Abhijit writes about estimation as being the weakest link in software development. He says:
"Most of the times the people who estimate and people who develop are different, their skillsets are different, and most importantly the business needs and constraints change at a higher frequency. "
Estimation is surely a weak link. Often, sales guys try to sell the project through an estimate. From a management perspective, if you can get the three edges (scope, time, cost) of the 'golden' triangle to meet then you have a successful development project. What do you think is the weakest link ?
Program Management Project Management
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JP proposes the following mantra for buy versus build technology decisions (building something inhouse versus buying a commercial product:
"If the problem is generic use opensource
If the problem is specific to a market segment use commercial
If the problem is unique to your organisation use your own resources"
Buy versus build decisions are often complex with political ramifications.
If you make a build decision, you often need to decide on whether to outsource and if so, what to outsource. When it comes to outsourcing, I use the following broad pattern of thought:
-Think deeply about the role IT is playing in your business today, and where you see it going tommorrow.
-Look at your application portfolio and your people capabilities in relation to the role you see IT playing. That will tell you where your crown jewels are and also point out your capability gaps.
-Use outsourcing to fill capability gaps in such a manner that your own people can polish your crown jewels.
Enough said for a Sunday afternoon!
Outsourcing
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Account management is all about relationships. You can deliver all you want, but if relationships are messed up, it's time to polish the resume- guaranteed. You will get big time escalations over little things. Well ? Did someone say that the little things are the big things when it comes to relationships ?
In some ways it is funny. Relationships, something essentially emotional, should play such an important part in selling something that is thought to be a product of logic. In any type of a complex sale, relationships play a key factor. In account management; it's everything.
OK. Relationships are everything. So how does one go about building them ? One of the keys to building lasting customer relationships is to be the first to give value and to keep giving value without expecting anything in return. Find out what matters to your customer and think of small, incremental and creative ways to deliver the same. Your delivery style should be open, friendly and engaging. Do this, and you are well on your way to building lasting relationships.
Account Management Client Management
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Stephen Lane blogs about outsourcing maturity and talks about creating strategic partnerships with a select group of vendors. From a vendor perspective, what does it mean to be a 'strategic partner'? 'We are your partners' is a much bandied about phrase in software services circles. Short of giving their right arm, vendors would do anything to get the client to call them 'partners'. Believe me, the word 'partner' can be a loaded one. It can mean anything from being a whipping boy to a trusted advisor. Here's are ten questions that could help you figure out where you stand on the partnership continuum.
-How good is your price realization ? Do your fixed price contracts often run into trouble with payments in spite of decent delivery ?
-Do you get to shape needs or do you get resource requirements conveyed to you ?
-Does the client ask for your opinion in matters that concern outsourcing ?
-Are you executing around well defined SLA's ?
-When you make a mistake, does the client show you the contract, or does he work for a win-win solution ? When the client slips up, is it a negotiated win-win or are contracts conveniently forgotten ?
-Does the CIO and her direct reports give you access ?
-Do you know what the forward looking twelve month business plan for your customer looks like ?
-Can you name the top five strategic initiatives in your client's business ? Have you met the executives who run these programs in the last one month ?
-How good is the demand pipeline visibility ? Do you know with a fair amount of confidence what your revenue run rate will be at the start of a quarter ?
-What is your share of wallet compared to the competition ?
The fact is that not every client wants you to be a 'strategic partner'. But it does help to know where you figure.
Account Management
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Here are some of the things that I think make up a good selling mindset. What do you think are the key attributes ?
Pitching Selling
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A salesman's job is to shape needs and generate demand. With the economy in recession, many clients are cutting budgets. Prabhu says there is evidence that budgets are getting halved in several industries. Demand seems to be either stagnant or is taking a nosedive.
Talking of demand, there have been very different times too. Most people of my generation (read oldies!) have seen the Y2K boom followed by the rollercoaster dot com era - dog food selling websites getting valued at billions and then getting dumped at values lower than even their tiny dog food inventories would command. The dot com era also saw the demand for skills like 'digital strategy'. You could download a few articles on B2B and B2C and take a month rehashing them into a nice looking ppt titled 'Monetizing Eyeballs', replete with clouds and arrows and bill at $250/hr while you are at it. Oh! Did I mention fat perdiems ?
