11 things to consider with complex software purchasing in 2020
May 20, 2019
How do you navigate complex software purchases and improve speed to market? (Part 1 of 3)
The software buying experience has changed
The emergence of Software as a Service (SaaS) has fundamentally influenced sales and marketing, as well as impacted buying behavior. “Trial periods” and “proof of concept” roll-outs were rare previously.
Amazon, Netflix & Apple have conditioned consumers to expect a good experience when buying software (not just using it). Business customers now want this same experience in the professional realm:
- Feature rich websites
- Seamless integrations / set up
The buying experience is changing for the better, but the biggest challenge is often in understanding, and more importantly agreeing, on the problems within the organisation. Part 1 of a 3 part series, in this article we'll look at ways to identify this and how to turn this into action.
How do you diagnose the problem areas within an energy supplier organisation?
More stakeholders, more problems. Procurement in large organisations is inherently complex. Asking multiple stakeholders for an opinion on the business’ needs can often release the floodgates. CEB Gartner suggest that there are 7.8 stakeholders involved in the average procurement exercise, although enterprise operations are likely to include many more.
But what is the problem?
Whilst this may sound easy, many organisations struggle to focus on the root cause of their issues. Instead, companies point to the surface level pain points. The complexities of the retail energy industry can exacerbate this, due to sprawling operations that may span across multiple systems, departments, or even geographies.
What can you do to clearly define the problem?
- The 5 Why’s? – an iterative, interrogative technique used to explore the cause and effect relationships underlying a particular problem. The primary goal of the technique is to determine the root cause by repeating the question "why?", five times. Each answer forms the basis of the next question, until a focused answer is reached
- Assigning a senior level / board sponsor may also help for ‘focus in’ sessions and to drill into the key points
Identifying potential competing needs within the business
Using techniques to define the problem is the first step. But how do you prioritise to make sure needs across these different sections of the business are met?
- The Moscow Method – a prioritisation technique that helps to reach common ground with stakeholders. It focuses on the importance held on the delivery of any given requirement. MoSCoW is an acronym for Must have, Should have, Could have, and Won't have.
- Promote a “meritocracy” where the best observations / ideas win. It should NOT be who shouts the loudest. Try to ‘steelman’ (not strawman) each suggestion - build up and iterate each proposal / suggestion until it is the best it can possibly be - then review each case on merit.
- Once this prioritisation is done - establish a timeframe.
What do you want to be possible and what is actually possible within the software space?
You now know what you need to do and you’ve prioritised where you’re going to start. Before you do though, it’s good to understand what’s happening in the market and what is genuinely feasible to achieve with the software available and future road maps. What other factors do you need to consider before you go ahead?
- Market analysis will help to gain an understanding of what is feasible (within the timescales you have set out).
- Understand whether the ambitions of the project are realistic in relation to the budget.
Framing the problem and gaining buy-in
The business must not only understand the problems / needs, but the context within which they exist. This is important when gaining internal buy-in from your organisation.
- Investing for growth VS keeping up with competition?
- Cutting cost / improving efficiency VS new services / revenue streams?
- Consider which of these issues really speak to internal stakeholders?
Planning for the future and being prepared
The needs of the business will continually fluctuate due to the competitive landscape, market conditions and access to capital etc. This need for flexibility should be fixed in your mind when assessing your options:
- What benefit will a change bring right now?
- Will the change address requirements for the future when as the competitive landscape evolves?
Understanding the competition and where to gain leverage
Whilst the competitors actions shouldn't form the basis of a businesses strategy, it's important to assess and course correct accordingly:
- Are competitors attempting to significantly erode your market share with innovative new products and/or software?
- Is your business looking to enter new markets and significantly erode the market share of others?
- If so, how would the business do this? Will the change enable the business to be a market leader?
The importance of timing.
Like many industries, the energy industry is subject to seasonality and is highly cyclical:
- Factor in the time it takes to coordinate the army of stakeholders that may be required to push a change through.
- Consider the impact of busy periods and the effect software implementation may have and the time it may take to train staff.
The big question. What is the cost of moving forward?
In a competitive landscape where margins are under pressure, protecting budgets is of paramount importance. A business must consider:
- Can we afford it? Can the cost be spread over time?
- Will internal stakeholders sign-off on a project at this time?
- Can we execute on our vision and avoid just papering over the cracks?
The cost of inaction. What will happen if you don’t move forwards?
With uncertainty and volatility in the market, it is tempting to batten down the hatches and attempt to weather the competitive storm. Some may hope cash reserves and existing systems will see the business through, until more favourable conditions appear. However, there are no signs of new competition slowing down and the race for ever more creative software propositions continues; a business must ask whether they can afford NOT to change.
- Are competitors quickly gaining market share?
- How long can investment be deferred?
- Are current poor / inefficient processes harming the business in the meantime?
The techniques mentioned here aim to focus thinking on how to best identify problems within your organisation and that may lead to software changes. They look at how a structured collaborative approach can help where many stakeholders exist. If the questions asked here are dealt with thoughtfully, a compelling business case should begin to appear and have a higher success of sign-off.
With the ‘WHAT’ now defined, a clear view of the problem, alignment with internal stakeholders, and a plan that moves the business forward - the next step is to address the ‘HOW’. In part 2 of 3 in this blog series we’ll explore the ‘buy vs. build’ question and how you can turn the plan into action.
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