Speaking the Language of Business9 Jan, 2012 By: David Ramos, Strategy Development, Inc imageSource
To make a technology sale in these times of shrinking IT budgets and increased competition for available funds, technology vendors need to communicate a value proposition that rises to the top of projects from which a CFO will select. What constitutes a true value proposition that sells in these trying times? A true value proposition is focused on the issues companies face on a daily, weekly, and monthly basis.
Sales executives in the imaging and hardware industry have tools in their respective portfolios that can address the issues companies face, yet they need to take the time to learn them. For years, sales executives in our industry have thrown around the term “increased productivity” as their justification for a solution, but rarely backed it up with quantifiable data or the ability to speak the real language of the department they are targeting.
It’s no secret that productivity has shot up since the beginning of the recession and is a key CFO metric. One measure, profit per worker, increased by more than 50% between 2009 and 2011. It now stands at what is at least a 10-year high of $15,278, according to recent data from Sageworks, which aggregates private-company financial information.
Exactly how and why those improvements have come about, however, is a matter of some debate. Are companies asking existing workers to work harder, thinking they don’t have to hire more people? Are they outsourcing more jobs to shrink the payroll? Are machines taking over processes that humans once handled?
A new survey by Deloitte on CFOs and other executives at middle-market companies, sheds some light on the issue. A full 70% of the nearly 700 survey respondents said they’ve seen productivity improvements in the past three years, with about half of those reporting gains of 5% or more. They attributed the gains largely to improvements in business processes and technology. “The responses would suggest that there’s a real emphasis on using technology to increase productivity and make individual workers more efficient,” says Tom McGee, national managing partner for Deloitte’s growth enterprise services division.
Among the technology investments, business-process automation tools ranked first in boosting productivity scores, followed by business-intelligence tools.
In a recession, sales of business technology slow down like anything else. But some tech vendors are doing better than others in these trying times, driven by how they approach customers with their value proposition and how they substantiate their claims with information. Now, more than ever, customers are seeking value justification before they open their purse strings, and the person holding the strings frequently is the CFO and the Finance Department. And what do they need to see to believe in your technology solution? After the main business benefits have been well defined and understood, the CFO wants to see a true value proposition instead of the half-baked fuzzy propositions and value notions of days gone past. A shift towards enhanced financial accountability has occurred, and the technology vendors responding to this fact stand a greater chance of initiating and closing the deal. But just doing the numbers isn’t enough. CFOs also need to be presented this information in a way that improves the chances of sales success. The byproduct of your product or service is the key to positioning your business case.
How do you translate the byproduct of your product into addressing key indicators that company measures? You need to understand the business drivers and how they impact companies.
Document Management Systems (DMS) for example are a great beachhead into prospect accounts but one not used nearly enough. A document solutions company like DocuWare, knows how to help their distribution channel translate their product into quantifiable productivity improvements and drive cash flow improvements in companies.
Greg Schloemer, President of DocuWare Corporation for North and South America, stated that “65% of our implementations start in accounting; what is key to that is the need for today’s sales executives to have the ability to speak the language of business.”
Reduce Costs, Improve Cash Flow with Faster Processing
To keep up with documentation needs and retention schedules, it’s virtually impossible to manage a modern day accounting department without document management. DocuWare offers several advantages: significantly less search time, space savings, and gains by qualifying for early payment discounts and faster collection of accounts receivable. Anyone working in accounting knows about the mountains of documents that need to be stored to meet today’s legal and financial requirements. The systematic filing of records without a DMS can cost you in time (people are part of the equation) and space, particularly the time lost to hunt for records that might be filed off-site, incorrectly, or even lost.
Access to detailed information such as departmental codes or general ledger numbers must be possible at all times. This guarantees that an internal cost/benefit analysis gives you the right numbers.
It’s often a long way between generating invoices to issuing payment reminders to recording cash receipts. And it seems like there are always lots of questions before a customer finally pays an invoice. This speaks to the ability to improve their business processes and impact cash flow (cash flow is part of the equation). This is arguably the most important indicator of financial performance for companies.
When all relevant documents are stored in a central document pool, questions can be immediately cleared up and copies can be sent out with a couple of mouse clicks.
The time between invoices arriving and finally being paid often takes longer than a supplier allows for your company to benefit from early payment discounts. Invoice copies go through many hands before finally being approved for payment. Verification gets bogged down because of missing information from a purchase order or packing slip. Long lag and processing times are the norm. Often the current approval status is unknown. Questions from suppliers lead to long searches and copying. The cris-cross of originals and copies help to complicate the situation further (again cash flow). The DocuWare document pool is standing ready, with all of the information needed. This well structured system lets processes move smoothly, transparently - early payment discounts are now well within reach. The process time is significantly shorter; worries about managing original documents and multiple copies are eliminated.
The Controller’s office regularly provides analyses of department and segment expenses and makes this information available to management so they can better monitor business processes. These analyses often lead to questions that the head of a department or segment can answer by accessing certain documents. All relevant documents, including anything affecting budget variances, can be accessed with a few keystrokes from the DocuWare document pool. Questions can be quickly resolved. The ability by management personnel to foresee budget variances and cost overruns is markedly improved, while the effort from the Controller’s office is reduced (people AGAIN). Your company can be more effectively managed. The right numbers can be found in the right place, always ready to be accessed and analyzed.
A variety of people and departments are involved in the budget planning process - an annual event that requires accurate coordination, adjustment and significant resources.
All planning parameters, project plans and timelines are drawn from the central document pool, even the tools for managing versions of the planning status. This includes workflow functions that help divide the process into manageable steps - such as authorizations, providing access to budget information from past years and other departments. Quick access to departmental analysis, invoices, statistics and reports is guaranteed. While the quality of the budget planning process is enhanced, the amount of effort is reduced. Errors caused by obsolete versions of budget files are avoided.
Companies are experiencing increased pressure to ensure responsible fiscal management in these trying economic times. Savvy technology vendors will appreciate their situation, and offer a solid approach.