Most attempts to understand demand are done from a vendor's perspective. Starting with staff aug and ending with consulting. Co-sourcing and managed services bring up the middle. Makes perfect sense. The only problem I have is that this is a very inward way of looking at demand, it's demand from a vendor perspective. The client simply does not think on these lines. From a client's perspective, there are two broad classes of demand a). Steady state demand (SSD)-The keep-the-lights-on part that is responsible for keeping the business running and b). Transformational demand (TD) that seeks to change the business. Steady state demand, while being unglamorous, provides much the needed revenue stability that comes with an annuity business. It allows you to meet your numbers, build operational relationships and acts as a backbone during tough times. Transformational demand has peaks and troughs, is sometimes based on the whim and fancy of client execs. Tapping into transformational demand needs a different style of engagement, centered on thought leadership and the business domain. It demands that you take a point of view when you talk to customers instead of just asking them "I have great people with me. How can I help ? ". What makes transformational demand most critical is that today's TD is tommorrow's SSD. Here are some key differences between the two streams of demand and some thoughts on how to engage.
| | Steady state demand | Transformational demand |
| Demand Visibility | Typically of an annuity nature and has long term visibility. Visibility is often tied to related transformational initiatives. | Visibility depends on the level of client engagement. Lower levels of engagement limited to operational staff renders poor visibility while a strategic engagement approach leads to much higher visibility. |
| Demand Volatility | Low to medium volatility compared to transformational demand. Downturn in budgets could see positive or negative spikes depending on the client's propensity to right size his own IT organization. | Highly volatile as demand is often discretionary. Economic cycles drive budgets and spending. Clients often prefer to have a greater proportion of internal staff do the work. |
| Strategic importance | Adds revenue predictability and acts as a backbone during lean times. Helps build strong operational relationships. | Best way and often the only way to dislodge a deeply entrenched SSD competitor. TD manifests as future SSD. |
| How to Pitch ? | Commit productivity improvements year on year and lock up demand in the form of multi year annuity contracts. | Do not focus on cost or productivity as a value. Instead, demonstrate thought leadership through a 360 degree approach encompassing domain, people, processes and technology. Key message :"You are at point A now, but need to be at point B and here is how we can take you there". |
| What the client looks for in a partner ? | Flexibility and demonstrated value that goes beyond cost arbitrage. | Thought leadership and business value. |
| Keys to shaping demand | Early entry into the sales cycle. Strong operational relationships and the ability to link cost savings through offshoring in SSD to investments in TD. | Strong strategic relationships and the ability to lead the thought process. |
What are your thoughts and experiences with various demand streams ?
Account Management Client Management Pitching Strategy
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The CIO magazine has published it's annual state of the CIO report. Here are some interesting snippets from the report:
-Strong CIOs don't innovate. They figure out ways to make money for the business.
-Stop talking about alignment. It marks CIOs as outsiders. Strong CIOs work with their peers. They guide them, educate them, persuade them, debate them, hear them, help them, decide with them and execute the enterprise's strategy with them.
-CIOs are of three broad types: Functional heads-who run the IT shop , Transformational leaders- guys who can lead business process change, Business strategists- Works with external customers to develop new business ideas that use IT. No prizes for guessing which category gets paid the most.
-Average tenure of a CIO is about 4 years and five months.
-Only 41% of CIO's report to the CEO.
You can read more at http://www.cio.com/
Corporate IT
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Dhirubhai Ambani is argurably one of the greatest business men in history. I chanced on his orbit theory. Here are some snippets.
"He would often explain that we are all born into an orbit. It is up to us to progress to the next. We could choose to live and die in the orbit that we are born in. But that would be a criminal waste of potential. When we push ourselves into the next orbit, we benefit not only ourselves but everyone connected with us.
Take India's push for development. There was once a time our country's growth rate was just 4 per cent, sarcastically referred to as the "Hindu growth rate." Look at us today, galloping along at a healthy 7-8 per cent.
