Selling At The Top: The New World Order

It used to be that a top-notch VAR was the savior of IT managers and CIOs alike. Coming to a client site with specialized knowledge of networking hardware and enterprise management software, systems integrators,especially those in the VARBusiness 500,knew what they were selling was their techno-savvy. That was then.

Today, however, things have changed. High-level technical know-how is no longer a differentiator,it's the accepted norm. And as CEOs and COOs find themselves on a stopwatch to get their businesses online, they, too, have become part of the IT sale.

So, how do top VARs continue to distinguish their operations and propel themselves into the lucrative upper echelons of VARdom? By helping clients engineer their overall business processes by merely using IT as a catalyst for change rather than a silver-bullet solution.

Keane On a Holistic Approach

"All you have to do is look around to see the sheer number of ERP or large implementation failures there are. Why? Because they were likely technology-led solutions," says Brian Keane, CEO of Boston-based Keane Inc. (VARBusiness 500 rank: 32 and Billion Dollar Club member, see page 70). "You need to take a holistic approach,not one based on technology alone, but on the effects on business processes and organizational design."

That attitude is one that has consciously evolved at Keane. With divisions such as Bricker & Associates, wholly dedicated to helping customers "improve productivity-increasing operating efficiencies, quality and responsiveness to increase revenue and cut costs," the company's IT philosophy has metamorphosed from "build and manage" to "plan, build and manage."

"You need to start with a customer's business strategy to drive technology strategy," Keane says. "We have invested heavily in developing our management consulting operations to work directly with executive client management to define business strategy and best operationalize business strategy. Ultimately, that's what significantly affects where the technology strategy is."

Keane says his company is not a business strategy firm; it focuses on the area of operations improvement consulting instead, making it beneficial to have in-depth industry or vertical knowledge. Yet Keane is finding that best practices can often leap across industries.

"Some industries are more advanced than others in how they handle order processing," says Keane. "You may be able to bring expertise that you have gleaned from one industry into another kind of industry, but that's not always the case. It is helpful to have industry expertise, but to say it's the most important aspect of the relationship is not true."

What is true, however, is that there is another, less tangible aspect of relationships built on a business-reengineering model: maneuvering mind share.

"You can implement the hard side of change in terms of organizational design, but if you fail to make changes in behavior and culture related to the perception of IT, you will not get long-standing change," says Keane.

Keane knows that while his change management approach is the stuff that top VARs are made of, the buck doesn't stop there. Change management is ongoing.

"Our future differentiation and success will continue to be more and more based on intellectual capital. That means what we know, our lessons learned and organizational experience," he says.

"Ultimately, the point to remember is that technology is so pervasive that people think less about technology and more about business solutions. This is a business transformation,a business revolution."

Selling Change To Sell IT

When Apria Healthcare, a Costa Mesa, Calif., home care provider with an annual revenue of more than $900 million, needed to create an intranet to save millions in paper and mailing expenditures, it turned to Ernst & Young Technologies Inc. (VARBusiness 500 rank: 168), Chantilly, Va.

Certainly Ernst & Young's technological expertise was a primary reason Apria chose it, but equally as important was the integrator's ability to steer the IT project from the perspective of sound business paradigms.

"Every project we do in [information systems] has both a steering committee and an executive sponsor that is not part of IT," says George Suda, senior vice president of information services at Apria. "The committee members represent multiple disciplines in-house and charter a process in which everyone is in agreement."

For Ernst & Young, the assignment was tailor-made. Stewart Bloom, a partner in Ernst & Young's e-commerce division, says a formally planned and executed steering committee is part of every project.

"Our approach is one where we start with the business design first. From there, we create a solution definition and then break out a supporting architecture plan," says Bloom. "What we do in that process is make the project very collaborative between our team and the client team to form one high-performance team."

The Ernst & Young steering teams avoid the pitfalls most group consensus projects face,excessive time expenditure and bottlenecking,simply: Projects are not implemented on a mammoth scale, even if the intended end result is gargantuan. Rather, says Bloom, his company focuses on speed with predictability.

