Book Summary: The Challenger Sale Summary

I read 'The Challenger Sale. book by authors 'Brent Adamson' & 'Mathew Dixson.' Its a great read and I recommend any B2B technology seller to read and finetune your selling techniques.

My draft summary notes from my read.

The Sales Personas can be categorized under 5 types namely

1.     The Hardworking

2.     Lone Wolf

3.     Relationship Guy

4.     The Reactive Seller

5.     The Challenger Seller

 

 Key Attributes of the Challenger Seller

1.     Rep offers a unique perspective.

2.     Two-way communication 

3.     Knows Customer value drivers.

4.     Know Customer Economic Drivers

5.     Rep is comfortable discussing money.

6.     Cas push the customer.

 

 The Challenger Seller does the following things.

1.     Teach

2.     Tailor

3.     Take Control

 

In a complex Sale situation, almost 40% of the Challenger Sellers are star performers.

 

Principles of the challenger sale model:

 

1.     Challengers are made and not born.

Right tools, training, and rewards – Sales reps can be trained.

 2.     Its combination of skills matter the most.

a.     Use in combination Teach, Tailor and Take control.

 

3.     Challenging is about the Organization's capabilities and not the individual reps.

a.     Teaching material, frameworks

b.     Tailor – The organization can leverage business intelligence, which teaching will resonate will which customer.

c.     Taking Control – This is the rep’s skill. 

 4.     It’s a journey to build a challenger sales force 

 

Does the challenger selling mode work?

Teaching for Differentiation

1.     Teach customer something new about how to compete in the market.

2.     New perspectives

3.     Getting ahead of RFP. Reshape RFP. Happy to construct the RFP. 

 

Tailoring for resonance:

1.     Tailor the message to individual customers, and personal economic drivers, craft customized messages

 

Taking Control of the Sale:

1. Being assertive doesn’t mean being aggressive. Doesn’t give to customer’s demand of discounts. Brings back discussion to value. (Example: If the customer is asking for price discounts, relook at all your features, and ask customers to rank these features in order of priority)
2. You can’t be an effective teacher if you can’t push your customers.
3. Take control of customer discussions with a specific end in mind.
4. In situations where the customer is risk-averse and prefers the status quo, the ability to take control can be a game changer.  

 Sales Innovation is specific to individual deals. 

Teaching for Differentiation

 

Why do insights Matter? 

1.     Discover the customer’s pain (Asking questions, and probing do not work perfectly as thought).

a.     Tell Customers what they need. Challengers better understand the customer’s world and teach customers what they don’t know.

 

Loyalty: 

The product can be great, customer service is world-class, and the brand is great, but the competition provides the same level.

 

Customers focus on general similarities between the competition.

1. 38% attribute loyalty to the brand, customer service, and product features.
2. Only 9% of loyalty is attributed to lower prices. Today’s discounts won’t get you business for tomorrow.
3. Customers value sellers who provide incredibly valuable information and conversations with customers. Outperform in the sell over competitors.

Power of Insight

 

Attributes Customers rate higher than other

1. Rep offers unique and valuable perspectives on the market
2. Rep helps navigate alternatives
3. Rep provides ongoing advice/consultation 
4. Avoid potential landmines
5. Rep educates the customer on new issues and outcomes
6. Supplier is easy to buy from
7. The supplier has widespread support across the organization

The sales professional should 

• Align this to customers’ needs to reduce costs, increase revenue, penetrate new markets, and mitigate risks which customers didn’t even know.
• Need for consensus among the customers before the purchase. Network advocacy along the way to gain support. 
• Sale has to be simple and not complicated. Don’t make your customer work hard. 
• Customers value the rep’s teaching skills (great insights) more than the discovery skills.  

Commercial Teaching:

1.     Lead to your unique strengths

• Share unique insights
• Tie back to your capability, where you outperform your competitor. <Seller should always ask. Why should customers buy from us?>

2.     Challenge customers' assumptions

• Find the connection between Insight and the customer. Your insights should challenge their assumptions, which they haven’t considered before.
• Reframe the data in front of customers, how they operate, and help them navigate. Thoughtful reflection from customers validates the reframing of customer issues.  
• Help customers see things differently.

3.     Catalyze action.

• Get the customer to act. Customers easily lose focus. Make customers realize why action matters. 
• Convince customers how your solution provides incremental value.
• Best ROI -> Cost incurring by failing to act on opportunities we just talked which customers overlooked. What they are losing against what they will gain. 

