How do value engineering teams successfully scale their sales materials? Here are 7 key pointers to ensure a scalable value management practice, from the TVST CEO. Read more on this in our previous article.
Why is the scalability of your 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 more than fifty in a month is tough! (Even with the best tools and a fabulous value management team!) It gets even tougher when this total rises into the hundreds.
For a value engineer faced with a multi-million-dollar opportunity, it’s pretty common to spend hours creating customised outside-in reports, ad-hoc value-potential evaluations, and complex business cases. For leading software vendors, the money they spend on these sales isn’t really 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.
To keep ahead, software vendors usually end up pledging all the resources necessary to win the deal.cases. The challenge for value engineers, or value managers (we use the terms interchangeably) is to outdo their competitors. To build closer relationships with their customers, to involve and include the company executives, and to build trust and credibility.
Presales is not a cost: it’s an investment
How can large global software vendors 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 apply value management, without incurring excessive costs, to cover all prospects and close all viable deals, while maximising the deal size.
A scalable value management practice is about keeping quality high and costs low.
These pointers are from over twenty years of working in the VM field, trying different approaches with our customers (software vendors and telcos), and many trials and errors. The concept and relevance of these principles is easy to understand and conceptualise. Putting them into practice in your VM team, is a much bigger challenge.
7 tips for a scalable value management practice:
1. Standardise your deliverables
The first 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 your sales documents is the first step, but it is also one of the most difficult tasks for a VM team.
As soon as you’ve agreed a fundamental document structure and contents, 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. When these are similar and consistent in terms of structure and content, they’re much easier to build out and tailor.
It’s crucial to be clear on which KPIs you’re using for the value assessment in the outside-in. This is 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.
However, if you simplify too much it is likely to lead to really unattractive sales collateral. A sense of balance and fine-tuning are key. Simplifying documents is part and parcel of standardising them, but we must not forego sophistication or customer impact.
3. Automate – everything you can
With simple but sophisticated and standard but easily customisable deliveries, it is much easier to automate your document production. A great standard deck for your outside-ins wont stop the background consulting research on trends for verticals and the company’s goals from being intensive. But by automating most of the document and avoiding the need for any ‘cut & pastes’ we can save masses of time and massively reduce errors.
Advanced tools such as Shark Finesse, help value engineers to transform business case production. With these kinds of tools, we can make the experience more transparent and collaborative for the vendor and customer. Great business discussions and strategic insights makes the experience a lot more valuable, for all parties. And it definitely beats squandering priceless time examining data in a spreadsheet and manually building it into PowerPoint!
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 large 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 into the production process: from building the template decks, to developing an economic model and a selection of information sources, right through to automation.
Attempts to scale will fail: if you don’t QA as you go.
The consultants in charge of the research, outside-in, and business case production need a rigorous QA procedure. And the managers 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 get used. In the case of leading global software vendors, hundreds of outside-ins and tons of business cases can be produced by analysts every month.
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, most sellers feel producing these documents 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.
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. This support might be in the form of a service desk, a coach or mentor, or through online training resources, for example too.
7. Organise your teams
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 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 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 help to manage the BVM assets, like benchmarks. They 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. In a lot of organisations, some of the key players in the back office are outsourced.
To sum up
A scalable value management practice means you can build the best quality presales and sales materials, 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, while enesuring 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.
