Selling to CIOs is a difficult process and getting tougher

He reached out to the CIO with resolute frequency almost like clockwork; his connects were based on the timeline given by the CIO on when to reconnect for the decision on the solution. The CIO on his part never closed the loop, kept him lingering in the background with a hope that he will someday be successful in getting the order. This continued for almost a year with distractions in the form of small activity that he had to engage in with the IT team to validate a use case or elaborate on technology integration, scalability, etc.

His organization was running out of patience with the prolonged engagement which for most of the year continued to remain in the active pipeline but failing to convert. The management wondered on the investments made over the year with the lure of a referenceable customer with high value business. The story was beginning to look like a stretch of belief with a growing feeling that the CIO will not be able to convince internally. It was a tricky situation where reaching out to the CEO could potentially make or break the deal, the relationship with the CIO would have anyway broken.

On his part the CIO – a veteran of years – would keep finding new clarifications or actions in every meeting, each sounding logical and never really answering the question on what will result in closure. The vendor systematically addressing each and every query, his team finally signed off the pilot and put the ball back in the CIOs court. The CIO sought help to present the solution to the Management which was promptly provided as time continued to slide. The vendor CEO cracked the whip and demanded closure either way in a defined timeline.

Agreeing with the direction set forth, the salesperson confronted the CIO and pleaded for closure citing helplessness in offering the enviable deal beyond the timeline. He hoped against hope that the fish will bite and was seemingly rewarded with an opening that promised closure with a foot in the door and conditional commitment to scale up should the initial engagement deliver to promise. This was taken in the spirit of partnership but he was cautious in his pronouncements internally. The wait appeared to have been worth the efforts invested.

The ordained time came and went; the order continued to elude him, the message from the CIO was that the powers that be wanted further evaluation of options. It was quite evident that the business was not really coming to fruition in the near foreseeable future. The inability of the CIO to push internally was quite apparent, in hindsight his demeanor was always defensive, lacking assertiveness required to push through a decision. With lost credibility the salesperson had nowhere to go except to grin and bear it and keep the CIO humored.

Why do CIOs not come clean on the need, process, decision making hierarchy and metrics, timeline, urgency, and finally the budget upfront before engaging the partner ecosystem ? What keeps them opaque to the external world, at times even to their teams ? Is it power that they enjoy or they try to hide their insecurities behind the bravado and resultant activity with occasional outcomes ? Are their successes random occurrences of chance or the teams’ hard work that happens because or despite the CIOs interventions ? The broad brush that I paint applies to a large cross-section !

Why don’t vendors ask tough questions on the need, the timeline in which the decision will get taken and allocation of budgets ? I know some who do and some CIOs who give straight answers; in many cases the sales teams hear but don’t listen in their desperation to close a sale driven by period end pressures and targets indulging in wishful thinking, running towards a mirage. Then there are CIOs who are uncomfortable elucidating a clear and crisp no thereby resulting in long periods of courtship and eventual breakup.

For the vicious circle to break it requires change on both sides; the change begins from sales leadership who need to be ruthless in their pipeline management moving off when they don’t see traction. They push sales teams hard resulting in wasted efforts. Internal and external expert facilitated sales training and mentoring are required to imbibe and sustain the sales process using experiential training rather than templated workshops. Changing your customer is going to take a long time and then again it may not happen.

My sales pitch: Workshops on “Don’t sell – help your customers buy” available to the interested !

Building a partnership

It does not matter if the vendor is big or small, local or global, domain centric or broad based, custom solutions developer or provides package implementation services, hardware products or software licences, or any kind of service provider; they all want you to believe that they all are worthy of being anointed as a preferred and trusted partner to your IT and business initiatives. Everyone without exception believes that they imbibe behaviours that qualify them for this elevated position.