4.     Scale across customers

• Think about customer segmentation.
• Identify customers by needs.

Six Steps of building a Teaching pitch

1.     The Warmer: (Build credibility, shared experience, common challenges). Hypothesis bases selling.

• a.     Assessment of customers’ key challenges at similar companies, benchmarking data. Demonstrate that they are not alone.
• b.     Ask for their reactions.
• c.     Cuts the chase. It shows you have done the homework 

2.     The Reframe: (Tell customer New insights)

• a.     Introduce a new perspective and connect with a bigger problem, bigger opty
• b.     Insight itself. Headline. (Customer reaction: Huh, I haven’t thought about this). If you fail to provide unique insight, you fail to provide unique value.
• Surprise customer. Make them curious. 
• Alternate view

3.     Rational Ground: (Build Business Case, why that matters)

• Data/Graphs/charts to justify the hidden cost and size of the opty they have lost. 
• Make them feel like they are drowning. Create Fear. 

4.     Emotional Impact: (Make it personal. How nearly every company acts)

• The customer should be able to apply. 
• How do we get out of we are diff. 
• Make an emotional connect. Customers should see it as their story
• It’s about the narrative. How other customers went through a similar path.

5.     A New Way (Paint the picture. How Ranger can help.)

• Convince the customer of the solution. 
• It’s about the solution. 
• Behaving diff will change life.

6.     Your Solution:

• How is your solution better
• How you can lay out the solution. 

When does the supplier enter the conversation?

How do you build a commercial Teaching Organization?

 

Create a logical path. What’s currently costing customers more money than they realize which we can help them fix.

 

Inputs from organizations to Sellers

1.     Provide customers with game-changing insights

2.     Specifying and personalizing the impact

3.     Introducing the capabilities as the best means to solve the problems

 

Commercial Teaching:

 

Team sport

·      Sales & Marketing Alignment

·      Marketing has tools to generate insights. Marketing must serve as insight generating machine to equip reps.

·      Sales must ensure reps know to use that insight.  

 

1.     Identify unique benefits.

2.     Develop commercial insights that challenge customer thinking.

3.     Package commercial thinking into compelling messaging 

4.     Equip reps to challenge customers.

 

 

The single biggest opportunity is not the solutions and the services you sell, but the quality of insights you deliver as part of the sale.

 

 Tailoring for Resonance

 

Helps with the broader consensus among the organization.

 

53% of B2B of Loyalty – How do you sell than what you sell.

 

Decision Makers:

Senior Executives and the Procurement.

What matters to decision makers. Aspects of the sale process. They buy from organizations.

 

Widespread support across my organization to my decision-makers. Easy to buy from, accessible. Work with most of the stakeholders in the customer organization. Decision Maker values the team’s inputs.

 

Senior Execs place a higher value on Reps Knowledge, and Procurement place a higher value on reps not overcharging. 

 

Identify, and nurture key stakeholders.

 

Consensus Sale: 

Understand what drives loyalty to the team and not only the senior executives.

 

The biggest influencer on end-user loyalty is on Rep’s professionalism. Underpromise and over-deliver. 

 

The ability of the rep to provide a unique value prop. Educate customer.

 

Educating the end users, and influencers, providing insights and helping them reduce cost and increase revenue makes them advocate your solution. 

 

The link between the influencer/Stakeholder and the decision-maker is significantly stronger. 

 

One of the conventional ways to build loyalty is to elevate the conversation to the C-suite. Suppliers should have widespread support across the organization. 

 

The best way to sell is not to approach the decision maker directly, but by approaching indirectly through the established stakeholders to ensure widespread support. The stakeholder has greater leverage over influencing the decision-maker than the supplier rep.

 

Tailoring the Message:

 

·      Talk to more people/stakeholders in consensus-making buying to achieve maximum resonance. 

·      Start at the Customer’s industry, company, and role and then down to the person. Marketing can add value. Any merger, customer gaining share, regulatory, press releases and earning reports

 

Reducing variability:

·       

 

Tailor: Talk to more people to get the buy-in. How exactly tailor the message?

 

Start with the product, the person’s industry/company and to the personal level (personal goal’s and objectives).

