategic buckets distinctively to map the revenue expectation and R&D investment % for an organization of say US$ 100 billion sales. This is just an example and the numbers need to get aligned to the organizational vision / goal and resources / competencies. One can also map the expected profitability which will be higher for NTE, followed by NTS, MI & IC in that order.  For deeper understanding of each of these buckets, please wait till next week when we will blog-post NTE to start with.

This is just one-dimensional view of PPM. Let’s bring another dimension. Strictly speaking we may not be able to call it PPM anymore; we may call it SPM. While PM continues to mean the same, “S” (Solution) replaces the first “P” (Product). Since “S” will be covered in broader perspective in my future blog-post, I will not talk much about solution here (
http://sami-kar.blogspot.com/2012/05/3-major-steps-in-solution-business.html). The only flavor I would like to bring here is the strategic fit. This elevates the products to a higher level platform, which will enable customers to derive much higher value. In other words making “2 + 2 > 5”. This strategic fit can be viewed, as an example, in Apple’s iTune, GoogleEarth, and many more. If iPod is an NTE product, iTune completes the product through a most fitting solution. The strategic fit is superb. It completely changed the game. iTune is also created an NBM revolutionizing the music industry. It’s like 3-In-1. It’s an NTE, followed by strategic fit to “solve” a problem and delivered through NBM.

            In our next post, we will discuss about NTE.  

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Saturday, January 1, 2011

Business During Economic Upturn

As we all know, it was a difficult time that the economy underwent in most of the countries in the world, barring few, though. In the current post-recession period, an organization needs to be ready to grab the opportunities arising out of the upturn. Growing revenues & profitability may therefore be the common objectives of most of the organizations. The challenge is to assess the current contextual landscape and envision the emerging / future trends before we initiate the growth strategy formulation process. While we design the financial value levers to give you the Growth of Top & Bottom lines, Working Capital & RoC, we should also think of some of the non-financial aspects of your organization to gradually develop a Balanced Score Card (BSC). This may call for making some changes in how we do business and may lead to Business Process Re-engineering (BPR) / Business Process Management (BPM). Re-visiting the business process and making a paradigm shift direct towards change management across the organization or the impacted functions.

Over & above, Vision-Mission-Value Credo, one of the starting points of BPR or BPM could be Voice of Customer (VoC) to become more customer-centric or to improve market participation further through better customer satisfaction / delight / loyalty. Market Research organizations help us to get our existing & prospective customers surveyed to start re-analyzing our SWOT to possibly redefine the go-to-market path &/or market attack plan. Customer Relationship Management (CRM) helps us with appropriate Contacts & Accounts, which serve as the basic inputs to any customer survey. Clear action items come out to move forward with multiple & simultaneous improvement programs.

For many organizations Product/s is/are the core to the business. New Product Development Process (NPDP) is therefore very important & pivotal to such organizations. One of the starting points of NPDP is VoC, which other inputs comprises of Break-Through Idea (BTI). For new-to-earth (NTE) products possibly VoC will have much lower weightage than BTI. The outcome of the NPDP needs to be High Value-Added Solution (HVAS) to solve customers' problem better than our peers (http://sami-kar.blogspot.com/2012/05/3-major-steps-in-solution-business.html). Value creation and time-to-market are the keys to NPDP to aptly position the product in the market place to gradually become peerless.

Once all these are done well, customer acquisition becomes the focus, as we know. Account & Business Development are the couple of areas where the organization may need to focus, after the valued decision is taken as to which vertical or which top X verticals to address, to start with. Business & Market Intelligence helps us to sharpen our focus areas to have faster return. There are some good business Intelligence tools available in the market which helps the senior & top management to take appropriate & faster decision making.

Price, for a non-commoditized product, has nothing to do with the product cost in a market-driven environment or for a HVAS, if it’s not a NTE. Price is a function of value that we deliver to solve customers' problems. A bottle of water may cost as high as US$ 10 or more in the middle of a desert for an utterly thirsty guy under the scorching sun. Pricing tools are available which can be a part of the pricing process to dice & slice data for desired analysis & decision-making.
To achieve all these, as we all know, we need a good, committed & talented team, which is a product of good Human Resource (HR) Management process & enabling organizational environment. HR Tools, Training organizations and the likes are available in the world to help us achieving what we like to do. The organizational environment needs to be encouraging, empowering & respectful to allow individuals & teams to excel in everything that they do. 

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