Do you wonder how value engineering teams successfully scale their sales materials? We look at 7 key pointers to ensure a successfully scalable value management practice in this week’s post. We will develop on one of the ideas we talked about in our previous article.
Why is a scalable value management practice so important?
Being able to scale effectively with a value management approach, demands a practice that can easily expand. Believe us, having the ability to scale your sales deliverables when you are creating even 50 within a month is really tough; even with the best tools and a fabulous value management team! And it gets even tougher when this total rises into the hundreds.
For a value engineer faced with a multi-million-dollar opportunity, it is common to spend many hours creating well customised outside-in reports, ad-hoc value-potential evaluations, and building complex business cases. For leading global software vendors, the money they spend on these sales isn’t an issue when the opportunity is so big. These companies may only have 5-10 of these kinds of deals every year, which would total around 15-25% of new business, annually.
Presales is not looked at as a cost: it’s an investment
The question for large global software vendors is how they can really make use of value selling for the thousands of huge opportunities that aren’t “mega-sized” but, over the course of a year, typically stand for 50-70% of total new business. (Here we are talking about the 2000 -5000 deals that can reach from USD 250K-750K average size.) The goal in these opportunities is to leverage a value management approach for sales, without incurring excessive costs, to cover all possible prospects and close all viable deals, while maximising the deal size.
Scaling your business value management (BVM) practice is about keeping quality high and costs low.
This week we talk about seven principles that, based on our own value management experiences, we think are the most important things to consider when you are scaling a BVM practice. These tips are based on nearly twenty years of working in the BVM field, trying different approaches with our customers (software vendors and telcos), and making many trials and errors. The concept and the relevance of these principles is easy to understand and conceptualise; but putting them into practice in the BVM organisation of the software vendor, is a much bigger challenge.
Here are 7 steps to make sure you have a scalable value management practice:
1. Standardise your deliverables
The first and foremost principle is standardisation. It would be impossible to scale your practice if every value manager has their own ways of building and presenting an outside-in or a business case. Deciding on a basic template for these documents is the first step, but it is also one of the most difficult tasks for a BVM team.
As soon as a fundamental document structure and contents have been agreed on, it’s much easier to develop additional templates by means of industry verticals, solutions, or strategic scenarios. By the end of this process, you might have ten or more outside-in templates. But these will all be similar and totally consistent in terms of structure and content, which makes them much easier to build out and tailor.
An important point to note here, is that it’s really crucial to be crystal clear on which KPIs you are using for the value assessment in the outside-in, because you’ll need to stay consistent and use the same KPIs in your business cases too. Of course, these KPIs will be different depending on the industry and the solution.
At the cornerstone of a scalable value management practice, are standardised sales deliverables.
2. Keep it simple – but don’t lose sophistication or customer impact
Making sure that you keep things simple will help value managers and value sellers to present the outside-in or justify the business case outcomes. And simplicity also helps you to tell your customers your story a lot more easily. Simplicity and consistency will support you to ensure a value success story.
The thing to bear in mind here is that if you simplify too much it is likely to lead to really unattractive sales collateral. A sense of balance and fine-tuning are key here. Simplifying your documents is part and parcel of standardising them, but during this task it’s essential to remember that we must not forego sophistication or customer impact.
3. Automate – everything you can
With simple but still sophisticated and standard but easily customisable deliveries, it is so much easier to automate the production of your outside-in presentations and your business cases. Even when you have a great standard deck for your outside-ins, the background consulting research on trends for verticals and the company’s goals will remain intensive. But when you automate most of the document and avoid the need for ‘cut & pastes’ you will save masses of time and massively reduce your errors.
Advanced tools such as Shark Finesse, help value engineers to transform their business case production. These kinds of tools make the experience much more transparent and collaborative for the software vendor and the customer. This experience is a lot more valuable, with great business discussions and strategic insights. And it definitely beats squandering priceless time examining data in a spreadsheet and manually building a PowerPoint presentation.
