Date: Jan. 31, 2011

Author: Barry Wilderman

Category: ERP, Supply Chain Software

No. 102

Supply Chain Software Tech Note:

The Stages of Value Delivery for Enterprise

Software

If ERP and other enterprise software vendors have "valuable solutions", and buyers obviously want

to achieve the value, how does so much value leak away?

Below, we offer a simple but powerful 5-stage model for how to ensure initial and long-term value

from enterprise software implementations.

This is a hard topic, so lets start out with a joke to get people in a reasonable mood. Stop me if

youve heard this one. There was an enterprise business software salesman who was married for

ten years, and he and his wife were still virgins. Why, you might ask. Well, all he wanted to do

was stand at the foot of the bed and tell her how great it was going to be.

Now the players from the mini-drama above could represent a salesperson from the enterprise ap-

plication vendor (or partners) and the prospect who is on its way to becoming a customer. In fact,

the salesperson and the prospect are the key players in Stage 1 of the value journey.

Stage 1: Selling value, not just products: The salesperson paints a picture of how great it is

going to be. And, the prospect reacts to the presentation. But, is it a discussion just about prod-

uct, e.g., Accounts Receivable, or is it also a discussion about value, e.g., Improving Days Sales

Outstanding. A sales strategy merely about products is off to a poor value start.

Stage 2: Building a value model: Many enterprise software vendors have presales consulting

teams. These teams are responsible for working with the prospect to create a value model. The

value model basically says: If you implement this module, you can achieve this value. This is all

great news, provided there is a proper handoff to Stage 3.

Stage 3: Implementing value, not just products: At this stage the consulting team (vendors

consultants and/or third-party consultants) implements the products that the customer has

bought. But, all too often, the consultants are content to implement products, ignoring the value

Chief Supply Chain Officer Insights 1

model that was developed in Stage 2, and the customer may be too nave to challenge this ap-

proach.

We believe that the customer is entitled to a value-based implementation. As product is im-

plemented, a value plan should be created, which will answer questions like: what value is to

be achieved, when will the value be achieved, how should the customer assign staff to help

achieve the value, etc.?

Stage 4: Value-based customer service: If we get through Stage 3,

the customer is live with its software, and has a plan for achieving value

with its new software. Now, on the vendor side, the presales team

(selling, modeling) is working on new deals. The consulting team is do-

ing new projects.

What is required of the vendor in Stage 4 is to have a support/service

team that understands the customer and its plan to achieve value. In truth, while primarily

focused on customer satisfaction, the vendors post-implementation team can also sell new

products and services (tied to value) to the customer.

Stage 5: Managing change, preserving value: After Stage 4, the customer has a plan for

achieving value over time, and the plan is well understood and supported by the vendor. The

plan must be flexible, because change is inevitable. The vendor and customer must ensure

that the plan can be adjusted for major events from the vendor, like upgrades. Similarly, the

plan must be flexible when there are major changes by the customer, such as mergers and ac-

quisitions.

Bottom Line: The vendor must ensure value delivery during the sales, implementa-

tion, and post-go-live periods. The customer must define its role in achieving and

maintaining value over the useful life of the enterprise business software.

You can reach Barry Wilderman at barry.wilderman@gmail.com

Chief Supply Chain Officer Insights 2

Tech Note: The Stages of Value Delivery for Enterprise Software

As product is implemented, a value plan should be created, which will answer questions like: what value is to be achieved, when will the value be achieved, how should the customer assign staff to help achieve the value, etc.?