Facing marginal growth, managed service provider Logicalis decided to switch selling tactics and created a group of business-savvy consultants. They would be called in to pre-sales meetings in order to tout business outcomes, not talk up technical specs.
This was three years ago – and sales have “skyrocketed,” says Ed Konopasek, vice president of consulting and annuity tech sales at Logicalis.
Why the fuss over business outcomes? It all stems from a shift in the dominant tech buyer, from IT to line-of-business (LOB). An October 2016 Forrester study found that 45 percent of business leaders plan to increase their tech budget in the next 12 months. Gartner says the CMO will outspend the CIO in tech this year. And IDC predicts only 40 percent of CIOs will lead the digital transformation of the enterprise by 2018.
This new reality doesn’t jive with the old way of selling technology. In the past, service providers like Logicalis would call in systems engineers for help closing a deal. They’re still around and valuable, says Konopasek, but business-savvy consultants are also needed to talk to the LOB.
We sat down with Konopasek to learn about Logicalis’ pivot to selling business outcomes.
Why did you create a group of business solution consultants?
Konopasek: I've been doing this role for approximately six years. For the first three or so years of this journey, we've struggled. We made money and grew the business, but only marginally so. And so we started taking a really different approach, trying to understand why the customer is interested in managed services. What business objective or initiative is this solving for them?
We really started to focus more on driving a business based outcome, than solely focusing on the feature-function benefits. When we backed up the bus, so to speak, and understood what those initiatives were, our success in selling the end solution started to skyrocket.
So that was really the early days for us to start formally developing a group that not only focused in and around technology optimization, but around advisory services as well.
Do you sell to the CIO or LOB?
Konopasek: We’ve been in this marketplace for 20 years domestically and have tremendous relationships throughout IT. By and large, we target the CIO. But savvy CIOs who’ve earned a seat at the strategy table tend to be forging partnerships with line-of-business. And the line-of-business leaders today actually have greater influence for much of the IT spend. It's all about helping the CIO figure out, "How do I enable business initiatives with the services and the capabilities that I have as a service provider to the business?"
When I sit down with CIOs or start to get familiar with a customer, whether it's an existing customer that we're elevating our stance in or a new customer, I really start to get a sense of the organization’s culture. Does the organization view IT as a cost center focused on improving operations, deploying new systems, reducing IT cost and basically keeping the lights on? Or has IT crossed the chasm and is starting to be looked at as an enabler of innovation? Have CIOs spawned relationships with line-of-business? Do they impact business strategy? Lastly, and most importantly, can they drive these sorts of digital accelerations with greater agility, not reducing IT spend but optimizing it?
Do you target certain vertical industries?
Konopasek: We have advisory services around a handful of industries: health care, government, education. We provide genuine vertical business consulting and insight and have very strong points of view. Our heritage is technology and service optimization strategies. That's the bulk of what we've been doing. But we're able to create a stronger value proposition within it. In some cases, we've increased our worth to the point that maybe we're not our client’s sole strategic advisor, but we’re clearly a strategic advisor.
Did you transition existing employees or bring in new ones with business skills?
Konopasek: It's a very fair question. This is a new way to sell. It’s not that anybody in our organization is deficient, but we do recognize they're not familiar with this motion to deploy that we could scale in a rinse and repeat fashion.
We did a little bit of both, where we brought in folks accustomed to a consultative engagement model. We defined that model and then very quickly started to tool out, with a mixture of both existing sellers and incremental outside new hires. We formed a group of resources that can be leveraged in a pre-sales capacity targeting both new white-space clients as well as our existing customers. It’s an expensive sales model, but we are seeing great success.
Was the pivot to business-outcome selling harder or easier than you thought? What were some of the biggest challenges?
Konopasek: For those who have yet to experience it, it's very difficult. Many of the folks, including myself, really come through that classic reseller stance. So it's difficult to look through the lens and try to understand how a converged infrastructure, for example, solves a business problem. If that's what you've been doing for many, many, many years, your tendency is to drop back into the technology gobbledygook when the going gets tough. Instead, you have to elevate and get to the business initiative.
The challenge is connecting what I call the business pain dot to elements in our portfolio that may be of a technical nature. The you need the experience or skill to paint a picture in business terms, and show the value the way the client wants to see it. That might be agility or speed to market or shrinking the cash to value window [in the case of an acquisition]. After you've gone through that a few times and clearly watched calyces full of talented and very bright people going through this, all of a sudden a light goes on. People are very quick studies, and we have created processes internally where we can assemble a team when our pursuit organization finds an opportunity.
We've created a virtual pursuit mechanism where folks that have strong experiences across this new way of thinking are able to come together quickly. Not an inspection vehicle but more a collaborative vehicle to talk about the art of the possible, how we connect the customer's pain dots to elements within maybe our portfolio, or our partners' portfolio, or the market's portfolio. And we come back to the client with some ideas on what we could do and what that value might be, and see if the client is interested in taking another step.
Where do you go from here?
Konopasek: It's such a tremendously exciting time to be in our industry, because we can enable innovation and spawn business agility. From traditional clients to future clients, everybody is turning to IT for this. Now we're being challenged by clients telling us, "Hey, here's our business challenge. How do we solve this? What role does technology play?"
You’ll see an ongoing focus on verticalization within our company and in our business. In addition to aligning vertically, we're learning more about the client's desired applications or their application strategies or their application life cycles. We're having to really understand how those applications traverse the existing infrastructure. While infrastructure is critically important, it’s almost table stakes. We have to take an application-centered view on solving problems, when we reach out into the tenants of the “third platform” of social, mobile, cloud and analytics.
Based in Silicon Valley, Tom Kaneshige writes the Zero One blog covering digital transformation, AI, marketing tech and the Internet of Things for line-of-business executives. He is eager to hear how digital transformation is impacting your business. You can reach him at [email protected]