Tuesday, October 24, 2017

How to Cost Justify Replacing a ‘Free’ Legacy Technology

Keith Unterschute, Mainstay

Anytime you have a seemingly “free” legacy technology environment where operating costs are low and few capital investments are planned, it can be extremely hard to cost justify moving to a new technology that at a minimum will require substantial capital costs.

The fact is, when you compare the cash flows of the old and new environments, the ROI for the new one rarely pencils out to satisfy your average fiscally focused CFO. Significant spending compared to little spending just doesn’t make sense to these check-writing executives.

However, I’ve found that by following a two-pronged strategy, you can often overcome this seemingly insurmountable barrier.

Prong #1: Leverage the Time Value of Money

The first strategy assumes that something has to change. The company simply can’t operate forever an unsupportable technology. Usually, IT approaches end-of-life (EOL) and end-of-service (EOS) technologies by chipping away at the problem through gradual replacement over time. This piecemeal approach eventually gets you there, but since the transition is drawn out, it often leaves a lot of savings and value on the table. Quantifying those gains can help accelerate a larger investment.

Take voice systems. Typically, even with EOL or EOS PBX systems, companies won’t want to invest in more PBX systems to replace them. Modern Unified Communications (UC) technologies are the best alternative, but fiscally conservative companies might prefer to replace its old systems in a gradual, ad hoc fashion.

In reality, though, a rapidly deployed UC platform can deliver operating benefits faster than stretching out investments over a longer period of time, and ultimately result in higher ROI. The reason is simple. Companies that invest in a comprehensive solution start to realize operating savings from the new technology almost immediately. The time value of money works in favor of the fast-deployment approach and yields more total value over the same time period.

All of this adds up to a compelling argument for a rapidly deployed replacement of the company’s entire legacy voice platform, versus a drawn-out ad hoc replacement strategy.

Prong #2: Build a Strategic Business Case

The second prong of this strategy is just as powerful: Build a convincing business case for the value of the new technology. It’s true that many CFOs will characterize these non-monetary value propositions as “soft benefits,” which means they’re difficult to measure and not assured. However, many CEOs will view them favorably, especially when they align with the company’s overarching business objectives.

When communicating the value of technology investments to business leaders, it’s important to stay clear of technical jargon. Be sure to tie your messages to the company’s strategic objectives, and use a business language that C-level execs understand.

Articulating use cases can be a big help. This is where you describe in detail how things are done today and how they would be done in the future. The best use cases examine areas of the business that are critical for generating revenue and describe a critical process that’s needed to enable a successful outcome.

This strategy directly addresses the concerns of the CFO – that is, it focuses on the real cash value of the new investment. And it also addresses the CEO’s top priority: achieving the company’s business objectives in the most efficient way possible.

Even if your business case only shows a break even -- or even less than break even – financial result, it can still be approved if your proposed investment effectively advances the company’s strategic business goals.

The Five Habits of Highly Effective IT Organizations

L. Venkatraman, VP - Value Engineering and CIO Services, Mainstay

If you work in an IT organization, here's a real-world story you will be all too familiar with. A large hi-tech consumer goods company with over 40,000 employees and 100 global locations rolled out an enterprise-wide upgrade to Windows 10. Despite facing a super-tight budget and an impossible deadline, the IT team came through. The rollout achieved almost 100% user adoption, with IT going above and beyond to maintain great service levels.

Success story? No doubt about it -- if you talked to the IT folks.

But then the IT team sat down with the COO. As the VP of IT went through slide after slide of impressive metrics on budget, timelines, and adoption, the COO stopped him in his tracks with a single question:

"Why the hell does this matter to our company?"

Talk about a rude awakening. But the question was spot on: IT was not adequately communicating the "so-what" of IT initiatives in a language that business people could understand. Not only on this project, but across the board.

This is a real missed opportunity for IT. Why? Because in the age of IoT, where new technologies like telematic and sensor data, AI, big data, and robotic automation are transforming businesses, IT has never been in a better position to add tremendous new value to the enterprise. For the first time, IT organizations can become true strategic enablers for their company -- if only they can effectively quantify and communicate the business value they can generate for the rest of the organization.

A survey in the latest Gartner CIO Agenda report1 shows that IT-business alignment and budgeting issues are the top barriers to IT becoming a “resilient” organization. The Pulse of the Profession report2 by the Project Management Institute backed up these findings: 37% of the respondents said they lacked clearly defined objectives to measure progress; another 37% suffered from poor communication; and 9% had insufficient funding. The report suggested that because of these shortcomings, 28% of strategic IT initiatives were deemed outright failures.

Why can’t IT overcome these barriers?

