Posted by: Sarat Varanasi | February 28, 2010

Addressing Unique Challenges in Selling BPO Services

If you are anyone like me who has been in the ITO world for a long period of time and has transitioned or in the process of transitioning into BPO Services, you would know by now that selling BPO services is a completely different ball game as compared to ITO services. In this article, I will focus on the differences in selling high end value add BPO services. While pure play call center type solutions are not easy to sell, they require a totally different skill set, they require vendors to understand and play a lean mean numbers game. Value add based selling in the call centers arena is a much tougher challenge when compared to high end BPO/KPO services where one has to concentrate heavily on the long term strategy and value addition. Some of these high end services might also include a significant amount of process re-engineering (which is the way it should be).

Understanding the process: This is an obvious observation. A successful BPO sale requires a heavy understanding of the clients Business Processes, in depth knowledge of the systems in the process and key pain points at various levels of the clients organization. While we can start at the executive level, understanding the pain points at the end user level is also extremely important. While BPO in general is treated as a horizontal offering, clients expect the vendor to bring in process expertise. For ex: you cannot expect to sell a BPO deal to a healthcare provider if your partners do not have appreciation about the revenue cycle management process or a strong F&A background. You cannot sell a FP&A BPO offering without appreciation for the dynamic nature and customer interactions in the process.

Tip: All BPO deals are transaction heavy. Presenting tools which can help customers manage the transactions by exception and establish, monitor KPI’s always helps the customer. This is where the IT and BPO synergies come to play.

 

Understanding the client organization: In most ITO deals, the ultimate decision authority is mostly the CIO. However, in many BPO deals, understanding the ultimate buyer is in itself a herculean task. It is either a combination of department heads, the CFO and or the COO. In order to appeal to the different buyer segments, vendors have to do a few things

  1. Carefully analyze and identify the key decision makers
  2. Craft a message which shows short term cost savings and long term strategic advantage. BPO deals are generally much longer term in nature and require vendors to clearly portray a strategic vision for long term planning and implementation.
  3. Most BPO processes would require some amount of automation, process improvements. Providers should help clients understand the Synergies between IT and BPO and articulate how IT can help improve process, go beyond the SLA’s and establish new metrics

Transition methodology: The success of a BPO project clearly depends on effective transition of knowledge. Unlike ITO deals where a faulty code can be redone or tweaked, an unsuccessful transition could be disastrous to the BPO project. Clients often want to understand the vendors approach to

  1. Knowledge transition, tools used during the process, duration of the transition, the methodology, the metrics for reporting etc
  2. They would also like to understand the process of re-badging, the specific % of client personnel that will become part of the BPO team
  3. Disaster Recovery and Business Continuity Planning. The processes which are generally transaction heavy and sometimes have high confidentiality /security requirements associated with it require vendors to have a well defined BCP in place.

Breadth and depth of services: BPO has seen the rise and fall of some very small undercapitalized vendors who specialize in a niche area (mostly setup due to the demand they saw at one client). Clients want to know the breadth and depth of the services the vendor has to offer, the number of years they have been in operation, the security certifications/standards vendors hold themselves to and at the same time understand other areas of opportunities.

SLA’s and Metrics: This is a key part of any BPO deal. Clients always have standard SLA’s they would like to measure vendors against. However, the successful vendors always go above and beyond the stated SLA’s and recommend installation of new metrics/automation in the process. For ex: in a recent project where we were measured against AHT (Average Handle Time), we went above and beyond and completely removed manual intervention in the process, introduced new metrics to measure idle time and turnaround time for resolutions. In the long run, this helped us establish ourselves as true partners in the process and gave us an opportunity to expand.

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Posted by: Sarat Varanasi | February 21, 2010

Handling the Pre-RFP customer presentation

The Story so far: Account executives have flexed their muscle, marketing has worked their magic and the CEO and the executive leaders of your organization have done everything they could to establish the C-level client relationship to ensure you are in the short list for RFP.

