Last month I shared some thoughts about how systems integrators traditionally made decisions to pursue a project opportunity (go/no-go), and also some interesting new challenges pursuing network-centric projects today. A company’s sales efficiency factor (SEF) is often measured by what projects they choose to pursue and which ones they run away from. This is not an easy decision to make when you are in the sales trenches with quotas to carry and income to earn. The decision can be even more challenging for owners or sales management who must commit company resources to pursue an opportunity.
From my perspective and field experience, having been in both positions, there are some critical opportunity questions that come to mind. Here are seven areas to consider that have delivered strong SEF for me and my clients who sell IP video solutions.
1. Why does your company want to pursue this network-centric project opportunity?
Getting your foot in the door with a large customer with great growth potential is a frequent answer. Once we get past the traditional answers you should consider digging a bit deeper. Your next question should be, “What do we really know about their buying and supplier evaluation process?” Unless you understand this better, taking a shot at a project in the hope of getting more business is like playing poker with a pair of fives in your hand. Gutsy, but not a very high percentage bet.
Dig deeper to better understand how this prospect measures the performance of their tier 1 or tier 2 strategic suppliers. Does your company fit that profile? If not this relationship may be based on a “best priced” buying relationship going forward.
2. Understanding the real business value you can deliver begins by asking yourself the right questions about the key project stakeholders.
The good news is you can find a competitive advantage with different project stakeholders who include end users, general contractors and electrical contractors. The bad news is a traditional selling approach may only focus on the bid price, which can blind you to other selling strategies. I often hear from clients that both general and electrical contractors only focus on the low bid. Au contraire mon ami. While price is certainly important, knowing how contractors make and lose money on projects is really important to help you differentiate your bid.
If you understand their risks and can mitigate them through your implementation process, you must communicate that advantage. An example would be programming, testing and burning-in system components before they are delivered to your contractor. This saves them time in the field and can get them paid faster on progress billing.
3. How do the feature sets and technical specifications translate into actual operational business results?
Many projects assume technology will deliver more than actually possible once a project is installed and technically operational. This is especially true in an opportunity that is hard specified by a customer or consultant. The question becomes, will the customer receive the benefits expected and will they be referenced in the future? Your reputation and company’s brand is at stake, especially in a converged market. Consider the strategy of offering a second solution that may be more appropriate, and saves time and money. I have seen more than a few projects get awarded to a solution that met the functional specification but with a different product approach.
4. What are the expanded customer expectations and responsibilities that converged solutions bring to growing this market?
In my experience, taking the time to understand what an IT department will really need is paramount to growing this segment of your business. The statement of don’t judge a company when things are going well, but when things go wrong, applies strongly to this market segment. More cooks in your systems integration project kitchen means anticipating what will you and how will you respond to future system support issues. Understand, you may have two or more customers in a convergence solution.
5. Your business model may need some realignment to play in this market since traditional revenue models can be outdated.
Your customer may need you to be flexible on how you service and support a network-centric solution. Traditional thinking would include total “ownership” of a system, including parts, service smarts and not having someone touch your system for warranty reasons. Customers in this market may view this model very differently. This can dramatically change the fundamental reason you chose to accept the project in the first place. If you choose a project with a low front end margin, expecting to make up margins on the back end add-ons, you may have a rude awakening.
The key to making the right go / no-go decision is based on recognizing how this new customer paradigm works. It’s about having a customer-centric focus. Converged systems require rethinking how the customer will derive value from the relationship with your company. Product- and labor-driven revenues will shift to service-based revenues. How well you can apply and service technology will often determine your future profitability. Remember innovation and execution will enable the business results technology was trying to solve.
6. What steps can help you structure your convergence go / no-go processes?
First and foremost you need to redefine what verticals you are pursuing, what size projects, and are they or are they not network centric? Ensure everyone in your company is aware of the direction you are leading the company. Never assume they know because often they may not. Change is scary, so clarify. Every 1,000-mile journey starts with the first step. Begin the discussion on how your team decides to pursue or reject projects from a rational point of view. Brainstorm a discussion about best and worst projects. Learn from mistakes and move forward.
7. Understand the role your company will play and what customer expectations are, aside from technical performance that will satisfy long-term sustainability of a project. Then make sure the end users’ stakeholders clearly understand how you will make their lives easier if selected.
Understanding the role that the customer’s IT department will play in the long-term delivery of business value is crucial in determining customers and projects you may choose to pursue. IT departments can make or break business opportunities in the convergence market. IT department needs change based on their workload. Projects that bring physical security into their world must clearly communicate an understanding of their workflow processes, resources and long-term goals to gain their support. While not intuitive to systems integrators who are typically oriented to install, adjust, and handle acceptance and training of the system, many struggle with understanding the expectations of IT stakeholders.
Are You a Great Security Player?
Crafting a stronger go / no-go process should involve the entire team, but differently than you have done in the past. It’s about perspective. Sales often drive project opportunities based on their role of driving revenue, while technical teams act as the buffer between enthusiasm and realities of delivering technology-based on their comfort/experience levels. Owners and managers balance the risk vs. reward of a project. Wayne Gretsky once said, “A good hockey player plays where the puck is. A great hockey player plays where the puck will be.” Where will your company be as you pursue network-centric project opportunities?
The great companies in business today always have good business discipline. Good discipline helps companies build their brand and reputation. Be disciplined as you build your brand!
Paul Boucherle, Certified Protection Professional (CPP) and Certified Sherpa Coach (CSC), is principal of Canfield, Ohio-based Matterhorn Consulting (matterhornconsulting.com). He has more than 30 years of diverse security and safety industry experience and can be followed on Twitter at [email protected]