However, when you change orbits, you will create friction. The good news is that your enemies from your previous orbit will never be able to reach you in your new one. By the time resentment builds up in your new orbit, you should move to the next level. And so on. "
Life
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Here's wishing a great independence day to all American readers. It's time we get independence from a). High gas prices b). Lower IT budgets 
Here are some fonts and pictures that you can use if you want to send your clients a custom email greeting.
Life
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'Consulting'. Sorry, did I type in an expletive? 
I have met more than a few smart and sane people, highly educated and mostly technology savvy, who would puke at the word. Emotions encountered range from a dismissive 'consultants are just gas' ridicule to a more left brained dissection of the lack of value in consulting. At the other end of the spectrum are die hard consultants who laugh equally hard at "execution" and often scoff at the lack of thought leadership in the folks who execute. The truth is probably somewhere in the middle. The last decade or so has seen tumultuous change in the industry. While the IBM's and the Accenture's of the world have focused on re-engineering their back end towards global delivery, India based vendors have focused on getting their front end up to speed. This has lead in turn to multiple flavors of 'consulting' with different organization structures to support and enable. Some companies have gone ahead with creating a separate organization while others have chosen to create consulting divisions within themselves. While there are pros and cons to both approaches, there are two important questions that come to mind while deciding on the organization structure:
-What is your core business and where do you see it going in the future?
-How do you think consulting can help you in getting there?
There are two schools of thought when it comes to these two questions. a). Offshoring is the core business, but this is getting increasingly commoditized. The only way to counter this is by investing in branding and by changing the go to market strategy for my offshoring solutions. Consulting can help change customer perception and give me the relationships that I need to drive and shape offshoring demand at the top management level. b). Offshoring is the core business, and the backend is getting increasingly commoditized. The way to counter this is by differentiating using innovation in the backend and by using consulting to drive a level of backend efficiency that my competitors cannot match. Consulting can also be used to drive the same efficiencies in the customer's IT organization that the vendor has managed to achieve.
Companies that have sought to use consulting to innovate at the backend or help clients drive IT efficiencies have adopted what I would call a "salt and pepper" strategy. A Salt and pepper strategy seeks to use consulting to augment the existing bread and butter application development and maintenance business. Consultants would get embedded into development teams and would participate in upstream activities in the development cycle; activities like requirements gathering and user experience design where a consulting approach would add value. Also certain aspects of the classic IT offshore services mix, like quality assurance have always been traditional strengths. As the industry has matured, better and more sophisticated techniques have emerged to strengthen and differentiate the core offering. Agile consulting is one such example. Vinnie brings out process consulting on both horizontal and vertical lines. Clients are showing a desire to embrace the best of these techniques to improve their own IT shops, spewing consulting opportunities around operational efficiencies and delivery processes. Sadagopan brings out the TCS point of view -"We are strong in assurance services, quality consulting, and in many other areas. We see where and when operational efficiencies come in."
Firms that have chosen to use consulting to further branding and relationships have gone for what I would call a loss leader approach. Consulting is used to expand relationship reach horizontally, beyond the IT organization and into the business side and also vertically, from the middle and senior IT management into the CIO level. The consulting business itself is not expected to produce the kind of profits that offshoring produces, but is expected to change the brand identity of the business from 'offshoring partner' to 'influencer / thought leader' and help sell the core business of offshoring at higher levels in the organization. With globalization and offshoring becoming a business driver in it's own right (as opposed to just an IT imperative), offshoring is becoming a more integral part of the corporate strategy and firms need guidance to get there. A loss leader approach also seeks to provide this level of business consulting expertise. The message seems to be 'I have a successful global IT delivery model, I can help you get to a successful Global business delivery model'. Such an approach also seeks to be a killer of the traditional business consulting model where $3000/day consultants rule the roost.
The core question of whether to keep consulting in house or as a separate business would depend largely on the extent of market and delivery synergies. The loss leader strategy would have relatively minimal synergies on both the market and the delivery side and would call for a separate organization, while the salt and pepper strategy would entail a strong dovetailing of consulting with the core business of offshoring and would demand a single organization.
Indian Business IT strategy
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