Webinar: Beating Commoditization by Building High Value Solutions

Beating Commoditizationby Building High-Value Solutions November 16, 2011 Webinar sponsored by: International Society of Automation Presented by: Nikki Fisher, Principal, Solutions Insights Matt Leary, Principal, Solutions Insights

About ISA● International Society of Automation – Founded in 1945, based in Research Triangle Park, North Carolina – A leading, global, nonprofit organization that is setting the standard for automation – More than 30,000 worldwide members and other professionals● Mission – Become the standard for automation globally by certifying industry professionals; providing education and training; publishing books and technical articles; hosting conferences and exhibitions for automation professionals; and developing standards for industry.● Variety of industry, technology and special interest groups – Food and Pharma, Aerospace, Analysis, Safety, Communications● ISA Automation Week:24-27th September 2012, Orlando – http://www.isaautomationweek.org/ © 2011 Solutions Insights. All Rights Reserved. 2 2

ISA Management Division● Supports ISA membership, from all industry segments,● Provides a collaborative environment where members can develop their skills, knowledge and share experiences with those currently in management or preparing for a future management role● Currently proposing a professional certification path around core competencies of “Management” Conflict Performance Management Management Project Management Risk Management Management Core Change Competencie Entrepreneu Management r-ship s © 2011 Solutions Insights. All Rights Reserved. 3 3

7thAnnual ISA Marketing & Sales Summithttp://marketingsalessummit.com• August 15-18th 2011, Austin, TX • Pre-conference workshops: $195 • Two day conference registration: $495• Who attends: Marketing, Biz Dev, Sales, Product Managers, Business Owners• Why Attend? – Learn new strategies and tactics to use back at the office – Collaborate and network with peers in the industry © 2011 Solutions Insights. All Rights Reserved. 4 4

Today’s Agenda● The value equation: why solutions?● What it takes to develop solutions – How it’s different from product development – Marketing’s role in solution development● Important considerations for developing solutions © 2011 Solutions Insights. All Rights Reserved. 5

About Solutions InsightsWe help B2B companies Our Clientsdevelop, market, andsell integrated solutions IT & Telecommunications Industrythat deliver increasedbusiness value; ourmain areas of focus are:● Strategic Integration●Offering Distinction● Customer Connection● Sales Acceleration Other Industries © 2011 Solutions Insights. All Rights Reserved. 6

Where is your market space on thecommoditization continuum? And in which direction is it headed?● Significant price competition ● Little price competition● Undifferentiated products ● Unique products● Lower perceived value ● High perceived value● Squeezed margins ● High margins● Race to the bottom ● Able to maintain or increase prices Price Value © 2011 Solutions Insights. All Rights Reserved. 8

Many companies started by selling services with their products Product Consulting Only Services Cost/feature Perceived comparisons expertise Buyers were willing to pay a little extra for advice and support.Source: Neil Rackham, presentation at ISBM conference, September, 2010 © 2011 Solutions Insights. All Rights Reserved. 10

But customers now want much more…or less Full Commodity Full Solutions • Value: cost & convenience • Value: specific expertise • Self-service • Consultative & team selling • Brand indifference • Trusted advisor • Low-level buyer • High-level buyer The middle is going away: customers are looking for either lowest price or guaranteed business valueSource: Neil Rackham, presentation at ISBM conference, September, 2010 © 2011 Solutions Insights. All Rights Reserved. 11

How we define a solutionAsolution is a combination of products, services, andintellectual capital, focused on a particular customerproblem, which drives measurable business value. Source: ITSMA Solutions Council, 2007 Some of the corporations with senior executive representation on the Council were: © 2011 Solutions Insights. All Rights Reserved. 12

Solutions address specific customer problems along a continuum of customization Segment of One Customer-Specific SolutionsCustomization Targeted Segments Vertical Solutions Level of Targeted Horizontal Functions Solutions Generic Products & Customers Services Capabilities, Capital & Intellectual Property Business Value © 2011 Solutions Insights. All Rights Reserved. 13

There are several successful product development processes—many are singularly focused and engineering driven Examples of the Product Development ProcessStage-Gate Business Develop- Testing & Discovery 1 Scoping 2 3 4 5 Launch 6Process Case ment ValidationThe PACE Concept Definition/ Business Case Development Testing DeploymentDevelopmentModel Review Review Review Review Review © 2011 Solutions Insights. All Rights Reserved. 15

Solutions development processes tend to be more collaborative, leveraging multiple elements of the portfolio, and...EXAMPLE Infrastructure & Security Service Element1 Industry & Client Applications Service Element2 Knowledge Service Element3 Business Tailored Solution Generic Solution Processes Best total Service Element4 Solution to specific marketplace or customer type Service Element5 Consultancy & Regional Enterprise Solutions Knowledge Service Element6 Products ...much more customer focused © 2011 Solutions Insights. All Rights Reserved. 16

Key ways in which product and solutions development processes differ Product & Solutions Development Comparison Factor Product Development Solutions Development Solving a technical or Addressing a business issue or Focus operational problem across a challenge for a customer broad range of customers subset Early, from a broad range of Often, from a specific set of Customer customers on a set of customers on a specific Input functions business need or issue Generally singular attributes Integrates a set of products,Components and functionality services and applications Requires collaboration by Typically developed by Team and engineering, marketing, sales engineering in a single Skills and other teams across Business Unit multiple BUs Spans a range of products, Concept Relatively easy to document methods, processes, and Capture/ and capture in a knowledge delivery resources making Knowledge management systems knowledge managementManagement © 2011 Solutions Insights. All Rights Reserved. 17 difficult, but crucial

