Articulating business value

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One of the hardest things in selling professional services is to properly articulate the business value of your solution in your proposal, especially during an economic downturn. We in the “Microsoft partner camp” are often not very good at establishing the business value of what we sell. It’s particularly challenging, of course, to explain how an information worker productivity solution (so much of what we sell) produces business value for the customer. In real terms, Word 4.0 and Word 2007 do almost the same things. And the precise articulation of how, exactly, the new versions of Office or SharePoint make things better, faster and cheaper for organizations, isn’t easy to produce.

I’ve been thinking about bringing it back to basics. There are a few simple concepts pertaining to business value that can be understood easily, and that may help us better frame the topic.

Value is in the eye of the buyer: No matter how well you hit all the right notes in your proposal about the business value you think your solution has, in the end it’s down to the purchaser to decide if you’ve understood his context in your proposal. We need to understand how our customers define value, not how we define it (the price of the solution is what we’d like to get for it; what’s it worth to the customer and why?).

Different buyers have different priorities: Technical buyers evaluate the specifications of a solution. But, for work of any size, they are almost never the final decision makers as they don’t control the budget. Business executives make purchasing decisions, and they care about technology only inasmuch as it contributes business value. They ask how the solution contributes to meeting their objectives. Is it cheaper, faster, better – and, more importantly, how much cheaper, faster and better? Solution providers that fail to clearly articulate the business value of their proposed solution do not win work.

How to determine business value: Talk to the customer! This is why RFPs and unsolicited proposals are so hard to generate and be successful with: if you can’t ask all kinds of questions, establish trust and, ultimately, gain insights into what drives the customer (right down to financials), you can’t really articulate your business value beyond generalities. Talking to business executives is best because they can articulate clearly what actually drives them. Talking to IT people is better than not having a chance to talk at all, but requires a special, “CSI” like skill set. You need to ask how they are measured and compensated, and what makes them successful in their organization. From that, you might be able to reconstruct the actual business objectives (provided that the organization has been successful at downloading them to its IT group).

How is business value defined? I think it differs according to sector – the private and public sectors are very different animals when it comes to determining the business value of a software solution.

Private sector categories of business value (in probable order of importance):

  • Increased revenue
  • Cost savings
  • Risk management
  • Intangible factors

Public sector categories of business value (in probable order of importance):

  • Better/more responsive service delivery
  • Risk management
  • Cost savings
  • Intangible factors

For each of these, it’s important to be cognizant of the duality in stating business value in professional services: one type of business value is derived from the actual solution itself (i.e. the completed product and its impact on the buyer’s business). Another type of business value is generated as part of the service delivery: risk management, for example, is an attractive motivator for buyers who are not confident in their own abilities to deliver a solution, or who don’t have the right technology skills in house. The key business value for them is being able to outsource the solution and transfer their risk to a professional services firm. Therefore, it’s important to present both the product and the services journey in terms of business value in your proposal.

Good luck with your proposals!

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