4. Make sure QA is part of production
Outside-in presentations and business cases are hugely sensitive – so trying to scale them without assuring quality will always be a recipe for a disaster! When you reach a number of documents produced within a month, checking and fixing any document errors can easily consume more time than creating each document did in the first place. This is why QA must be properly embedded through the whole production process: from building the template decks, to developing an economic model and a selection of information sources, right through to automation.
Your attempts to scale will fail: if you don’t QA as you scale.
The consultants who are in charge of the background research, outside-in and business case production need to follow a rigorous QA procedure, at every step in their work. And the managers who are in charge of the consultants need to view QA as their top priority. Quality assurance is actually more significant than productivity.
5. Have a great PMO
To produce your sales documents to scale, without losing quality, you need to know how they actually get used. In the case of leading global software vendors, hundreds of outside-ins and tons of business cases are often produced by analysts every month.
The question is what happens with them all?
1. Are outside-ins being presented to final customers by the value managers or the value sellers who asked for them?
2. What did the customer think?
3. Was there a follow up after? If so, what kind of follow-up was it?
4. Did it take long to create a final copy of the business case?
5. Has the customer used the business case for any internal presentations?
6. Do internal parties agree with the business case outcomes?…
If you don’t have a strong PMO these questions and plenty of others won’t get answered. You see, a PMO controls all the opportunities that are supported by the value management team: one-at-a-time, step-by-step. Your PMO must be able to lever dashboards specially designed for value management operations. And, perhaps most importantly, your PMO must be made up of dedicated and skilled staff with profiles that align with value selling and value management. With all of this in place, you will find out what happens to the sales deliverables you built. When you know all this information, it will help you to scale more effectively.
6. Support your presales and salespeople – don’t leave them alone
We have seen software vendors invest so much of their time and effort into training presales and sales teams to use value management methodologies and tools. And in the end, it’s still not enough. The trouble is that the consensus for the vast majority of sellers is that they feel producing outside-ins and business cases consumes time they should be using to interact with customers. Additionally, most presales staff don’t feel confident to use the value assessment models and tools. If presales or sales executives aren’t happy presenting an outside-in to the customer for the first time, building the document on their own is an even bigger challenge. But how can you help them?
Never ever leave your presales or salespeople on their own! Your salespeople will need help from skilled value engineers when your strategies for scaling demand them to produce and deliver an outside-in or business case. You can direct this support and customised to each salesperson, where necessary; but support can be in the form of a service desk, a coach or mentor, or through online training resources, for example too.
7. Organise your people
Leading software vendors usually structure their value engineering teams, dividing them into two main groups: a field team and a back-office team. This arrangement really helps to scale a business.
The field team
The field team is made up of value managers, who join together with value sellers and technical presales people. These specialists are all customer facing, and therefore they’ll be in contact with the vendor and the end customer. In most cases these are the people who will deliver the business case. So, your field team will be the ones responsible for closing the deals.
When scaling, value managers usually aim for the large and strategic deals. And the trained value sellers and presales staff will be in charge of value engineering the smaller deals. The field teams are usually coordinated by their location, and in some cases because of their specific industry knowledge (or a fusion of both).
The back-office team:
The back-office team are your outside-in factory. They will build all the outside-ins, at scale. The best back office is made up of multi-talented people who can build customised sales documents for prospect customers across many industries. These people also deliver training, mentoring and on-going support to presales and salespeople. Your back-office team will teach the field team how to make best use of the value management methodologies and tools.
The PMO will typically be unified with the back office. They will help to manage the BVM assets, like benchmarks. They will also maintain your database, data and information sources, and update your templates and tools, etc. For consistency, the back-office team is usually a global group. And, in a lot of organisations, some of the key players in the back office are outsourced.
Having a scalable value management practice means that you can build the best quality presales and sales materials (including outside-in presentations, case studies and business cases etc.) for exactly when you need them, time after time. No matter how many deliverables you need all at once. Having a great team is massively important. But to make your scalability efforts as efficient and effective as possible, you need to standardise, simplify and automate your sales materials. Your sales materials will also need to go through a systematic quality assurance process.
No case will ever be the same as another, but with our years of experience in the field, we know these pointers will help you to scale your value management practice successfully.
Thanks for reading! We hope that you enjoyed our discussion this week. Please feel free to share to your social networks.