 

Rep needs to know multiple things to tailor the message effectively. Personality, role, region

 

Knowledge of individual stakeholder’s value drivers

And economic drivers of end user’s business  

 

Focus not on what the end user is selling, but on what he is trying to achieve. Focus on the individual’s most pressing needs.

 

Tailoring Tools. Marketing and Sales can provide the same to reps.

 

Tailoring Cheat Sheets.

Capture end user’s (specific role) specific objectives, goals, and regular questions asked. 

Provide tailored product bundles. 

 

Template capturing the end user-specific outcomes.

 

Taking Control of the Sale:

 

Hold value and maintain the momentum of the sales process. 

Challengers always think of the next steps. The goal is to sell deals, moving ahead. Create urgency.

 

Three Misconceptions:

1.     Taking control is synonymous with negotiation.

• It’s not about negotiation but about the entire sales process.
• Many times optys are veiled optys and buyer gets into discussions with buyers. The customer doesn’t have any intention of buying. Challenger sellers can sense this, if they are not granted access to the senior exec. They move away. Time is better spent anywhere.
• Its important to gauge is they have access to the senior folks initially.
• Challengers understand the buyer’s goals and objectives and biases. They map out what the stakeholders care about and why they care about it.   

2.     Reps take control only in matters of money.

• Reps take control and educate the customer on the challenges customer faces and solutions to the challenges. They reframe the customer’s world. 
• On Buyer’s skepticism and push back stating their company is diff, the challenger pushes back on the customer acknowledging buyers company is diff just like all organizations seller works with. Challenger brings new ideas to the table. 

3.     Reps will become aggressive.

• Negotiate, stay your ground, and explore avenues to discuss and convince customer on the rationale. 

 

Taking Control:

 

Challengers thrive in ambiguity. They like tension. We look for excuses to avoid them. 

 

Dupont Negotiation tactics:

 

Purposeful planning: Do in advance of the sales.

 

Situation Sales Negotiation. (SSN) Template

 

Planning

1.     List all We have strengths and areas where we have weaknesses.

2.     All information needed from the customer.

3.     Ask all questions to be asked.

4.     Information customers may be likely to ask.

5.     Difficult questions which may be asked and responses.

6.     List of possible concessions to be given. List of customer demands to be made. 

 

Winning such conversations is what differentiates the challengers. They have the scorecard wired into their brain.

 

High-performing sales reps spend a significant amount of time planning. Not on the current move but think steps ahead of the buyer.

 

Sales reps must learn to challenge customers and push back.

 

Anatomy of successful negotiations

 

4-Step Framework (by Dupont)

1.     Acknowledge and differ

• E.g. Price discounts without threatening the deal (I understand price is what needs to reduce, but before we do that we completely understand all your needs to be done so that we can do all we can)
• Rep has bought some time. He has also promised the closure.
• Don’t come across as aggressive. 

2.     Deepen and broaden

• Reps are given tactics to understand customers’ underlying additional needs.
• Expand customer’s view important to them
• Customers to restate things which customer likes
• What are you trying to achieve with the desired discount? 

3.     Explore and compare

• Reps are given tactics to explore additional needs
• The primary idea is to expand customers' view of the things important to them
• What else besides price matters? Warranty, expedited shipping, and installation. 
• What are you trying to achieve by 10% reduction?
• Often the requirement can be achieved by offering something else. 
• Supplier creates value and provides additional value. 

4.     Concede according to the plan. 

• Reps are taught to trade carefully with low-value solution elements before getting to the price.
• What is the seller willing to concede?
• How and when?
• Avoid certain concessions (start with small and then get too big as the concessions progress) or take or leave it. The customer feels cheated.
• Start with meaningful concessions. Give concession patterns. 

 

Taking control happens throughout the discussion. Making powerful requests shows seriousness. 

 

Overcome passivity: Teach reps about clarity of direction over quick closure. Create real value in the sales process.

 

 

Manager and Challenger selling Model:

 

Front line sales manager needs to be onboarded else the initiative will fail. The manager is the fundamental link between strategy and execution. 

 

World-class Sales Manager:

Analyzed data on the following four parameters.

A>

1.     Management Fundamentals (Integrity, reliability, recognition, team building, listening skills)

a.     Accounts for 25% of Sales manager success

b.     Great reps don’t necessarily make a great manager.

c.     Find a new position that meets these abilities and screen up front.

B>

 

Sales (Account planning, Territory management, Level of innovation manager shows in positions offering). 