"We won't take 18 months to figure out the plan and another 12 to build," he says. "Instead, we will do a lot of smaller interactive deliverables that may take 90 to 120 days."

The way Ernst & Young has perfected the system, and prevented it from going awry, once again harkens back to a model that puts business above all,embodied in the form of the high-level executive sponsor.

"At all times, you want to know the project's executive sponsor. If you don't have access to that person, you don't have a clear idea of where the value is and what the company's true buy-in to the technology is," says Bloom. "Secondly, you have to have high levels of client involvement or you are operating in a vacuum."

But at some point, every client will say a project is done, and the VAR is left to implement a transition plan. Those in the VARBusiness 500 that have made a success of remodeling the management paradigm do so by spending long hours scrutinizing deliverables.

"We spend a lot of time with the steering committee to find out who is responsible for content, governance of IT and appropriateness of its use," says Bloom. "Then we work to create a framework for transition."

Formalized planning, like that found at Ernst & Young, say Meta Group Inc. analysts Bill Gannon and Alan Schriber, vice presidents for Meta's Value Assurance Program, is the only way VARs hoping to lead with a business-first model will succeed.

"Technology can no longer be managed as though it were a scarce resource. Clients are beginning to realize that and recognize IT for what it is,a pervasive component of core business strategies," says Gannon. "VARs that carefully identify which clients constitute strategic relationships for them, and focus on helping the IT staff of those clients to bring a business-value-of-technology message back to the management staff, will be the ones who succeed."

Why market right to IT and not kick it up a notch to the CEO as most VARBusiness 500 VARs have the opportunity,and access,to do? Because, says Gannon, at the end of the day, IT has tremendous control over strategic IT decisions. Especially when it comes to technical evaluation.

"If they can take their credibility in the area of evaluating the IT that a VAR brings to the table, then add to that a clear explanation of what the business value of the VAR relationship is, the sale will likely be made," he says.

Paradox Into Profit

What primarily sets a VARBusiness 500 VAR apart is being ahead of its game. Along those lines, DMR Consulting Group (VARBusiness 500 rank: 39), Quebec City, Canada, demonstrated a keen understanding of selling business sense as the precursor to selling technology early on.

In The Information Paradox: Realizing the Business Benefits of Information Technology (McGraw-Hill, 1998), author John Thorp, vice president of DMR's Strategic Consulting Practice, demystifies for clients the process of determining the business value of IT. Full of advice and formalized processes, the book presents DMR's long-term practices to the corporate IT buyer.

"Our model, regardless of a client's particular business, tries to understand outcomes and work from them," says Thorp. "Using a generic model, we can get people who do know their business to understand what they are trying to achieve in the long run, and then get them to understand how to use the technology to achieve that."

But shouldn't clients depend on,and pay for,VARs to do that for them? According to Thorp, savvy clients will be more likely to buy technology strategically and look to their VARs for more critical business-first functions,thereby solidifying a long-term relationship. At DMR, the practice has more than worked,the company has enjoyed exponential growth and can name clients such as Bank of America, Qantas Airways and the National Bank of Canada. (See "Focus On Service," )

Thorp's advice for VARs, whether they are VARBusiness 500 players or not, is to try partnering,a theme prevalent among last year's fastest-growing companies, but one which still holds true today.

"We [VARs] are no longer just implementing technology. We are implementing change,and managing change is very different," he says. "Small integrators should understand the kind of changes required in business models in order for technology to deliver value. They could partner with other integrators to help them do that."

Another big part of making it all work, says Thorp, is to keep clients in the technology-know from beginning to end. "That means stating how much training and transition clients will need," he says.

And Thorp has one last, critical piece of advice: If you want to sell technology as the catalyst for business change, cut the techie-speak.

"We use the language to perpetuate a separation between businesspeople and IT people," he says. "If we want to align IT with business, to sell and implement it most effectively, we have to meld the two,right down to the brass tacks of our language."