In our experience working with CIOs, IT organizations that learn to become strategic enablers practice the following five habits:

1.      Prepare a formal business case before launching your IT initiative. This means clearly forecasting business outcomes, such as increasing revenue, decreasing cost, improving productivity, creating competitive differentiation, and enhancing customer satisfaction
2.      Communicate how those outcomes will be delivered, and what features will drive them. Developing realistic use cases, highlighting specific business processes, and clearly describing how features will improve them – all these things will lend credibility to your claim of adding business value.
3.      After the project, measure and report the actual value delivered. In our experience, we find that while a majority of IT organizations prepare formal business cases for their IT investments, very few of them track and report the value from those investments in a quantifiable manner that highlights the business impact of the project.
4.      Communicate, communicate, communicate. Use all the modern methods of communication (and some traditional ones) to get your message across, including in-person meetings, emails, posters, intranet sites, social media, QBRs, and more.
5.      Keep it brief and use a lot of visuals. Research by HubSpot3 indicates that when people only listen to information, they retain only 10% of it three days later. But when that same information is presented visually, retention jumps to 65%. Remember to keep your visuals simple. Too much information can become a distraction.

Sure, there are some IT organizations out there that leverage a few of these techniques. But it’s hard for most organizations to make a habit out of doing all of them well. They need to learn to turn all five habits into a repeatable practice backed by set processes, frameworks, templates, tools and guidelines.

So how do you make these five habits stick? How can you create a program for business value communication that consistently makes your business leaders go “Ah-ha!”?

Put another way, how should the VP of IT have responded to the skeptical COO’s pointed question about the Windows 10 upgrade?

If you work for an IT organization, I’m sure you have some great ideas, and I’d like to hear from you.

In my next blog, I'll outline some of the things leading CIOs are doing to instill these habits across their teams.

Stay tuned.

1 http://www.gartner.com/imagesrv/cio/pdf/Gartner_CIO_Agenda_2017.pdf
2 https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/pulse/pulse-of-the-profession-2017.pdf

3 https://blog.hubspot.com/marketing/power-of-visual-communication-infographic

Friday, August 18, 2017

Show Me How

Dan Corcoran, Chief Technology Officer & VP Sales Enablement, Mainstay

“I come from a state that raises corn and cotton and cockleburs and Democrats, and frothy eloquence neither convinces nor satisfies me. I am from Missouri. You have got to show me.”

Popular reckoning credits this quote by Congressman Willard Duncan Vandiver with coining Missouri’s unofficial motto as the “Show Me State.” The Oracle of Omaha, Warren Buffet, is famous for insisting that he’ll only invest in what he can understand. Maybe it’s a Midwestern thing, but as a former Ohioan, I find the most important part of deciding Why? is understand the implied HOW?

Process improvement ABC saves 77% in labor costs over five years!

Solution XYZ reduces infrastructure spending by 48%!

Save $500,000 a year in power with smart building solution N!

These are the kinds of statements that companies write entire value messaging campaigns around. At first glance they appear quantitative because, you know, numbers=smart. But try to unpack them and the logic unravels fast. Why 77% and not 42%? What factors led to this savings or improvement? What factors enable or endanger similar results in my business?

Let’s assume for a moment that all of those “quantitative” value statements are well researched, supported by large data sets and adjusted for you as the specific audience. It. Doesn’t. Matter. It doesn’t matter and they are no more true if the consumer of this information can’t understand the HOW that underlies these justifications. And that’s because they are not justifications, they are outcomes. And outcomes are meaningless unless you understand HOW to replicate them.

This is why quantitative modeling is at the heart of every Mainstay asset. Whether we’re writing a whitepaper, collecting data for case studies or infographics, or building justification tools for sellers, we always start with a model. Modeling is a great way to really explore your value proposition and its something anyone with the most basic Excel skills can do effectively. Basic arithmetic is usually all you need to calculate just about any kind of business benefit. Modeling can also be a great way to address the BS factor that can sometimes scuttle the best intentioned value messaging efforts. If it won’t float, you’d rather know now than have your customer challenge you on it later. 

Models don’t have to be fancy, they don’t have to look pretty. The point is to identify and demonstrate cause and effect. Start simple and add complexity as it becomes necessary (and if it doesn’t, don’t). No matter what you’re selling, using quantitative modeling as a starting point for crafting your value proposition just makes sense. In fact, this model often becomes the genesis for multiple important assets, because no matter what result you get, it’s important to understand how got there. And remember, show your work! Because if you can’t explain it, Warren ain’t buyin’. 

