“The Power is not in the weapon but in the person who wields the weapon”Bhagvad Gita
A. Where does the power lie in the world of Analytics and Planning solutions ? Not in technology anymore
Have you noticed that Tech consulting companies like Accenture and Deloitte have practices focussed on certain third part Supply Chain solutions ? These practices help their clients leverage those solution in their business operations. Often, these providers (Accentures and Deloittes of the world) make much much more helping clients leverage that solution optimally, than the solution provider itself makes via licenses etc.
Simple- the solution, by itself, is plain technology (even though the generic market term is “solution”). And since it is plain technology, it is a commodity. It is a commoditized enabler whose value is realized only when it is used to create a solution. And with technology evolving so fast and new solutions emerging every day, the analytics and planning solutions market has never been more commoditized.
That brings me to the first aspect. Solutions, in silo, are mere technology and commodity. In the mere form of “Technology” , they have no power.
Revisiting the example above, the power is in the hands of those who help leverage their clients make the best use of the commodity (technology). And hence, they charge a premium for this power. Many solution providers realize this and are setting up their own implementation teams. If they are not, they should. That is where the $$$ will be few years from now. And also, as you will see in a subsequent section, that is what will help you build the stories to differentiate your solution offering. If you are a large solution provider, Setup an in-house solution consulting team and you can extract much more value from your product (in terms of $$$).
B. Are platforms the answer ?
I have insisted in many of my posts that platform solutions always have more “differentiating” capability than siloed solution. That is why providers with offering suites are much harder to disrupt vs specialized providers (like network design, WMS, TMS etc.).
Note: When I say platforms are the future, it applies to both businesses as well as solutions providers. (To understand my perspective on businesses operating on tech platforms in the future, you can refer my this article: https://smartsupplychains.ai/2020/08/14/techcpg/)
When Coupa made the Llamasoft accquisition, many were wondering why a spend management solutions company was accquiring network design, enterprise AI and demand management solutions. I made a post on linkedIn (link here: https://www.linkedin.com/posts/kumarssingh_coupa-acquires-ai-powered-supply-chain-design-activity-6729085999554600960-J_x3) indicating that it made perfect sense. They are trying to build a solution “platform”.
So whether it is SAP accquiring Ariba or Coupa accquising Llamasoft, the future of solutions is in integrated platforms. If you look at SAP suite of products, together they create a complete ecosystem (if one decides to chose only SAP products). Disrupting a player like that is difficult. Remember, integration of disparate systems is still not seamless and will not be that way for few more years. If in that chaos, where organizations are sometimes forced to build a portfolio of tools from multiple providers, a platform will always have an edge over siloed solutions.
But the challenge is not mitigated. Platforms are difficult to develop but still, even developing them has become relatively easier. So sooner or later, we will see end to end platforms emerge as well. Since I wrote this post in continuation of my LinkedIn post on design thinking and why tech solution itself has no differentiator (link here: https://www.linkedin.com/posts/kumarssingh_analytics-datascience-data-activity-6750275253840216064-tt5o), let me lay the second aspect of the discussion here:
Even though end to end platforms are more challenging to develop, they still are a technology solution.
With every other integrated platform having similar capabilities (some develop it sooner than others, but evenually at some point, many are similar behind the curtain), even with platforms, you will end up running into the same “differentiating” problem.
C. And that is why you have to build your own narrative of your product – THAT is the power of your solution
And this is where we get into what exactly will be the differentiator for these providers. The differentiator will be the story of their products and brand, the differentiator will be storytelling- whether scouting for new customers, farming existing customers or building an intellectual brand- storytelling will be THE most important thing for solution providers in this coming decade.
They can build this around initiatives undertaken internally (in-house solutions consulting teams as indicated above) or through implementation partners who have helped their clients implement these solutions.
But when I say storytelling, many often confuse it with the plethora of case studies that I see solution providers float. That is one aspect of storytelling but remember, if you merely indicate in a case study that you reduced inventory by x%, someone else is sharing somewhat similar percentage reduction. With the technology platform not being a differentiator, how do you make someone opt for your tool in the increasingly crowded marketplace ? How can a customer find your story, even when you are not actively sharing your story with them ?
D. There are many versions of your story
So there are three aspects of your story that the client wants to see:
- D.1 The Story of your capabilities and expertise that are specifically relevant to the client’s unique solution
- D.2 The Story of your capability and expertise that your employees create (knowingly or unknowingly)
- D.3 The story of what you have done for other clients (which is what everyone relates to when I talk about stories. This is being done but not in the way that differentiates one provider from the other)
And we will discuss the first two aspects of stories, D.1 and D. 2 since they are the most critical (in my opinion). I plan to write a seperate article on D.3.
But before that, let us touch upon something important to build a background.
Marketing in the Digital age is no longer a “barrier to entry“.
Think about this – all the rankings and evaluations of solutions that are out there, they existed because a couple of decades ago, you did not have enough information publicly available except for what the vendors provided you. Today, if you have time and are really interested in digging, you can easily find a ton of information about these solutions.
So the direct marketing material today is very close to have a “minimal” effect, if not no effect. I mean you can create jazzy webpages, videos and brochures about some “Revolutinary” AI solution but so can everyone now. Creating Digital Marketing content is cheap (if not free for many types of content).
The only “barrier to entry” betwen new solutions and hairy old ones that still remains is the old “relations” that their sales people have. Within this decade, that will go. Unfortunately, I see many solution providers are not prepared for it- and they WILL go too. That will happen by someone accquiring them and making them an “also have” in their portfolio. The life cycle of a tech solution has already accelerated exponentiallly and the archaic ones that acted like dinosaurs by not trying to evolve (and instead relying purely on “relationships” and legacy marketing materials), will become extinct.