Account for 75% of sales m manager's success

a.      

b.     Selling

c.     Coaching

d.     Owning: Running their territory as if it was their own business 

 

2.     Attributes related to actual selling Ability (Negotiation skills, and unique perspective).

a.     Commander’s intent. Stop giving step-by-step instructions.

b.     Be a rep when needed.

c.     These attributes fall under three categories (Selling, coaching, and owning)

3.     Coaching skills (Follow through on development commitments).

a.     Accounts for 28% success.

b.     Leadership, Providing guidance. Demonstrate ownership of the business.

 

Sales Leadership is about how innovative sales managers are. Sales Innovation: What’s holding up the deal, and then finding creative ways to move forward. When and why the deal is running into trouble.

 

29% attributed to the manager’s success.

 

Best Manager comes from the Challenger category.

 

Sales Coaching:

 

Formalized Sales coaching improves sales rep performance in complex sales processes.

 

Design, diagnose and reinforce behaviour specific to the individual.

Coaching is ongoing; training is one-off. 

Coaching is customized to the rep’s individual needs.

Effective coaching is formal, structured and regularly scheduled.

 

Sales Innovation:

 

Three key Sales Innovation activities:

1.     Investigate: 

a.     to determine what’s blocking the sales, who’s involved, What decision criteria they will consider, what kind of financial concerns may get into our way

b.     Map customer’s decision-making process for any given deal which are stalled somewhere along the line

c.     Many times customers aren’t sure about the decision-making process

2.     Create Sales Solutions (innovative sales solutions). It’s not deal inspection Position Rep’s capabilities to better connect with supplier’s challenges.

a.     Shipping risks from customer to supplier for long terms contracts for long term contracts

b.     Cross sale optys

c.     Co-creation, thought partnership, working collaboratively. 

d.     Focus on deals where the stakes are high. 

3.     Share

a.     Replicate the innovation somewhere. Get scale from the efforts

b.     Develop and sustain strong relationships inside the organization

c.     Passing new ideas to the rest of the team 

 

Roles and Conflict

 

Efficiency focus (Territory management, resource allocation, right reps, right customer) vs effectiveness Focus 

 

Effectiveness focus is twice impactful as compared to efficiency focus. 

Innovation is the ability to thrive in the unknown world. 

 

Helping managers to understand their biases

 

Opening thinking, alternative thinking. 

1.     Practicability bias: unrealistic ideas should be eliminated

2.     Confirmation Bias: Unexplainable customer behaviours can be ignored

3.     Exportability Bias: If it didn’t work here, it wouldn't work anywhere 

4.     Legacy Bias: The way we have always done it. It must be best

5.     First Conclusion Bias: First offered solution must be the best.  

6.     Personal bias: I won't buy it, and the customer won’t buy it either.

  

Prompting Questions: (THE SCAMPER Framework. Brainstorming) 

            Expand ideas. What to do next? 

 

What else can be going on

 

What might be a substitute?

What ideas worked elsewhere can be considered?

What’s CFO, marketing must be thinking?

Questions set aside practicality: what would you do diff if you had more budget? 

 

Holding biases. 

 

Implementation Lessons from the early adapters:

Cybersecurity Maturity Journey

 NIST 1.1 Framework

The customer's cybersecurity journey maturity can be mapped against each category and the customer’s target objective for that category, as depicted below.

Target Maturity Roadmap mapped to NIST Framework.

Implement, Monitor, Measure and Improve

Cybersecurity maturity is a journey. Various organizations have adopted varying degrees of control and continuously taking measures to improve their maturity. 

Source: Verve

https://verveindustrial.com/resources/whitepaper/5-steps-to-greater-security-maturity-with-nist-csf/

 

Cloud Strategy

What's Cloud Strategy?

Cloud strategy is always confused with Cloud Implementation plan. These are different documents with diff purposes.

The Cloud Strategy is a business document, whereas Implementation Plan is IT document. The implementation plan is an IT document. It primarily talks about the Cloud Adoption, operationalization, methodologies, best practices, Assessments, Tools and steps etc

Key stakeholders: 

CIO, Cloud Architect and the Business Sponsor. 

