Selling Solutions in a Tight Economy
As I mentioned in a previous blog entry, the current financial market conditions are pretty scary out there and I tried to review some areas of impact. In this entry, I want to cover some strategies for dealing this these problems and selling effectively in this market.
First, let’s set some basic understanding. One of the outcomes of the financial crisis has been the freezing of the short term commercial paper market, this topic was raised by Randall Stephenson the CEO of ATT in a recent interview (http://money.cnn.com/2008/10/01/news/companies/att.ap/). Large companies use commercial paper or the short term credit market to manage cash flow at low interest rates, essentially as if you would use a credit card. It keeps operations moving and projects funded. Typically there are many buyers of this commercial paper since large corporations like ATT are able to cover the loan, however many of those potential buyers have disappeared in recent weeks which has dried up the commercial paper market. While large Telcos may be stable businesses, this creates a ripple effect in regards to upcoming investment decisions since funding could be more of an issue. Now take this on a global scale and you can see it affects in many geographies.
So what does this mean for vendors selling hardware, software or professional services into these companies? You have better figure out your value proposition and return on investment to ensure continuity or future sales. I feel there will be more investment scrutiny until the markets start to free up again. Additionally, vendors should be more focused on solutions with discrete outcomes that deliver measurable value instead of point products. End to end ownership of outcomes will be more important than a best of breed product that replies on integration to many other products to create value. Finally, risk sharing to ensure these outcomes (instead of simple low prices) will help win deals by more effectively matching cost to revenue or savings realized. One blog I have recently read focused more on quick revenue generators such as advertising, this may or may not work depending on your portfolio (http://www.xchangemag.com/blogs/telecom/blogdefault.aspx/a/economy-ravaged-invest-in-advertising-now.html/m/art).
At Infosys, we are continuing to evolve our model to provide new options to our customers in this time of market turmoil. In addition to providing high value, we are actively investing in new IP such as SaaS platforms to provide quick deployment capabilities, risk sharing models to further align ourselves with our customers and large, transformational propositions to take ownership of business outcomes instead of only point projects. We feel this will keep us ahead of the market and enable that trusted relationship with our customers. How is the market affecting you? I would like to hear your thoughts?