Baby boomers are the last generation to carry the archaic, “pure” relationship based selling approach
Note that “pure” is the keyword. Of course even if the solution is best in class, a relationship is always a must have to facilitate selling. But if your product is lacking, you will not be able to peddle it after few years purely on relationships now.
Companies are constantly under threat of disruption, trying to sqeeze everything from their investment, and investment decisions are constantly being questioned. The fact is, any Supply Chain solution investment decision based solely on a “relationship” in this age of open information and innovation may end up ruining careers now. People who approve invoices for any type of solutions and services are becoming more demanding but “The worse is yet to come” 😉 As I have mentioned recently in my posts, we will see many failures around mid of this decade of “digital transformations” done in last few years. Heads will roll. In ~ 5 years from now, organizations gasping for real innovative solutions and trying to make sure every penny is invested wisely, will tear through any false narrative to look at the real value.
Remember that I am not undermining the importance of relationships. It is THE most important requirement today, that I emphasize in my posts. Relationships need to be leveraged to drive innovation through collaboration in today’s age. That is the true beauty of relationships, internally and externally. The “You scratch my back and…” form of relationship can be dangerous for your career and for your organization (unless you plan to retire within this decade).
Remember that digitalization of businesses means that these solutions ARE your business processes now. And a botched implementation means you essentially jeopardize your business and it can follow an executive’s career for rest of their professional life in an age where one of the most important criteria (in my opinion) for a Supply Chain executive is the ability to drive successful digital transformation during the decade. So stop scratching backs and focus on your career and organzations.
By the end of this decade, you can actually establish a whole business around helping technology solution providers create solution based selling approaches.
So with this background, let us start understanding the two types of stories mentioned above in a bit more detail.
D.1 Creating unique stories
While human brains are wired to love stories, an important aspect of story in our world is the context. In the business world, your solution’s story is not about creative writing (though it does play a small role). Your story is about creating real world stories- the narrative part of those stories, whether written, video or infographic, is easy. The key is- how can you create stories that the ecosystem (current clients, prospective clients, analysts, Industry) would love. That is called context. And context will come when you understand how to weave strategy, psychology, processes, people, creativity, communication, organizational behavior and emotional intelligence, with technology.
One story is the story you showcase (knowingly) to your prospective or current clients. This story gets threaded together (in your client’s mind) through various aspects like client presentations, RFP responses, pilot projects, previous work done with them etc.
There are many different ways you can build these stories- but to build those stories you need to build the expertise. That expertise is the people who can come together to help build that story for you. While there are many different ways to build that story, let us use the “Design Thinking” approach that I shared in one of my LinkedIn posts.
If you have say a new age demand planning solution, how do you currently sell it ? The “baby boomer” approach is that someone pitches it to VP based on a previous relationship- and let us assume it gets implemented.
The problem is- that VP does not use the tool at all. And the harsh truth of business is, most of the users who will actually use the tool in their day to day work, have the least say in these solution procurement decisions. Now no one complained a couple of decades or even a decade ago but today, that will soon snowball.
So how can you start ? Start with the “Empathy” section- before you pitch anything, try connecting with users in that organization who are currently using a product that you believe your product can replace. Find their pain points (like, they may tell you: I don’t know how this tool calculates safety stock, it is always off so I calculate my own numbers), to determine how your solution can address that.
Next comes “Integrative thinking”. While demand planners may be the primary user of this painful tool, bad planning numbers always have cascading effects. Think about various ways this can impact other teams-connect with those teams to incorporate their pain points.
Now I will not go through each and every point but you can see what you are building up here. By the end of the exercise, you will have a story. A beautiful story of the everyday life of what many in that organization’s Supply Chain function, across teams, face because of a sub-optimal planning tool. And this narrative becomes the core of your story.
The gist is, no one now wants the specifications of your products, no matter how long you have existed. If that is the only story you have-you are very close to being obsolete and being disrupted in today’s rapidly evolving world of technology.
D.2 Your employees and talent are the most critical part of your story
In the section “Marketing in the digital age”, I indicated that there is so much information available for free these days, for which you would have paid millions a couple of decades ago. So coming back to that- one of them that has worked for me is to evaluate what type of vibe employees of these companies propagate. Thought leadership, interactions on professional social media, seminars, conferences- all that is also your story.
If you already do not have a social media strategy for your management (entry, middle or upper) level employees, develop one asap. No matter how hard you work to build jazzy webpages (which are also obviously important since anyone researching will indeed end up landing there), it is easy to perceive the actual expertise via interactions of your few employees and by digging around. And this perception may not always be the reality. We are all unknowingly building a brand 24 X7 now and that applies to individuals as well as companies. That is how it works and will increasingly become more and more prevelant. Just one employee can destroy your entire intellectual worth just by association and their one careless perspective.
So you need to have a policy around the story your employees will propagate on professional social media, conferences, seminars etc.
Irrespective of how established you are/were in the the digital solutions space, today’s digital age makes everyone a newbie in shorter increments of time, due to advances in tech. You HAVE TO keep establishing the story of your expertise and intellect through EVERY possible channel.
There is a detailed approach that solution providers need to use to build a “social media story policy” for the upper and middle echelons of their organizations but that is not within the scope of this article. The gist here is- unknown to you, your employees are propagating your story (good and bad) and it WILL eventually impact you at some point.
Then there is Webinars and conferences. What stories you pick (The D.3 type of stories mentioned above, on which I will elaborate in a separate post) and how do you present them. I will cover them in detail in a seperate post but the short teaser is that you really need to go beyond the numbers (% reduction) and speak in the language of both functional practitioners (who worry more about their functional pain points) and to executives (who are focussed on the bottom line).
So keep an eye on my article for this aspect of the story.
Views expressed on this blogsite are my own and may not represent the views of my employer.