My wife sent me car shopping over the weekend. Since we got a new Ford F-150 truck in February, we are running two gas-guzzlers in our family. With that, I was sent off to the next Toyota dealership to trade-in my car. This was on all levels a bad experience, as car buying usually is anyway, but this one was exceptionally bad. First, we took a new Prius for a ride, and the sales person wasn’t even able to tell me exactly how to get the gear into D(rive). Next, he screwed up the paperwork (twice) and finally they started offering me the car at a higher price than it was advertised on their own website. I was pissed! I left the dealership and I promise I will never return again.
After sleeping over it, I thought that this is happening left and right in similar fashion in the software industry as well, except that companies rarely publish prices on any of the major ERP or SCM application vendor’s websites. Pricing of software licenses is complicated and I understand that software companies have a hard time publishing prices for their software, which without further explanation may be misunderstood and misleading. But this is not about pricing. This is about clueless buyers and clueless sellers. Heads up! The world is changing around you!
When I started selling Business Applications into the food industry more than two decades ago, most buyers did not understand technology at all. There was a server that had software on it, and that was running their business. They understood their business well, and perhaps could tell whether the features and functions were available to support their business, and if it did this, they bought that piece of software. The sales approach was like “Hey Bob, you know that you are missing some invoices, because you are not capturing your deliveries using a computer system, don’t you?” Bob eventually bought the system based on a simple business benefit.
After Bob had this system for 10 years, he learned about technology, and that this is not running as simple as the salesman suggested. The salesman forgot to tell them that a computer system needs maintenance, that you need a person that is running backups, that you need training to use this tool that you bought and that technology isn’t as easy as we all suggested at the time. Bob’s technologically knowledge either grew, or he hired people in his organization that understood how technology works. People in Bob’s organization also started using personal computers at home and where getting more sophisticated in using technology in their lives. Selling to Bob was getting more complicated, he wanted to understand how the technology works and the typical sales approach was “By adding a database for your pricing and barcoding your products, we can store all relevant information and capture data accurately in the sales process thus reducing or eliminating invoicing errors which lead credits and bill-backs”. Technology sales was getting more complicated, but still within the domain of a single product. People understood technology as a system that runs on a single server, and sales people where able to present these systems, but always in an isolated way.
Today, Bob has retired and the next generation is slowly taking the reins. Bob jr. grew up with at least programmable VCR’s, had a personal computer during college and is used to use the Internet. Depending on the age of Bob jr., he is not thinking about systems anymore. They are just there, and he is using devices to access these systems. Bob Jr. does not think in isolated systems anymore either, and he does not believe that he needs to learn how to use the software either. His expectation taught by Apple, Microsoft and Google is, that software is intuitive and I can largely figure it out on my own. Bob jr. as well is used to websites that show content from other data services, as most web sites e.g. have an integrated Google map as part of their website. Software, also enterprise software such as ERP is no longer isolated from the rest, it integrates with internet services for search, mapping, knowledge and data in both ways.
With the emergence of virtualization, we are also no longer thinking in terms of boxes and servers and where they reside etc. There are many options on how to run these different systems and how to put them together. When Bob jr. today goes out and buys a system, he knows cloud computing, SaaS (Software as a Service), IaaS (Infrastructure as a Service, aka “Hosting” or “Co-locating”) and PaaS (“Platform as a Service”, like Amazon Cloud Service and Windows Azure). The old salesmen do not understand Bob jr., because Bob jr. knows more about technology and what he expects from technology that the old traditional salesman understands.
Selling and buying Technology today requires people to understand on a fundamental level how the internet, operating systems, virtualization, databases and business applications work. They need to understand on a fundamental level on how these systems interconnect with each other, what a browser can and cannot do and how these technologies can all be combined with the core business functions in the food industry. And whenever we have buyers and sellers meeting, in which one of them does not understand technology, we will have a sub-optimal sales approach, sub-optimal benefits and perhaps even ‘no deal’ which is the competitor I feat the most. Probably like the guy that wanted to sell me the Prius.