I am not sure when the transition happened but sometime in the recent decade the term partner replaced the vendor or provider. I think people went back to basics in the early part of the millennium driven by the slowdown, started focusing on leveraging existing ones and building new relationships. Business was tough to come and choices plenty which is where people made the difference. This subtle transition eased into our way of working and no one objected to the new reality.

Today we have partners providing total outsourcing, specialized domain specific or business process outsourcing, desk side support, apart from the various categories listed above. Many of these who have put in their heart and blood into delivering products/services irrespective of the contract or commercial arrangement are truly partners to a CIO and the enterprise; my respects to them. We also have partners providing toner cartridges, USB sticks, printing paper where price is typically the determinant factor !

Recently a CIO friend narrated a story where she met a new vendor where the discussion started with the intent that we would like to be your partners in success and not keep it transactional. The CEO and the team downward demonstrated high passion and commitment at the discussion table. They got engaged in a few projects as a precursor to what could be bigger things and achieve the status of a trusted partner. With many vying for the same business, it was seen as a prestigious win.

The slip between intent and execution has many horror stories spread across the industry. Senior teams from vendors attempt to build relationships with the CIOs, the sales team works with the domain specialists and the next level, and the delivery team which typically has no connect with the process starts discussions with the project managers and the users of the proposed solutions. And that is what transpired here too; one project was delivered well enough, the other killed the relationship.

What appeared to be a dream run became a moon race with surprises all through the journey ! The initial effort estimates did not fit the project reality; either the team who did the initial study did not understand the complexity and expectations or her inputs were ignored in the proposal. So there was an attempt to restrict scope to fit the resources allotted. That upset everyone involved; the CEO made a visit, so did others involved in the initial discussion. Much water had flowed and a dam was essential.

Restoring some sanity to the project with the vendor CEO approving the additional investment and some hit on the CIOs side too, the project looked like being back on track; but that was a false positive. The lack of trust made success elusive; the potential partnership gained adversarial tones with each pinning the blame on the other. It took some effort to bring everyone to a common understanding and move ahead.

Partnership is built over a period of time and is a function of delivering to promise consistently across the layers. It takes effort to sustain it and requires investments and transparency from everyone. Everyone hates escalations which result due to lack of communication and assumptions. In my experience I have found partnerships that have stood the travails of time when there is no gap in expectations on both sides. Sales transactions do not build partnership, they only address tactical need.

Legally Illegal

Last year was a very difficult year for most software companies with slowdown in new licence sales that brought in a negative trend in new business revenue. This happened very quickly after the globally experienced slowdown a few years back compounding the issue. This had all software vendors almost like acting in unison deciding to engage their existing customers in licence audits. If you cannot get new revenues, let’s squeeze some juice out of existing lemons.

So these engagements began to look all over the place; the data centres, servers hidden under tables, desktops converted to servers for a simple test or proof of concept, users created though inactive, resigned employees not deactivated, it did not matter what the event was, if there was an user identity or a database, or an instance of the application, it needed to be licenced. Office automation and other fringe app vendors joined the fray and added to the already harried CIOs blood pressure.

No debate that licence compliance is non-negotiable; licences for software or product or package used for the enterprise that in any way impacts a business process. Most vendors allow disaster recovery to be setup at nominal or no extra investment as long as it is not used conjointly with the production environment. That looks like a good principle though some complicate matters based on number of days used even when the primary was down and not operational.

Some also allow test and development instances to be setup; interestingly most do have a licencing policy that charges the customer, however most sales teams shy away from highlighting this fact during the pre-sales discussions or even when the purchase order is received. Instead they give the CIO a fine printed legal document to sign without pointing out to the salient points that the customer needs to be aware of. I don’t know of CIOs who read those wonderful documents; it’s like pressing “I accept” when we enrol to a new website or app.

So far still so good as each instance expects the customer to get into an engagement with eyes and ears open; the principle being we gave you the full documents, you read and sign or you don’t read and sign, that is a choice. The discussion gets interesting when new or additional licences are required even if a line of code is changed or added to any screen, form or report or an add-on deployed. This now attracts additional investment, sometimes a lot more than bargained for. Now that is hitting below the belt !