Thursday, July 20, 2017

Consulting As A Sales Strategy

By Keith Unterschute, Director of Consulting Services, Mainstay

I have worked in both sales and consulting during my decades in the technology industry. In both positions the goal was to understand what problems the customer is trying to fix. For sales, the path of least resistance was to focus on selling products that the customer is actually interested in buying. Even when management wants you to focus on relationship selling, they still want you to sell something. As a consultant, you need to gather similar information but often for very different reasons. However, both consultants and salespeople are seeking the same thing: to provide value to the customer.

But in spite of having similar objectives, sales reps and consultants interact quite differently with the customer. If you’re a sales rep, your prospective customers are often a little skeptical of your motives. Although your pitch may be that you want to help them solve their problems, that lofty goal is tarnished by the fact that, at the end of the day, you want to sell them products. If you’re a consultant, you also want to solve the customers’ business problems, but you’re not getting paid to sell them something. Instead, you’re paid to give them unbiased recommendations and tools to help solve problems. For this reason, consultants are typically viewed as more trustworthy.

How the customer perceives you often determines the nature of your interactions. On the sales side, the customer tends to be cautious when divulging their realities and needs. The thought is that even if your product isn’t the best fit to resolve the problem, the sales rep will try to sell it to you nonetheless. By contrast, in most consulting engagements, customers know that the more information they’re willing to divulge, the more value they’re likely to receive at the end of the engagement.
During the times I worked as a sales rep, I often wished for a customer who completely trusted me. But no matter how trustworthy I may have been, to the customer I was always viewed as just a sales rep, so they always nurtured a seed of suspicion. Later, when I took job as a consultant, I was amazed at how much more open and trusting customers became when they knew their openness would positively impact the value I could deliver.

At Mainstay, we have been bringing the power of consulting to add value -- not only for customers, but also for technology vendors. In fact, many of our clients are technology providers that, as part of their sales strategy, sponsor business case studies for their prospective customers. Thanks to our objective, fact-based consulting approach, customers feel confident these studies are truly unbiased, and they genuinely appreciate the tangible value the vendor is giving them through the engagement.

Our business-case engagements allow us the opportunity to interview people outside of the IT organization, including business executives who the sales teams may never have access to. Our goal is to uncover specific technologies that could help the business achieve its strategic objectives.

Armed with this more strategic, business-focused analysis, IT organizations are able to present their case for funding new technology projects in a far more effective way – one that is likely to get the attention of business leaders and key decision-makers. Bottom line: the vendor’s sales team gets greater insight into the non-IT stakeholder, the IT department gets a better way to communicate to get the budget they need to solve real problems, and the business gets a solution that supports its high-level business objectives. Everyone wins.

Friday, March 3, 2017

The Future of Use Cases

By Keith Unterschute, Director of Consulting Services, Mainstay

I have to admit that there have been more than a few times in recent years when I struggled to understand how an emerging technology would actually change the world. In the early days of smartphones, for example, even marketers struggled to think of applications that would make the phone truly revolutionary.

Sure, you could do email, text messaging and maybe web browsing on these phones, but that is where our imagination ended. In many cases, the reality of the future just doesn’t map to our efforts to envision it. In the case of the smartphone, my imagination was limited by what I knew were current limitations that existed in the technology.

Fortunately, we have “use cases” – a commonly used business analysis technique that illustrates a specific business use of a technology’s capability – to help people quickly understand the value of a particular technology. It’s a powerful way to overcome our imaginative shortcomings.

The beauty of the use case is that it often doesn’t look too far into the future. In fact, one customer’s future is another customer’s past. A great example is a technology as simple as instant messaging. You would be surprised at how many companies still don’t value an enterprise IM solution.

IM often gets introduced into enterprises because their own employees go to work from the future, their own personal lives. They start to use it to get things done at the office because they have been using it to get things done at home.

Let’s take a closer look at the humble instant messaging app. How on earth can this simple app do anything to really help a business? Isn’t it just a more primitive way of talking on the phone and certainly inferior to phone conversations?

Perhaps not. Most of us now know that IM is the preferred mode of communications in certain situations. IM lets you ask a quick question – and get a quick answer-- without the need for a lengthier conversation governed by rules of etiquette. IM has its own, more efficient etiquette. Quick answers to simple questions can be critical when time is of the essence.

A great use case example is found in medical environments where case managers (those dealing with insurance companies in behalf of a hospital or patient) may only have 24 hours to build a better case to overturn a denial of coverage. These cases are built on physician input, and you can’t afford to burn 12 hours waiting for a very busy and mobile doctor to get to their email or voicemail to respond with a simple yes or no answer. Putting IM on his or her mobile device with the understanding that messages in that form require a fast response can make all the difference for the case manager -- and ultimately for the hospital and patient.