Current economic conditions are driving companies to create faster and more effective solutions development processes Q: In terms of developing new solutions, how is your company changing its approach to adapt to the downturn? % of Respondents (N=30) Significantly improving the process by which we develop new solutions 57 Accelerating the pace with which we bring new solutions to market 33 Decreasing the number of new solutions we are bringing to market 27 Increasing the number of new solutions we are bringing to market 17 Doing nothing significantly different 17 … and that’s where marketing comes in!Note: Multiple responses allowed.Source: Solutions Insights, March 2009 © 2011 Solutions Insights. All Rights Reserved. 18

Marketing solutions is all about creatingbusiness value for the customer Solutions Factors• More complex Marketing Implications problems, resulting in a need to create more complex • Greater customer-centric offerings behavior• Greater personalization & customization • A different approach to• Increased organizational communicating the Value collaboration Proposition• Longer sales cycles and more complex Value Propositions © 2011 Solutions Insights. All Rights Reserved. 20

Marketing can support the developmentprocess in three key ways Managing Managing the Solutions Selecting the Solutions Development Right Solutions Portfolio Input © 2011 Solutions Insights. All Rights Reserved. 21

Marketing is in a strong position to managethe customer interaction for successfulsolutions development Managing Input Selecting Solutions Managing the Portfolio COMPANY X Solutions Shaped Primarily by Learning from Customer Engagements Over Time Solution Concept Customer Customer  Repeatable solution assets validated Repeatable 3 through multiple customer engagements over timeCustomer Customer Assets Reference Architectures Customer 2  Harvesting customer successes and best practices Customer References Customer Customer  Reference-based solutions from Validation Customer 1 known customer engagements  Focus on capturing earnings from sales and implementation successes Repeatable Customer Engagement © 2011 Solutions Insights. All Rights Reserved. 22

Marketing-driven research and marketintelligence is key to selecting the rightsolutions in the offer development process Managing Input Selecting Solutions Managing the Portfolio • Does this offering support our brand positioning? Strategic • Is it consistent with external messaging of the Importance firm? • Is it an expected area of growth over next 3-5 years? X% • Is the market highly fragmented or entrenched? Competitive • Do competitors have superior capabilities? Opportunity If so, how big is the gap? Prioritized • How compelling is our perspective to the Solutions marketplace? X% • Does a methodology exist that is articulated and integrated across capabilities? Ability to • Has this methodology been tested/applied in Execute real client circumstances with credentials? • Do we have the capabilities in the firm? • Do we have sufficient bench/org structure to X% scale? © 2011 Solutions Insights. All Rights Reserved. 23

After solutions are created, marketing needs to build the context and portfolio frameworks that sales and customers will understand Managing Input Selecting Solutions Managing the Portfolio Customer Areas/ Verticals Services Capabilities & Offerings • Solution Assessments A B C D E • Solution Fast-tracks • Delivery Resources 1 • Proven Methodology 2 Solution ComponentsOfferings/ 3 • Example WorkflowsHorizontal Delivery • Specific Solution Portlets Solutions 4 Models • Pre-Built Controls • Testing & Promotion 5 6 Reference Architecture • Mined from prior real- world engagements Example #1: Example #2: a systems integrator a software company “the Cube” “detachable Lego blocks” © 2011 Solutions Insights. All Rights Reserved. 24

New and special skills are needed to be asuccessful Solution Developer Activity Skills RequirementsRequirements Get the offer requirements directly from the Knowledge of market dynamics andGathering customer trends, customer behavior and business challenges Identify the product and service elements Knowledge of the product, services necessary to address the customer need and and solutions portfolios; knowledge of determine capability and feasibility partner portfoliosSolution Manage a cross-functional, cross-organizational Team management—large; ability toDevelopment product and services team, may includes one or work across BU’s and channel more partners ecosystem Create the solutions roadmap that meets Engineering and technology individual customer/customer group needs and applications; services/solutions is sufficiently standardized to be repeatable mapping; labor & resource management analysis Codify the solutions components, identifying Project and program management the customized and standardized pieces skills Ensure that quality standards are met TQM knowledge and applicationGo-to-market A solution offer that is a mix of customized and Ability to create a complete customer-Strategies primarily standardized components focusedGTM strategy Value proposition based upon the customer Business-specific marketing and experience and overall business benefits messaging expertise © 2011 Solutions Insights. All Rights Reserved. 26

Keys to Successful SolutionsDevelopment Complete commitment from the organization and, in particular, the executive team A clear, agreed-upon and repeatable process Strong leadership by marketing Identification and recruitment of the right skill sets Willingness to stay the course © 2011 Solutions Insights. All Rights Reserved. 28

Thank you! Matt Leary Nikki Fisher Principal,Solutions Insights Principal,Solutions Insightsmleary@solutionsinsights.com nfisher@solutionsinsights.com 401-635-2148 262-456-2919 www.solutionsinsights.com © 2011 Solutions Insights. All Rights Reserved. 30

Webinar: Beating Commoditization by Building High Value Solutions

by ISA Marketing & Sales Summit on Nov 17, 2011

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Webinar: Beating Commoditization by Building High Value Solutions — Presentation Transcript