System i SCM: A Commodity?

Introduction

All software vendors have naturally learned to tout their product’s unique selling points, i.e. those features of their design that they feel exist only in their product and make them stand apart (and hopefully, above) the competition. The question before us now is this: does the prospect really care? Has SCM on the iSeries matured to the point of being viewed as a commodity? What can prospective software consumers do to make sure that the solution that they buy and the vendor that they choose, are the best available for their needs? What can software vendors do to help them come to that decision quickly, honestly (and more often!)?

Software as a Commodity

Before I share my ideas on the questions above, I need to share an opinion I've been forming over the last ten years in this business: software solutions in a very mature market become commodities.

The term commodity generally refers to any product that is essentially undifferentiated. This means that there is no difference in the product from vendor to vendor. Milk is generally said to be a commodity. As long as the product meets the provincial health guidelines for milk, there is really no difference between producers or sellers.

Why do people buy software? It’s quite simple actually. They have a problem and they are hoping that your software can make this problem go away. They want it to go away quickly. They want it to go away forever. They want it to go away and not cause new problems they didn’t have before. Finally, they want it to go away at a price they can justify up the line to their superiors.

If I were a prospect today, looking for a SCM solution, I wonder how much concern I’d truly have for the dozen upon dozen of features and functions of any one product. I’d even go so far as to say most don’t care about what the vendor touts as their product’s USP’s. Even more, I’m convinced that one vendor’s negative talk about another vendor is not only unbelievable, but it is completely counter-productive.

Those thoughts probably come as a shock to some of today’s SCM vendors, many of whom have been in the market for 10, 15 and 20 years. Vendors who have “always done it this way”. What worked well in a fast-paced emerging marketplace has lost much of its effectiveness in the mature "commodity" marketplace.

Selling the Swiss Army Knife

I believe that SCM solutions, especially on the iSeries, have reached the maturation-saturation point. This is the point where two things have happened.

First, the vendors have been actively developing their products for ten years (or more) now. The products are packed with feature and function.

Secondly, as a direct result, the products are beginning to suffer under their own weight. This can have a kick-back effect of making the product look complex and hard to use. It can also make the product harder to teach and harder to support. Sales Reps and Sales Engineers, especially new ones to the product, have a harder time knowing how to sell the tool. Marketing begins to struggle to summarize and differentiate their product. They are all trying to sell a “Swiss army knife” that has 150 tools in it! Where do you start?

We All Look the Same

The other phenomenon in play here is software homogenization. During their development years, the vendors “ping-ponged” off each other. Vendor A develops Feature A and wins sales against Vendor B. Vendor B, not enjoying this phenomenon, sees Feature A and raises with Feature B. After 15 years of fierce competition, there few significant features or functions that one vendor has that the others do not have.

How does this Effect the Prospect?

This creates an interesting effect in the customer’s product evaluation process. Venerable IT managers naturally fall back to comfortable evaluation tools that have worked well for them for years. These tools were all originally designed to ferret out differences, weaknesses and compliance with the customer's needs. Because of the points made above, they've lost most of the effectiveness they once held. For example:

• Request for Proposal. The RFP contains page after page after page of desired feature and function. Chances are quite good that the RFP comes back from the vendor with 98% of the features met, with the other 2% “under consideration”.
• Vendor Web Site. Wading through a slough of glossies and white papers and customer testimonials. All very positive. All extremely high level.
• “Independent” Industry Analyst Reviews. Many of these are sponsored by the vendor. Those not so sponsored are, by necessity, limited in content and scope, and performed by journalists with unknown technical expertise.
• Discussions with Vendor Sales Reps. Sales Reps trained in "Solution Selling" will focus on the customer's primary needs. “Give me your top five problems”.
• Product Demonstrations. Dutiful Sales Engineers then demonstrate those top five problems. They show their product at “the 30,000 foot level” in the interest of expediency and the ever-crucial “ease of use”.
  

After proceeding through all of the above with one vendor, the prospect proceeds on to the next vendor. Amazingly, the next vendor’s solution can also meet all of their primary needs and also looks very easy to use.

It’s All about Trust

What, then, finally tips the scales for the prospect? I can sum it up in just one word: trust.

Gary Elfring, author of the book Selling Software, has this to say about the topic:

“If you want to sell someone a piece of software you have to over-come all those negative feelings they already have about software. Your potential customer needs to trust you. How do you get them to do this? You have to learn to see the world through your customer's eyes. This is not as easy to do as it sounds, since you are more than likely not a programmer or someone who uses software on a daily basis. And, the fact is, you just don't think the same way your potential customers do.”

Making the Sale

There are five main areas that will factor into a successful sale:

• Evaluating the Software
• Evaluating the Sales Team
• Evaluating the Company
• Evaluating the Future of the Product
• Evaluating the Service After the Sale

Evaluating the Software

How the customers actually evaluate software is very different that how we, as the programmers and Sales Engineers, think prospects should evaluate our software! They want a solution to their problem that can be installed and learned quickly and not cause more problems in the process.

“Don’t sell the steak, sell the sizzle”, says sales guru Elmer Wheeler. What is the “sizzle”? It is that specific portion of the product that gets the prospect salivating. The trick here, of course, is finding that specific portion! Thomas Sant, another modern-day sales guru, adds to this concept: “A good sizzle should answer the one question every customer has rattling around in their head when they are listening to our sales presentation or reading our proposal: So what?”

Evaluating the Sales Team

How well do they understand my business? My needs? My staff? How responsive have they been to my requests? Do they act like professionals interested in developing a long-term relationship with me, or will they just care about me until I send in the check?

Evaluating the Company

Has it been around for a while? Will it continue to be around for a while? What is its reputation in the industry? Does it lead? Is it recognized as a trusted source of information? Are its key leaders known and respected in the marketplace as industry experts? What do its current customers say they like about the company?

Evaluating R&D

Yes, the iSeries software is very mature, but it’s not dead. Besides, software can always be improved. What is the vendor doing to maintain the health and usability of its product? Even more importantly, what is the vendor doing to reach into other areas beyond their current products, and how important are/will those developments be to my organization?

Evaluating Service after the Sale

This is probably the hardest of all to evaluate until you’ve actually become a customer! However, prospects will need a strong sense that the company is investing appropriately in services after the sale, both for a fee and as part of the (significant) maintenance charges. When I call Tech Support, does someone answer in a few rings or do I have to leave a message? If I leave a message, how long until I get called back? If I get through, does the person on the end understand my problem and its solution? What about the Professional Services department? Are they truly “professional”? When they arrive on location, will they be able to deliver the agreed-upon services on time and accurately?

Conclusion

Buying and selling commodity software is not impossible, it is just different. I believe that prospects that follow these new methods will be much more satisfied with their final choice. Likewise, vendors following these new methods will undoubtedly be more successful and profitable.