If I may add, the same vendors participate during the pre-sales gap analysis and bid and quote for customizations through their consulting arms vying for implementation business. But no mention that if the customer did end up customizing, then … This aspect of licencing is rarely discussed if at all and mostly comes up during licence audits leaving the CIO gasping for life. The management demands that the CIO know all this as it is his/her job to know and manage the vendor.

Page number XX, clause YY, sub-clause ZZ in the sales agreement is cited as the reference for the new demand. Read it and if you can figure it out differently let us know; else here is the bill of material and the timeline in which you need to buy. Consequences you know are not something you want to talk about. Sheepish acceptance and wows to be more careful and read all the fine print is normal behaviour; the management takes a not-so-kind view but goes ahead with the devils choice.

Why does this charade repeat itself globally with many vendors, some more than others ? It does not matter which industry, which country or geography, size of the customer (in fact the bigger the better as they are averse to the publicity it draws), this is becoming one of the relationship breakers between the impacted CIO and the vendor. Stories of these are rarely published by publicity shy individuals and enterprises. Is there a way out ?

I believe there isn’t an easy way out; negotiating from a compromised position does not get any great deals; neither does it do wonders to CIOs careers. Whether they like it or not, CIOs have to get more diligent in their approach to legalese and contracting. As the markets saturate and mature, read changes to changing end user contracts and/or licensing terms. You never know what impact it has on your company.

Fragile relationships

Over the years CIOs and vendors have worked to forge relationships that go beyond transactional and contractual obligations. This decade long trend has strengthened some bonds in such a way that irrespective of the companies that the CIO or the vendor representative worked for, they continued to do business over the years. It reflects the adage that people do business with people.

CIOs in new assignments replace vendors with their preferred partners from the past based on comfort and the proposition that they know the people within the company; they are comfortable with the management hierarchy and the finer nuances of the organization way of working. However, such changes are occasionally disruptive to the enterprise as well as the incumbent vendors who may have enjoyed good relationships and business with the earlier CIO.

An interesting situation played itself when the sales head of a large hardware vendor (A) moved to their larger competitor (B); the customer used the solution of vendor A and the CIO was planning an upgrade or replacement. The sales head had to come back to the CIO to work in her new avatar with vendor B to sell the competing solution. Earlier as a representative of vendor A, she had advised him of the demerits of moving to the industry leader’s solution. The predicament that switched over a weekend close to signing the deal created some amusing but discomforting moments for both the CIO and the vendor.

While they enjoyed a great relationship, the CIO demonstrated maturity with fair evaluation, and technology taking precedence in the decision making criteria. In the end, the CIO did buy vendor B solution but with a clear message that the decision was fait accompli before the movement of the sales head. It was a lesson in humility for her being a large order for a marquee customer for which she could claim no credit.

In another case I found business to business connect stronger surviving changes in relationship managers over the years. The foundation was built on long standing relationship though the delivery was of acceptable quality. This relationship sustained itself while the sales team played a facilitating role managing renewal of contract and extension of service. Why do some relationships survive beyond people or organizations ? What makes some shift while others stick ? Does one have merits over the other ? How does the CIO break the chains of inertia or comfort keeping business interests paramount ?

I believe that relationships sustain themselves in a symbiotic way when the end result is win-win. When either is in a position of compromise, survival instincts will drive the path ahead. This may result in breakdown of existing relationships. Vendors need to keep a watch in such signs before they reach a breakpoint; go beyond transactions to engagement. The CIO on his/her part should constantly engage in an open dialogue with service partners to provide feedback and discuss challenges and opportunities.  It is almost like managing internal teams.

Coming back to fragility of relationships; a bird told me about a vendor warning a CIO for publicly washing dirty linen ! Now that’s a story for another day over a drink.