So, if you want to sell the idea of an enterprise IM solution to a non-tech-savvy business executive, consider presenting it in the framework and language of a use case. Instead of jumping to the conclusion that it will only waste employee time, the executive will clearly see the tradeoff between time and money and make a smarter investment decision as a result.

Tuesday, January 17, 2017

Including RFP’s Into Your Customer Success Program

Author: Mateo Miramontes, Mainstay Business Value Consultant

For years Mainstay Company has been the go to place for the world’s leading tech firms when they need a clear and effective way to reach new customers. Whether it be whitepapers, infographics, videos, blogs, Mainstay has the ability to take content and break it down into assets that can be digested by all decision makers. With the release of “Competing for Customers”, Mainstay has shown how their ability to reach prospective customers can also work for current customers.

With the push to dedicate more time to current customers, Mainstay has been asked to assist in the complex world of RFP’s (Request for Proposal). Companies have reached out and asked for help in renewing contracts of their vital customer base. This move has brought a new challenge for Mainstay but also for companies who have long relied on large proposal documents that mirror reports sent to prospective customers. Change is not always easy but as Mainstay’s customers have learned, there is a better way.

To make a RFP more effective, Mainstay relied on its efficient and direct method of gathering and presenting information. Cutting filler information and relying on the data to tell the successful story of the solution proved to be the best way to reach decision makers and map out the true value. What seems like an obvious approach to this process actually presented a change in philosophy and for those who trusted Mainstay in this change, find themselves not only renewing valuable contracts, but also improving their relationship with their customers. Decision makers appreciate the direct approach and many are impressed with the value they have received and the future possibilities. In 2 pages, Mainstay can show that the grass is not always greener on the other side.

The reality is the RFP process is a costly and time consuming endeavor for a solution provider. But that cost is minimal when compared to the cost a customer might incur when switching a solution that might require massive hardware and software changes. By outlining the cost avoidance in renewing with a solution that is providing great value, Mainstay has shown the ability to effectively communicate the entire picture of the RPF process to those who will ultimately make the decision.
Mainstay has always been able to provide efficient and effective assets to every level of a company’s management team. Adding the RFP process to the stable of areas that these assets can be used in is a natural move that has proven to be effective in the new business world of customer satisfaction. A long standing client of Mainstay commented:

“The quality of work delivered by the Mainstay team is second to none and truly frames our Organization’s value against our competition in the format of what it means to the customer. We heard from the evaluation committee that "We got it" in regards to our proposal. If we are fortunate enough to be awarded this $11M TCV business, it will be directly correlated to Mainstay’s efforts.”

Please contact us at www.mainstaycompany.com if your organization needs help finding new ways to reach your customers and guarantee that they become loyal customers that you can rely on. 

Friday, September 23, 2016

Evolve Your Data Storage

Author: Mateo Miramontes, Mainstay Business Value Consultant

Let’s face it, today’s business environment is all about data. The coined term “Big Data” is a feeble attempt at describing the vast amounts of data that companies gather in order to understand buyer trends and gain a competitive advantage. Analyzing all of this collected data becomes a key activity because the reports produced from the analytics are used to make important strategic decisions. The question becomes, how are organizations storing this data and how are they able to access it quickly and securely in order to use it to benefit its customers an increase their bottom line?

We have all heard about the “Cloud” and its ability to store information and allow access from anywhere, but with security being a top priority for most companies, it’s not a viable solution. Good thing it’s not the only new solution for modern data storage. Many companies are realizing the benefits of all-flash array storage. All-flash array or AFA storage is the next evolution of hard drive storage. Out are the spinning electromechanical disk drives that stored data, and in are solid state drives (SSD) that contain multiple flash memory drives. SSD’s have no moving parts allowing them to be erased and reprogrammed in blocks which creates a high availability storage center that is not only fast but has unprecedented efficiency.

Many organizations have seen the multitude of benefits from switching to AFA storage. As more data is collected, does your organization want to continue to invest in rows and rows of servers with traditional disk drives that continually break down and create performance issues, or do you want to evolve with technology?

A few of the many benefits of an All-Flash Array Storage
  •         Increase data mobility speeds and allow data to be shared and accessed across your entire organization
  •          Eliminate latency as more users access data
  •          Allow IT to focus on strategic initiatives instead of storage device maintenance
  •          Support real time analytics for faster reporting and strategic decision making
  •          Reduce storage device footprint with fewer racks and decreased power consumption
  •          Reduce replacement and expansion costs
  •          Increase time-to-market

Mainstay Company has calculated the benefits that AFA has had on many organizations. Solutions such as the ones offered by Pure Storage have increased organizations ability to serve its customers while decreasing cost and strengthening data security.  For more information about how AFA could benefit your business, contact us at contact@mainstaycompany.com