• CIO: Initiate the cloud Transformation Project, Oversee, Mandate, Set the deliverables, and Set the success metrics.
• Cloud Architect: Project Owner who spearheads the cloud transformation
• Business Sponsor: CIO is not the business sponsor. The business Sponsor facilitates how the business will transform into digital business 

Key Business Drivers: 

1. How the business will transform into digital business.
2. Please note: Its not about Availability, Scalability, Agility, Cost reduction, Improve Productivity

How do we document Cloud Strategy: (5-7 pages)

1. Executive Summary (1-2 pages)
• Vision
• Why the project is important to business
2. Business Drivers (examples like)
• Is the organization leveraging Sensor based
• Are we interested in data ingestion & correlation
3. Cloud Adoption Approach
• Are we going to adopt Cloud First or Cloud Opportunistic
• Multi-cloud?
4. Risks
• Risks important to executives. Put it within context.
• Is the cloud Secure?
• What if the Cloud providers fail?
• What if Cloud Shut us down?
• How do we address the concerns around Cloud Lock-In?
5. Exit Strategy
• How much time do we have to exit
• What are we going to exit? Is it entire cloud provider or only the tier 1 applications?
• Who makes the decision? It should be collection of people (Legal, Procurement, IT, business)
6. Success Metrics for business
• Number of advise generated from the data stream
• Improve the efficiency by integrating the systesms
• Reduce the onboarding time by 15 %

Common Mistakes while building cloud strategy

1. Creating a document that's geared more towards IT than business.
• There are no IT projects. These are business projects and business outcomes
2. Writing a very long document
• Ensure you don't prepare IT specific cloud implementation plan> Remember this is for the Executives. Ensure it's accompanied with Presentation 
3. Not gathering everyone's viewpoints
• Get everyone's buy-in
4. Not appointing the Owner to drive the project
• Its the Cloud Architect 
5. Not having business Sponsor
6. Not having an exit strategy
7. Confusing Cloud Strategy with Implementation Plan
8. Not having Success Metrics
• To track the progress and stay on track 

Source: Elias Khnaser @ pluralsight

“AI has been in Google’s DNA from the beginning – we are an AI-first company” – Tarek Khalil, Google Cloud

“AI has been in Google’s DNA from the beginning – we are an AI-first company” – Tarek Khalil, Google Cloud: ecurity is a complex and constantly evolving threat, but again, Google is top of the leader-board when it comes to cloud security.

IT Modernization Goes Beyond The Apps

<https://www.itjungle.com/2023/04/17/it-modernization-goes-beyond-the-apps-kyndryl-says/> 

Excepts from the Kyndryl sponsored Forrester Study on IT Modernization challenges and Benefits

Key Challenges faced by the organizations Modernizing

1. Nearly half of those surveyed say their operating models prevent them from making quick decisions based on changes to the business. 
2. Only 55 percent said they can effectively scale their operations when needed. 
3. And nearly half said they struggle to control and predict IT costs in the cloud, a common site (though not an exclusive one) for organizations’ modernization exercises.
4. In many cases, old infrastructure, including aging IBM i and System Z servers and applications, are holding organizations back, Grama says.

“It’s not surprising to hear the outcome of that study,” he says. “A lot of these guys have really old infrastructure. 

1. They have old monolithic application written on legacy technologies that don’t lend themselves to modernization at any level. 
2. There’s complexity, there’s sprawl.  Every one of them has had sprawl built up over the last many decades. 
3. And they don’t understand exactly what they have, and in cases they don’t particularly have the most accurate source code. 
4. Their applications are not agile, their infrastructures are very static, they don’t use things like infrastructure as code, etcetera.”
5. Global firms are suffering from IT inefficiency, a lack of innovation, and a lack of malleability to get new business models.

Skill Shortage:

According to the Forrester study, 42 percent of respondents said their organizations don’t’ have the right skill sets to manage its current operations, 34 percent said their organization requires too many skilled workers, and about one-third said they struggle to retain employees.

Benefits derived from Transformation:

12 ways to maximize your cloud investments

https://www.cio.com/article/465322/12-ways-to-maximize-your-cloud-investments.html#sf265617302

Cloud costs are a rising concern for today’s CIOs, but the right tools, talent, strategy, and contract terms can help ensure you make the most of your current (and future) cloud spend.

Over the past few years, more organizations have gone all in with migrations to the public cloud. But for some “without a concrete strategy, it has led to some obvious challenges with respect to measuring the real value from their cloud investments,” says Ricky Sundrani, a partner in the pricing assurance practice at Everest Group.