Now, the all important RFP meet. The client team has sent out a set of pre-RFP questions and has setup a series of meetings with each vendor to make the presentation. I am sure many of you have been in these situations and have handled these successfully. Let us try and examine a few questions that come up during such presentations

How many Vendors are generally selected for these presentations? : Typically it is the same number of vendors who are shortlisted for the RFP. In my 14 years experience, it has been 3-4 vendors and the fact that organization made it to the short list is an achievement in itself. Many factors influence the short list of vendors. It depends on a) number of towers the RFP is issued for b) Cross functional nature of the RFP c)The strength of relationship with the executives d) Outcome of Phase 0 analysis e) expertise of the consulting organization


 

 

 

 

 

 

 

Why do client organizations have the Pre-RFP vendor demo’s?: While most of the decisions are made at the executive level, leaders of the Organization want to make sure the consulting organizations are vetted thoroughly. The Pre-RFP demo is to basically build confidence in the broader organization about the skill sets consultants bring to the table. These demo’s generally can explode in participation. They typically start with a team of 7-8 people and can easily expand upto 30 people. Again this depends on the depth and breadth of the RFP.
What is the structure of the Presentation?: Typically these presentations are pretty long and could be as long as 3-4 hours. The structure generally is

  1. Brief introduction about the company
  2. Options / approach for clients issues
  3. Case Studies / experience
  4. Recommended solution
  5. Q&A

Notice that Cost and ROI related questions are generally avoided in the pre-RFP response. There might be questions around high level expectations on cost savings but in general cost and ROI related questions are not the focus.

Now let us try and examine some key questions that come up during the RFP Vendor Demo if you are bidding for a large project across various geographies and functions.


 

 

 

 

 

 

 

 

 

How would you do this if you were engaged earlier in the game and what is your recommendation: I have seen this question come up many times so far and this can be a very tricky question. However, if we were to examine the question properly, one would sense loads of opportunity. This is typically asked when the client is not happy with the way things are going so far and also wants to make sure the approach this time around is different and more involving. The safest answer to this would be something like ” in the last few projects we have seen…. However, we would like to build the process and approach together with you to understand the current issues, your key pain points etc.” Ideally, getting the homework done through your network before the presentation will help you present a better answer.
How do you propose to handle the Organizational change: A true IT consulting partner is always prepared for this question. The key to a successful IT implementation is the organizational readiness, the adoption of the solution and the buy in from process owners.
What domain knowledge do you bring to the table: Gone are the days when vendors are awarded a contract based on price alone. Clients now want true partners. They want the consultants to possess deep domain knowledge and understanding of client’s business processes. It is always a good idea to take a seasoned process/domain consultant to key client presentations.

Few tips for the presentation

  1. Never have detailed structural methodology diagrams. Remember that you are presenting to hands on people and it is easy for them to pick holes in the methodology.
  2. Always have case studies from the same vertical
  3. Make sure you have built in details for KT and how that is going to be handled
  4. Always have your senior practice leaders present at the table
  5. Make sure the project manager who is going to handle the actual project gets adequate face time and presentation material

What do you think are important in the first meeting – drop in a comment or send me an email vsb75@yahoo.com

Posted by: Sarat Varanasi | February 14, 2010

Qualities of a Successful Consultant

Top qualities of a consultant

Having been in the consulting industry for close to 15 years, One would think that there is a easy recipe for being a successful consultant. I wish there was one. For the most part, it really depends on how you react to situations, the attitude and approach to work and to a great extent the kind of projects you are given an opportunity to execute early on and the opportunities you create for yourself and your clients in the later years. The list below is a compilation of what I have adapted throughout my career and in some cases, what I have learnt the hard way. I have found these characteristics to be very useful and necessary in any client situation.

Empathy: I guess this goes without saying. This is probably the top most quality of any consultant. As a consultant, it is easy for us to say – “Oh the solution for that is simple. We could get his done in X days”. Well, any consultant who says that in the first few meetings is bound to lose credibility and ultimately the client very quickly. It is important to understand the client’s point of view, the organizational dynamics and empathize with the situation. While, the client is looking for examples of how a similar situation was handled at a different client and what they can learnt from it, they are not looking for us to provide a solution right away. The client wants us to show pointers to a solution and drive the thought process. The client wants to make sure we are listening and understanding the situation.


 

Be Yourself: The best thing about being a consultant is you get to work with different clients, beat monotony and innovate solutions. More importantly though, a consultant gets to be himself/herself in any project. No matter how dynamic and challenging the organization is, how politically charged the environment is, the client organization is hiring us to give straight answers even if that means they are difficult to implement. I can still remember standing in a room filled with GM’s, BU heads and Practice leads across geographies in a well established organization few years ago and helping steer the conversation away from dynamics between the groups to building solutions. I have learnt 2 important things from this a) Never be overwhelmed with the situation b) Always be yourself.

