Selling in a commoditized market!

Selling a product or a service becomes very challenging when the forces of commoditization are at play. It essentially boils down to cost play and the ones with a lower cost most likely will win the race.  I would like to take the IT services industry as an example.  I have written a post in my company blog and it can be viewed by clicking here

 

Crossing the chasm between sales and marketing

Though marketing and sales are pursuing common objectives, the thread remains that they don’t get along well with each other. It necessarily needs to be aligned and have to progress forward if the organization has to grow. I have listed some of the steps that can be taken towards aligning these two functions in my company blog. You can read that by clicking here.

 

Tough times for the infotech sector!

Some pointers on the situation:

• No salary hikes for the next couple of years
• Companies are revisiting their variable pay components, where 50% of it would be linked to the organizations’ performance as opposed to individual’s performances
• The word ’subsidy’ is considered bad in their lexicon now
• Subsidy in transportation has got to go; one cannot look at 8 hour work-days and should be prepared for longer hours
• Subsidy in food goes out as well
• Consider yourself lucky if you are still on the job and pray to god that you will continue in your job for the next couple of years
• All low performing employees and the fresh recruits, you better watch out for alternate careers
• Mandate has been send to many TLs, PLs and above in the organization that they need to reduce the workforce by at least 15% q-o-q. Essentially by the end of the first year, you will have close to about 40% to 50% of the employees out of your organization
• This is a completely market driven and market dependent industry segment; margins will come under huge pressures because of the discounting and leveraging that these companies would have done keeping in mind their future earnings
• There is an ecosystem of dependency on this industry and each of it will come under heavy pressure due to this fall-off. Existing suppliers and vendors to these firms will have to take a cut in their business as well as margins.  Realty sector will be under huge pressure as the occupancy level will decrease. Financial insititutions will have to play the role of adopting a win-win solution. 
• Employee dependent ecosystem will be real-estate, automobiles, financial services, and lifestyle services
• This can well be a blessing in disguise that this country was looking forward to, for far too many talents are burried in these organizations doing dead-end and run-of-the-mill jobs. This is time for them to reflect and positively contribute to innovation and new business models than providing arbitrage services to the not-so-intelligent customers in the developed economies.
• Outsourcing really has been the boon and bane of India, for it deprived the intelligent ones from contributing to the society in a more meaningful way
• The sheen is getting lost on this segment; they are not able to run the gravy train continuously as the market realities are governing their growth and projections

Guess I covered quite  a few and if I can think of anything else, will contribute in subsequent posts.

 

A Paper on B2B Marketing Essentials

B2B Marketing Essentials

This is the paper that I wrote along with my colleague Satish and it is available as a free download. All you have to do is just click on the above image. Let me know what you think of the paper.

 

Challenges of techie-run enterprises!

There is this telecommunication company that is run by my friend and they offer voice, data and video solutions to corporations. I was a part of the conversation that they were having internally on their pipeline. There is one instance that I specifically want to recount here.

To one of the corporations in their pipeline, they have proposed a voice solution, which is quite superior in quality and it matches the cost of their existing vendor and this company has decided to go for it. This solution would decrease their communication expense easily by 30% without compromising on the quality. They have in principle agreed to go with the solution but the order is not getting placed. One of the reasons can be attributed to bureaucracy involved in decision making, but apparently the ultimate decision maker in the organization has also given the green signal to purchase. Still, the  order isn’t forthcoming. I was a part of this session where the reasons were being discussed for holding back the Purchase Order.

1. They are concerned about the quality of service, which is not the case because they are convinced on the quality

2. Price points are not high, because this is as good as what they can get from anyone else

3. Support again is not an issue, as the provider is in the same city as the customer. They have strong SLAs that will ensure quality of service

4. Budget again is not a problem for the organization, as this investment would certainly reduce their communication spend and they can see it from day one.

In spite of all this being overwhelmingly in favour of this telecom company, they still aren’t getting the purchase order for them to implement the solution. Then we realized, that it is a “techie-run company” and their priorities aren’t about reducing costs and it is more about improving their process, do value addition to their customer engagements, create IP, look at account growth and increase business acquisitions.

But then, entrepreneurship is all about doing more with less, and being frugal without compromising on the essentials is a way to go, whether or not the recession is on. This definitely is a challenge for  a “techie-run” company.

 

SOA Governance – Why is it important?

Lately, I have been reading a lot about SOA and this is something I am really good at (don’t get me wrong, I just meant the reading!). The more I read about it, the more I am convinced that SOA is the way to move forward. After all, it helps you to a large extent to define what the heck a service is anyway!

I am fully convinced about SOA after having read a miniscule percentage on the possibilities of what SOA can do for you, if done right. This is primarily the most important aspect of implementing SOA, which is getting it right. That defines the need for SOA Governance.

I am planning a series of pieces, which would be mostly acquired knowledge and translating my understanding into these series of pieces and would not be borne by experience of having implemented or consulted on SOA. Though, this is something that I would not be averse to doing in the long run.

When we say for getting SOA right, governance is really important, it brings us to why getting SOA is so damn difficult. This will be the gist of this post; pardon me for the long introduction before getting into the post.

Reasons why SOA is so damn difficult:

• It is unfamiliar and designing services is very different from building applications
• It is built to be re-used or leveraged in to new environments or applications
• SOA technologies are pretty complex and the standards are even more complex; SOA being loosely coupled and distributed makes it even more complex
• Ones who build SOA services don’t really know the consumers

In short, there is no way to instant “soafication” and it is a strategy that has to be put in place brick by brick where collaborations between various stakeholders and the infrastructure is of paramount importance. Doing SOA right simply boils down to effective governance mechanism in place. As the famous adage goes, “I dont know how to do this, but I believe that my team is doing it”. How many times have we heard this before?