IT Sales in the Age of the Cloud
The cloud is associated not only with a change in corporate structures, but also a transformation of the channel and even sales itself. Cloudification makes it necessary for sales negotiations to be held with decision-makers in different departments and time zones, with different cultural backgrounds and in different languages. The main challenge: getting a variety of departments to the negotiating table, and identifying the subject matter expert among many stakeholders.
To communicate with different decision-makers, sales reps must switch quickly from their roles as salespeople to global strategists and account managers. Today’s salespeople sell services, not boxes. They must also explain how the service can benefit the business, instead of simply touting its features.
The new sales process highlights the need for new skills and qualifications in the sales department, as we explain below.
Selling business value
A decade ago, it was important to get a company’s security person excited about new technology during a sales pitch. But the days of simply closing a deal by convince the responsible person or admin to buy the product are long gone. What is needed today is an holistic winning strategy, which starts by explaining the business advantages of a solution to a potential customer.
Today, the work starts long before the sales person picks up the phone. The pitch must be individually tailored to the current and future business requirements of each organization. True cloud solutions facilitate an integrated implementation of digital transformation processes – providing the foundation for a better user experience, more flexibility, lower costs, and much more. The cloud is sold not as an end in itself, but as a result of the above-mentioned effects. Therefore, the service must be adapted to the requirements of the prospective customer and presented convincingly.
Reaching out to more decision-makers
Besides the CIO, many more stakeholders now need to be brought to the table, including the application-level department, network managers, security contacts, project managers, data protection officers, and potentially the works council. The decision-making processes involved in the purchase of a cloud service are therefore much more complex and protracted. According to a recent CEB report, in just two and half years, the average number of decision-makers per project increased by 26% from 2013 to 2016.
Today, the average number of persons involved in a buying decision is 6.8. A group of stakeholders is no longer as homogeneous as before, because it is much more difficult to reach consensus among a diverse group of senior executives. What is more, in addition to internal decision-makers, external decision-makers can also play a decisive role. This increases still further the number of stakeholders, and adds to the complexity of the decision-making processes.
To reach a consensus, a winning strategy must be acceptable to all decision-makers with various backgrounds. The demands placed on sales have become inherently more complex in the age of the cloud. Sales people who were used to sell an appliance have to reinvent themselves as strategists, who need to balance conflicting interests and find common ground, in particular with respect to the introduction of the cloud.
Dealing with long sales cycles
CEB points out that the sales process up to closing has been prolonged by a factor of two, as it involves efforts to overcome differences of opinion as well as fine-tuning to reach a consensus. For the project to succeed, departments that have previously made separate decisions now have to come together at the table. To sell a cloud service today, sales professionals must be able to convince the entire buying center that their solution is the right one. It’s helpful if sales people can identify the subject matter expert in a negotiating team, whose vote will ultimately be decisive.
Globalization also means that the salesperson needs to take cultural sensitivities into account. It is no longer a rarity for an IT department of a global corporation to be based in Southern or Eastern Europe due to available expertise and the wage level of the workforce.
At the same time, salespeople should not lose sight of how they can act as catalysts to speed up a decision. Which different types of information do the stakeholders need? Where does leverage come into play to move the team to the next step? What conflicting interests need to be balanced?
Understanding new principles: capex vs opex, SLAs and trust
Before a company can benefit from the much-promised advantages of the cloud, it must rely on the expertise of sales, which makes the value-add clear across the organization. This is all the more important as the cloud service is not as “tangible” as hardware. The process of building trust is handled through service level agreements, reference customer discussions, and, where necessary, credit points for non-performance. A portal can provide insight into the availability of the service level, which highlights the continuous availability of the service or describes service failures.
As capital expenditures (capex) are converted into operating expenses (opex), another issue, which needs to be made clear, comes into play with respect to license agreement-based procurement. The businesses pay only for use of the services, which can be adjusted as and when required. Regarding the data protection provisions applicable to the cloud service, consulting with the works council and understanding its respective concerns is recommended. A contract on data processing establishes the legal framework for cooperation with the cloud provider.
Once the effectiveness of the cloud approach can be demonstrated by a proof-of-concept, the cloud has basically won. After all, a test environment can be set up within a very short time. The maintenance cost for maintaining and updating of hardware solutions is thus a thing of the past, which should be a compelling argument for every department from an administrative point of view.
What makes a successful salesperson?
In a nutshell, the sales manager has to convince the customer of the business value of a cloud-based solution – at all levels of the decision-making process. In this context, the personal skills to engage in multi-faceted communication with a wide range of contacts are much more relevant than before.
Emotional intelligence, as well as technical expertise in project management, should also be thrown into the mix. It’s important to take an active role at all levels of the sales process, taking account of the fact that the counterarguments of the prospective customer have to be addressed at various points on the path to digitization.
Project management plays an increasingly important role in the age of the cloud, such as keeping in touch with all stakeholders and monitoring the progress of the negotiations. Even after the project is brought to a successful conclusion, sales has to continue to act as an intermediary, and remain available as a contact to ensure customer satisfaction. This is because services can be quickly activated – and canceled.
For this reason, it’s important in the new cloud era to continue to act as an intermediary and maintain contact with the cloud operations team in the implementation phase. The salesperson of a cloud service is in a sense the account manager, who initiates the relationship and keeps it going.