Team Dynamics: I have learnt this the hard way – in the early days of my career, I was called up by a PM and asked to join a project. He said “we are behind schedule, the design is not done and we want you to come in and help us out”. Being an enthusiastic consultant and a go-getter, I booked my travel to client site on a Tuesday night, reached there on a Wednesday morning and started working with the client team from Thursday. I ended up working with 2 people on the client team till late Friday night making changes to the document, suggesting process changes and corrections. On my way back that week on a Saturday, I got a call from the client PM saying “Hey, I heard our team members were made to sit till late Friday evening. I know we are late in design but we need to make sure everyone is on the same page and the team is not overworked.” From that day onwards, no matter how difficult the situation, how delayed the project is, I take time to understand the approach and the reasoning behind it. No matter the level of expertise we bring to the table, every assignment is different and the understanding the team dynamics is imperative.

Packaging the Solution: As a consultant, the most important aspect is packaging the solution. While presenting a solution, we have to understand the client’s thought process, anticipate the questions and present the solution before the questions are even asked. For ex: Let us say, the client wants to implement a new financial software, the CIO of the Organization is most likely interested in understanding the issues around change management, overall budget and the technological fit among other things. The CFO might be interested in how the software can help reduce DSO, how it can achieve maximum discounts from vendors etc. The Accountant might be interested in understanding ground level issues like “will it reduce the number of Journals I have to create manually, will it make the reconciliation easier etc.” While we cannot anticipate every single question the client asks, we can certainly anticipate a good % of them, be prepared for it and address it upfront. Even though it might take more time to present a solution, I would rather present to various client groups in multiple meetings rather than trying to address varied groups in one meeting.

Take the team along with you: Well, I guess this is the least a client can expect from a consultant. They want to make sure the entire organization/team is bought into the solution. In the client’s eyes it is not about how good the consultant’s individual ideas are or how good the individual solution is. It is about how much the organization is bought into the solution and how well the team ultimately responsible for implementing and maintaining the solution understands the intricacies, details and complexities. It is about educating and bringing the entire team along and ensuring that majority of the organization is gung ho about the solution.

What have you observed in your career, would you like to add or make changes? Feedback is welcome. You can either leave a comment here or email me vsb75@yahoo.com

Posted by: Sarat Varanasi | February 6, 2010

The quandary of Sales Vs Delivery – or is it Delivery & Sales

Most typical start up consulting organizations are faced with a few questions as they start to expand their organizations

  1. Do we invest in true hunters or do we farm the existing account
  2. Should the delivery people also take responsibility for increasing sales?
  3. Do we need delivery and sales to work together?
  4. Should the executive leadership spend more time on delivery for existing projects or generating more sales?
  5. How do we compensate the delivery team – what % of bonus should be tied to generating sales vs delivery excellence

The straight answer to most of these issues is – a bird in hand is worth 2 in the bush. A project well executed is worth more than 5 projects you are trying to win. As a consultant though, I guess the politically correct answer is – it depends. It depends on various factors like

  1. Financial stability of the organization
  2. The number of clients you are currently nurturing
  3. The breadth and depth of the service offerings
  4. The trends in the market place
  5. Finally –the most important, the attitude, aptitude, approach and the flexibility of your personnel.

 

 

Let us try to answer the 5 questions in a little more detail

Do we invest in true hunter or do we farm the existing accounts: In most cases, if the services you offer are focused rather than being broad, you are most likely to depend on hunters than farming the existing clients. You can take an approach of farming existing clients and growing your portfolio of services but that will end up being a rather lengthy, not so profitable and sometimes even frustrating process. The most important thing to build your portfolio of services is to make sure your delivery on existing projects exceeds expectations and you build relationships with Influencers in the client organization.

Should delivery people be held responsible for sales: I think the better way of answering this question is “do my people have the right skill set to deliver & sell and how what is the bandwidth of the current resources. While the delivery managers might be willing to put in more effort into the process, if they do not have the aptitude or liking to sell, any amount of pushing by the senior executives is likely to result in marginal success. Unfortunately though many companies try to push the envelope with the delivery managers to make things work and get frustrated through the process.

Do we need delivery and sales to work together: in most cases, it is not the question of do we need sales and delivery to work together but it is how much and how well. Raintoday.com says the best tool to sell professional services is case studies. I could not agree with them more on this. In order to sell, you need to have case studies and in order to have case studies, you need to deliver efficiently and effectively. Sales teams can bring customers to the table but it is the delivery teams who make them drink the kool-aid of your organization’s capabilities.

Should the executive team spend more time on generating sales or ensuring delivery efficiencies: The right answer to this is – ofcourse generating leads and closing sales. However, they will be able to do that only if the leadership in the delivery organization is in place. The executive team has to make sure they bring in strong leaders into the delivery organization who understand the intricacies of delivery, who can put processes/ procedures in place and are capable of recruiting the right second level leadership from the get go.