Cut to one of the most significant concerns across enterprises today: rising cloud costs.

“Many enterprises are getting some unwelcome sticker shock surprises for their cloud services that are coming in much higher than estimated and blowing up the business cases they used to justify their program in the first place,” says Andy Sealock, senior partner in the advisory and transformation practice at West Monroe.

While inadequate planning at the start of the cloud journey is a major driver of this disconnect, there are plenty of others: limited visibility into cloud consumption and patterns, unchecked cost leakage, cloud sprawl, lack of workload optimization, and weak demand management policies, to name a few. More than two-thirds of organizations are not realizing the full value of their cloud investments, according to an Everest Group survey of CIOs.

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The business case for cloud remains the same: greater scalability, increased efficiency, better data security, increased reliability and resilience — and, potentially, lower costs. But realizing those benefits requires deliberate and active management of cloud deals.

There are a number of actions IT leaders can take to maximize the value of their current and future cloud investments, from well before partners are narrowed down to long after the contracts have been signed. 

The following dozen tips are worth adopting.

1) Assemble a cross-functional cloud team

One of the biggest missteps when pursuing cloud opportunities is failing to make these cross-functional efforts from the top down.

“When cloud transformation is driven by a CXO office without close involvement of business units and development teams, finer nuances are missed, leading to ineffective cloud adoption from a cost and efficiency perspective,” says Mukesh Ranjan, vice president of IT services at Everest Group.

IT leaders should assemble a team with representatives of all key stakeholder groups during the planning stages of the cloud transformation journey, Ranjan says. A 2022 PwC survey found that companies that were achieving transformational benefits from the cloud and reporting fewer barriers to value typically involved five or more functions at the start of their cloud projects. Doing so later on in migration, though less ideal, is still an option to ensure that 360 degree view of enterprise cloud requirements and usage.

2) Define baselines and (realistic) expectations

Too many organizations lack a full understanding of the benefits they expect to gain from the cloud vis-à-vis their existing environment. That requires assessing the value of the current environment, the value they seek from cloud adoption, and timelines for achieving that value.  Only then can they select the providers, solutions, and expertise that best align with their cloud goals, says Ranjan.

It’s important to take off the rose-colored glasses during this process. “IT leaders must be realistic in how much of their premise-based compute footprint can be migrated to the cloud and how quickly this can happen,” says Sealock.

3) Build a full business case

During the pandemic, many organizations rushed to the cloud — and for obvious reasons. But migrating to the cloud without a well-thought-out business case is not an optimal strategy. A hurried lift-and-shift approach typically results in increased costs over the long term. During a migration frenzy, companies can take shortcuts that result in technical debt that dilutes the impact cloud transformation can have.

“Think of cloud as a modernization journey and not just a migration,” Ranjan advises. “Undertake application modernization initiatives such as refactoring, rearchitecting, replatforming, and replacing as needed to optimize applications running on cloud.”

4) Analyze (and negotiate) cloud contract terms upfront

Many IT leaders lack the relevant market data required to conduct informed negotiations with cloud vendors.

“This could be pertaining to expected discounts, more favorable terms and conditions offered to certain buyers, and better transformation timelines, among other things,” says Sundrani.

Marina Aronchik, a  partner in the law firm Mayer Brown’s technology and IP transactions practice, recommends accounting for the terms in cloud agreements as part of the broader evaluation of potential cloud solutions and providers. 

“In the current economic environment, customers may have a unique opportunity to secure more flexible and favorable contractual terms,” Aronchik says. “To do so, IT organizations should build time into the process for reasonable engagement with several cloud providers on a competitive basis, or a single cloud provider with a reasonable opportunity to pivot to an alternative solution if needed.”

5) Read the fine print

The value of a cloud contract is not fully represented in the fee schedule. What the customer may assume to be “permitted use,” the cloud provider may deem “excess use” or an “overage.”

“To maximize total value of a cloud contract, IT leaders should look for contractual and technical clarity on the metrics that are used to calculate relevant fees, reliable tools for monitoring consumption, and the methodology for addressing actual or potential excess use,” says Aronchik.

6) Beware of minimum commitments

It can be tempting to agree to certain volume or spending levels to secure deeper discounts for ongoing cloud usage. But it’s one of the leading causes of stranded value in cloud contracts.

“It’s important to not overcommit on the minimum commitments,” Sealock warns. “This often depends on an enterprise being able to accurately predict how much of their premise-based footprint they can actually migrate to the cloud and at what rate.”

