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The Transaction
Episode 7 viewing time only 13 minutes
Lessons Learned for buyers from Episode 7 of The Transaction
Provided by Doug Plotkin, Member of PA's Management Group, PA Consulting Group
1. It is critical to interact with the vendor at all levels. One of the great mistakes that buyers often make is confusing the
people they see (that is, the sales team) with the larger organization who will provide services to them. These buyers were
quite right to make site visits part of their due diligence to gain an understanding of the entire organization, particularly
the delivery team. The provider may put their brightest stars on the sales team, while the delivery team and structure that
comprises the core of the organization is wanting in comparison.
2. One has to be quite careful to limit the role of emotion in the selection decision. That one vendor sends a limousine to pick up the team to bring them to the site, while the other does not, plays to the emotional response of the buyer but certainly may not reflect the organizations ability to deliver great services; it could be a ruse. So, how should the buyer "allow for" emotion in the selection, while preventing it from becoming the pivot point in the decision? Simply by assigning "emotion" a fixed level of points in the vendor scoring (say 20%) and keeping the rest of the scoring (for pricing, technical acumen, scalability, service levels negotiated, responsiveness, etc.) as objective and scientific as possible. Yes, cultural and emotional fit should play a role, but their limits must be agreed at the start of the initiative, not towards the end when their use can overwhelm other considerations.
3. Make sure that the team comes to individual conclusions, which are then aggregated. Be careful of more charismatic members of the team influencing others by asking each team member to score his or her emotional response before they are discussed together as a group.
Doug Plotkin is a Member of PA’s Management Group and is responsible for guiding PA's sourcing program within North America. In his 15 years of experience he has participated in all facets of the outsourcing transaction, including Business Case Development, Pricing, Service Level Development, and Negotiation Support, and has worked with clients all over the globe. He is a regular conference speaker on these subjects, and has advised corporations in a wide array of industries, including Travel, Finance, Energy, Pharmaceuticals, and Retail. Doug joined PA after working within the sourcing groups at META Group Consulting and IBM Global Services. For more tips and advice on outsourcing best practices and strategy email Doug Plotkin at doug.plotkin@paconsulting.com or visit the PA Consulting Group website at www.paconsulting.com.
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Lessons Learned for outsourcing service providers from Episode 7 of The Transaction
Provided by Rob Leavitt, Principal, Solutions Insights
1. Set the right tone. First impressions matter. When the CEO calls to make sure everything is on track, the clients are impressed. When planning for the site visit goes smoothly, it makes a difference. When a limo picks up the team at the airport, it sends a signal-- and a rather better tone than letting the client rent a car and get lost on the way to your facility. It's not about throwing money around; it's about a careful and thoughtful demonstration that the client visit is a high priority.
2. Due diligence goes both ways. The site visit is a critical part of the client's decision process, but an important part of the visit is making sure you've done your own due diligence on the client. When you show that you know what really matters to the client, that's a hit. When you don't know the client's key competitors, that's a problem. When you spend time in a meeting "teaching" the client how to use Google, that's a disaster.
3. Plan not to plan. Preparations for the site visit are essential, but flexibility is just as important. It's the client's day. You need to help them see and do what they want, not follow a script you think is best. Engage with the client on the issues they want to emphasize. Introduce them to the people they want to meet, and be ready to change course at a moment's notice. It's their questions that matter most, not your presentations and demos (although the demos generally do matter!).
4. Show them some love. The client wants to know if you really value their business. Will they be a premier client, or just another logo and press release? If they are not at the top of your list in terms of revenue, give them another reason to feel the love. And don't say "all our clients matter"--they might laugh you right off the list. They need a legitimate reason to believe.
5. The vibe matters. By the end of the decision process, the client wants to feel the organizational vibe. Do the employees seem happy? Are they focused and professional? Is there genuine excitement at the prospect winning their business? Seeing and feeling a productive and energetic environment goes a long way in building confidence that you really can deliver on your promise.
6. Reality comes to the fore. At the end of the day, the client sees through the proposal to your actual capabilities, culture, and commitment. If you don't sweat the small stuff on a site visit, you may well take short cuts in the engagement. If you can't drill deep in discussing the solution, how well can you actually deliver it? If you miss signals in a meeting, will you pick them up on the job? Ultimately, if you're not fully committed, capable, and culturally aligned in reality, the client will decide accordingly.
Rob Leavitt is a principal at Solutions Insights, a boutique, Boston-based consulting and training firm specializing in IT services and solutions strategy, marketing, and sales. Rob has worked with dozens of the top technology firms to help improve marketing strategy and performance, and published extensively on a wide range of marketing and solutions topics. Before co-founding Solutions Insights in 2007, he ran marketing and membership at ITSMA, the leading community for IT services and solutions marketing executives. Learn more at www.solutionsinsights.com; check out Rob's blog at www.reputationtorevenue.com, or contact Rob directly at rleavitt@solutionsinsights.com
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