How do we compensate the delivery team: This really depends on the structure of your organization? In an ideal world, there are 3 different people working with the client – the client manager (overall client relationship responsibility), the account executive (true hunter) and the delivery managers. The delivery managers as the name suggests have a higher degree of compensation based on performance metrics and delivery metrics but are also heavily impacted by client profitability targets. The client managers are heavily impacted by client profitability, customer satisfaction ratings. The account executives on the other hand are purely compensated on cash flow and revenue targets.

Posted by: Sarat Varanasi | January 29, 2010

Intricacies of Fixed Bid Projects

5 Intricacies of Fixed Bid Projects

How many times have you heard your Project managers shy away from bidding and executing the fixed bid projects? Fixed bid projects have their own complications but if executed right, they can be very effective for organizational growth and strengthen your bottom line.

Let us understand the 5 factors which can make or break a fixed bid project

Pricing: The most important aspect of any fixed bid project is to get the pricing right. The successful fixed bid projects that I have worked on have had one thing in common. They were never priced without an assessment. In fact, most successful fixed bid projects are those where we have a T&M based assessment. This puts the onus on the client to help the consulting organization define a clear scope of work, builds commitment among the client team members to the project and helps the consulting organization decide the right price, resource mix and the deliverables.

No Better Training Ground: No matter how comprehensive your training program is, there is never a substitute for real work. As the client does not control the staff we put on the project, if the right resources with approach and skill set are put on the project, all fixed bid projects can provide invaluable on the job training or improve your utilization and in some cases even reduce the Turn Around time leading to exceeding expectations. This works really well for companies with dual shore model where majority of the delivery happens offshore.

Tracking Over runs: One of the most difficult aspects of any fixed bid project is not in getting it off the ground but in executing it without over runs. This however can be addressed by a combination of 3 factors

  • Effective internal systems to track the revisions in estimates
  • Strong back office and accounting team to report on revenue over run or under recognition
  • Strong workforce management team to track the utilization of resources
  • Close coördination between corporate teams, BU heads and workforce teams to monitor the revenue trends

Utilization: While fixed bid projects can be a great training ground, they can also be used by Project Managers and verticals to hide resources and show false utilization levels. Many organizations either struggle to realize this or fail to address this during growth spurts. Trying to address this head on can lead to efficiencies and stronger profitability. A strong network of internal systems can provide the workforce managers the necessary information to proactively identify actual resource utilization, compare the resource matrix over time and put measures in place to track deviations.

Missed Billings: In a typical consulting setup where all the billing is handled by back office staff, some fixed bid projects can have missed or delayed billings leading to higher DSO. This is where organizations have to think outside the box. In order to be successful, the PM and Delivery Manager has to be held responsible for billing. They have to indicate when a milestone is complete, send out the invoice to a customer and also be responsible for tracking the receivables. Holding delivery people responsible for receivables is not always a welcome measure but a very effective one.

I found this fascinating quote today:

I was speaking to one of the best upcoming tech bloggers the other day about LinkedIn, and how I view it. To me, LinkedIn isn’t a place to dump a snapshot of where you’ve been. It’s an opportunity to stay connected to people, and to demonstrate where you are now, and where you plan to go next. To that end, I’ve got a little advice for you to consider applying to your own profile.chrisbrogan.com, Write Your LinkedIn Profile for Your Future, Aug 2008

You should read the whole article.

Posted by: Sarat Varanasi | January 25, 2010

Only Way to Grow – One customer at a time

How many times do you remember somebody or something not because of what they did but the way they did it? By now, all of us know that if the service in a restaurant is not good, you can talk to the manager, give them feedback and maybe even get a credit on your bill. However, it is not what credit you get but how they give the credit that makes the difference.

Take this example – I visited Red Robin on 19th evening at around 8:00 PM. The type of restaurant is besides the point. You have to do what you have to do when you have 4 year olds. We got great service from the server but our food was served cold. What happened after I returned back was pretty impressive.

 

There is only one reason I will go back to Red Robin – their personal attention to each customer. Yes, my son will also want to go back..

In this day and age where bad propaganda goes around quickly, the good also goes around pretty quickly. So what can a consulting organization or consultants learn from this?

  • Always thrive to achieve quality
  • If you did not accomplish quality, acknowledge it and correct it – Ignoring it or acting as if nothing happened does not work
  • The end result is important but the approach to end result is equally important

 

Remember – There is only one way to grow the company – Focus on one customer at a time and focus on every customer.

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