Carpe Diem Consulting - Sales & Marketing Blog For Microsoft Partners

The McKinsey view - managing IT spending in tough times

Good article from The McKinsey Quarterly (December 2008) discussing the fact that "businesses badly need to extract value from their IT functions".

This sounds like a real opportunity for proactive sales people.

The flavour of the article is about reducing IT spending which initially sounds threatening - but if we're in partnership with the IT manager, and being proactive, we can add genuine value which will build the relationship into the longer term.

From a Microsoft platform perspective, we should focus on the part of the article that states "improvements can be made with modest investments".  Part of the power of the Microsoft platform is that subsequent minimal investments in different parts of the stack can actually unlock huge ROI from existing software assets.  For example - simply adding a mobility solution can mean a field sales force can better utilise a Microsoft CRM investment - increasing sales, improving customer satisfaction, and reducing downtime and travel costs:  utilising Performance Point Server can tap into deep Business Intelligence functionality that ships with SQL Server 2008.  The list goes on.

But is there urgency?  I suspect if YOU'RE not proactive and your COMPETITOR is - then you might be the one that is targeted for the cost cutting...........

Stop selling software - start selling competitive advantage

It is continually frustrating to see IT sales people that know so much about their products - but so little about the businesses of the customers they sell these products to.  In a 2006 Frost & Sullivan report on the key issues holding back the Enterprise Content Management market, they rate Difficulty in understanding business benefits and Mismatch between business needs and solutions offered as the highest and 3rd highest "market retardant" factors.

As an IT sales community, we should hang our heads in shame.

Increasingly research is at hand that points out the link between IT and "competitive advantage" within the firm.  A great example is the recently published article Investing in the IT That Makes a Competitive Difference, by Andrew McAfee and Erik Brynfolfsson in the Harvard Business Review.  They argue that the US economy has accelerated to unprecendented levels, and that the key engine behind this growth is IT.

They suggest a 3 step approach to maintaining a competitive edge:

1. deploy a consistent technology platform
2. innovate better ways of working
3. propagate those process innovations throughout the company

Andrew also references the article on his blog here.

This approach should ring bells of joy within the Microsoft community.  The concept of a consistent technology platform - as represented by the "Microsoft stack" - is a key element of the Microsoft value proposition.  Indeed, a course entitled Realising Platform Value has been developed to assist sales teams to have platform discussions with customers about realising the additional ROI that can be generated from the Microsoft platform.  (This is one of the few courses I'm aware of that was compulsory for EVERYONE within Microsoft Australia to attend.)

What a great conversation starter for a meeting with a CIO.  Instead of saying "what would you like to buy today?" we should be asking "are you happy that your technology platform is providing as much competitive advantage to your organisation as possible?"  What a terrific way of supporting our CIO customers - assisting them to provide a technology platform that can maximise their firm's competitive advantage.

This diagram - from the Realising Platform Value course - illustrates the progression we can achieve for customers in moving them from point solutions to an integrated platform:

Having written all of the above - it is also important to be aware of contrary arguments - and Nicholas Carr has written an excellent article entitled IT Doesn't Matter - arguing that "scarcity, not ubiquity, makes a business resource truly strategic", and hence - like electricity - IT is now a commodity, freely available to all and hence not providing competitive advantage.

Either way - wouldn't this all be a terrific - and differentiating - conversation to have with a prospect!