If an IT organization runs into issues that delay or prevent moving on-premises systems to the cloud, and thus miss a minimum commitment, there will be costs involved. “Longer term commitments, use of ‘sticky’ native services may drive larger contract discounts but also impact your technology plans,” says Sealock.

7) Leave no cloud stones unturned

There are a number of internal factors that can impact cloud value realization. “Challenge your IT department to pull all levers for efficient cloud usage,” advises Sealock. There may be an opportunity to refactor applications to make them more efficient users of cloud resources, adopt cloud native services instead of lifting and shifting existing system to IaaS, or move to SaaS options as part of ongoing application rationalization.

Increasing the focus on application modernization is crucial to extracting the full value of cloud, says Ranjan.

8) Invest in a cloud management platform

Real-time visibility across the cloud environment goes a long way in preventing unexpectedly huge bills from cloud providers. But “cloud pricing and ordering options are at a sufficient level of complexity that it is beyond the capacity of a ‘smart person with a spreadsheet’ to manage effectively,” says Sealock.

There are numerous cloud cost management tools on the market from established players and startups alike. These tools should have real-time interfaces to the cloud service providers’ pricing engines and be able to automatically match the enterprise’s cloud usage patterns with the right cloud services (e.g., IaaS, PaaS, native) and configurations (e.g., service instance type/size, storage tier). Sealock advises evaluating multiple platforms, looking for the following attributes:

• Financial (in addition to technical and operational) management capabilities
• Integration with automation tools for orchestrating technical deployments
• Capacity to pull usage from both cloud and on-premises environments
• Ability to model what on-premises environments would look like (and cost) on multiple clouds
• Engineering support to ensure the tools remain properly configured over time

9) Secure scarce cloud management talent

“Cloud pricing can be very complex and dynamic and is highly dependent on usage,” says Sealock. Without the proper governance, unnecessary costs can quickly accumulate. Adopting a cloud management platform is step one, but these tools are themselves complex. IT leaders must also recruit technology professionals who know how to use cloud management platforms to continually refine cloud service usage to meet enterprise SLAs at the lowest costs.

Enterprises  are seeing premiums for cloud skills outpacing those for standard IT infrastructure skills, according to research by Everest Group.

“Cloud expertise is in short supply, but without in-house experience it is difficult to avoid the wasteful pitfalls,” Sealock says. “Invest in the people to use the cloud tools properly who can also design the policies, processes, and procedures of a cloud governance framework.”

In some cases, IT leaders will create a cloud center of excellence that can be leveraged across multiple lines of business. 

10) Get serious about demand management

Ease of use and self-provisioning are two of the big benefits of using the cloud, but they also open the door to unmitigated (and sometimes invisible) cloud sprawl. IT organizations must create and communicate clear policies and processes for cloud demand management.

“Training can be used to increase the socialization of the policies and processes to users, but good compliance also requires those policies to be enforced within the programmed workflow of the tools,” says Sealock, who suggests putting some teeth into demand management. “Communicate top down that there will be smart constraints on cloud usage that will be reinforced via training but also codified in the workflow of their systems.”

11) Address overruns right away

Some IT organizations may view cost overruns as inevitable. But ignoring them is a mistake. “They do not get better on their own,” says Sealock. “It takes action to change the dynamic.”

Unexpected — or worse, inexplicable — cloud costs are a red flag. Understanding the root cause of the usage and addressing it as soon as possible is important. “You do not want to discourage cloud usage, but you must insist that the usage be smart, deliberate, and cost-effective,” Sealock says.

12) Continuously monitor and measure cloud value

Having clearly defined SLAs to measure performance against expected value is crucial. “Unless enterprises have a well-built process to continuously monitor and measure value against their stated goals, they will slip off in their transformation journey,” says Ranjan.

Cloud vendors, consultants, and other partners are likely to keep pushing more cloud, but its critical for IT leaders to periodically re-evaluate the cloud march to ensure the organization can achieve the intended value. 

by Stephanie Overby

B2B Sales Quick Overview

Noting down the overall B2B Sales process. 

B2B Buying Journey

B2B Buyer Challenges:

• Modern Buyers are more skeptical
• Buyer is well informed about the services/solutions they are buying
• Buyers worry more about the risk of Purchase
• Buyers want to try out first before buying Solutions or Services

Effective Sales Strategies:

• Know Prospect Well, Research thoroughly:
• Effective Sales enablement. Provide buyers with adequate, advanced information to supplement their knowledge to assist them with their decisions.
• Create Ideal Buyer Personas.
• Be far-sighted and think long term
• Sell solutions to help solve problems and not products loaded with features 
• Periodic, Value added follow ups are important

Effect of Identifying Appropriate Buyer Personas in Numbers:

6 Steps of Solution Selling Process:

Credits:Mark Quadros

https://www.reallysimplesystems.com/blog/b2b-sales-strategies/#skeptical

Interesting insights around Cloud exit

 https://world.hey.com/dhh/the-hardware-we-need-for-our-cloud-exit-has-arrived-99d66966

DAVID HEINEMEIER HANSSON

April 6, 2023

The hardware we need for our cloud exit has arrived

It's been a long time since I last saw a physical piece of hardware used to run our services at 37signals. I vaguely remember doing a tour of our Chicago data center over a decade ago, but somewhere along the line, I just lost interest in the iron itself. Now the interest is back, because hardware is fun again, so let me share my excitement with you!

These are the two pallets that showed up in our Chicago data center recently. The same day that an identical set arrived in Ashburn, Virginia for our second data center. In total, we received twenty R7625 Dell servers that'll power the bulk of our cloud exit. It's a staggering amount of computing power in a shockingly small footprint.

Here's a diagram of our four cabinets in Chicago (we have another four in Ashburn). As you can tell, there's still a bunch of older hardware dedicated to Basecamp in particular. A good chunk of that will actually get retired, once we're done setting things up. But all the 2U servers marked "kvm" at the bottom of the cabinets are the new ones:

You can spot the new R7625s at the bottom of the actual racks here, next to the older gear:

Each of these R7625s contain two AMD EPYC 9454 CPUs running at 2.75GHz with 48 cores / 96 threads. That means we're adding almost 4,000 vCPUs to our on-premise fleet! And a ridiculous 7,680 GB of RAM! And 384TB of Gen 4 NVMe storage! Serious horsepower and headroom for years to come. In addition to this, we have another ~six database servers showing up between now and this summer, and then we'll be set.

The contrast to the origin of Basecamp is funny. We launched Basecamp on a single-core Celeron server with just 256MB of RAM back in 2004. Spinning rust at 7,200 RPM. And that was good enough to get the business from part-time to full-time in about a year.

Almost twenty years later, we now have a long lineage of legacy applications (because we promise to keep applications customers depend on running until the end of the internet!), some massive flagship services in Basecamp and HEY, and a mission to get it all running on hardware we own ourselves again.

It's kinda wild to think that it's been less than three months since we decided to scrap Kubernetes and pursue a simpler solution for the cloud exit with MRSK. And that we've already moved half of the cloud applications that need to come home!

Over the next month or so, we plan to bring home both Basecamp Classic (still a multi-million dollar business, even if it hasn't been updated in about 13 years – that SaaS magic!), as well as the grand prize of the cloud exit: HEY! That'll leave us with just Highrise and a small auxiliary service called Portfolio left in the cloud as we start the month of May.

I thought we were already being optimistic when we planned a total cloud exit by the end of summer, but now it seems we'll basically be done by the end of spring instead. Truly a remarkable achievement by the team working on this effort.

The reality of our accelerated timeline has made me even more bullish on cloud exits in general. I imagined getting out of the cloud was going to be as hard as getting in. But that just hasn't proven to be the case. Though perhaps it's helped that we've had that nuts number of $38,000/week in cloud spend as a motivating carrot to get it done quickly!

I seriously hope that other SaaS entrepreneurs looking at their daunting cloud bills are paying attention. Once you've gone cloud, it might seem impossible to contemplate getting out again, but don't believe that for a second.

Modern server hardware is incredible. We've taken huge leaps forward in performance, density, and cost over the last few years. If you haven't run the numbers since cloud became the default in the past decade, you really ought to do so now. The numbers might just shock you as much as they did us.

So the end is now clearly in sight. We've solved all the key technical challenges we needed to address to make the cloud exit happen. We've been running production apps on MRSK for a while now. The path is clear, and I can't wait for those mammoth cloud bills evaporate. I think we're going to find that the napkin math I did for our public calculation of savings will be highly conservative. But we'll see and we'll share.