Category Archives: Market Intelligence

Top 10 words or phrases to ban from an RFP response, Part 2

In this two-part article we are giving you the top 10 words or phrases you should ban from RFP responses if you want a meaningful response to your technology / technology-backed / technology assisted RFP that’s not full of meaningless buzzwords, ambiguity, misdirection, or some combination thereof. The simple fact of the matter is that if you allow any of these phrases, you are not getting an answer, or at least not an answer you need.

5. Best Practices

This one might drive you even crazier than some of the buzzwords coming up. It would dive the doctor crazier than the next two buzzwords except for the fact that vendors/service providers are a bit more honest here — they are delivering “their” best practices. However, their “best practices” are not necessarily “best practices” appropriate for you or your organization, not necessarily better than their peers, not necessarily new, not necessarily old, and so on. It’s vague. Too damn vague. You want them to describe explicitly what process / service improvements they will bring to you, how those improvements will help you, and what results the vendor/service provider expects that you will see. Not just “best practices”. As the doctor recently read somewhere, “best practices” are the learnings based on what a service provider was doing three years ago. Some will still be relevant, but with markets and technology always evolving, some won’t. Again, you need solutions, not “best practices”.

4. Sustainable Practices

Yes, you want sustainable practices. Sustainability is key, and not just because it’s becoming a regulatory compliance issue, or necessary to maintain a good brand image, but because it’s necessary to maintain a source of supply and a reliable supply chain. However, at the end of the day, “sustainable practices” is just as vague as “best practices” or “sustainable procurement” and even more impossible to gauge without deep details. You absolutely, positively, without a doubt need your vendors to describe their practices and processes in detail so that you can judge how sustainable they are and if they are sufficiently sustainable for you.

3. Innovation

This one should drive you crazy. How many times have you read “we are a very innovative” or “our innovative solution” or “innovation is our number one goal”. Great. WTF does that mean? What have they done that is ACTUALLY innovative? And how did that innovation create a better product/service/solution than you could get from their three closest competitors? What is their latest improvement, what does it actually do, how is it better than the last version, how does it compare to the closest competitor, and is it good enough to actually warrant a cost increase? Every vendor and their mascot claims to be innovative, but most aren’t, and most of those that are, aren’t that much more innovative than their closest competitor, and it rarely justifies a significant quote increase.

2. Automation

Yes, you want automation, but only if the automation is appropriate for the solution you need, the business processes you use, and the business practices you want to adopt. Plus, you want controllable automation, not an automated product/service that is not controllable. If you allow a provider to say they have automation, they are going to assume that’s enough of an answer and you won’t actually know what kind of automation they have, to what extent it can be customized, how hard it is to configure, how often it needs to be checked/monitored, etc. You need the vendor to specify how the solution works.

1. AI

Especially Gen-AI. As we have explained repeatedly, there is no true AI, most marketing is bull crap, and when companies try to do too much or go too broad with AI, what they deliver is Artificial Idiocy.

Besides, as a buyer of technology for a technology, technology-backed or technology-assisted solution, you don’t care about AI vs. no AI, you care about whether the solution will do what you need it to do, do it efficiently, do it effectively, and do it in a way that can be supported for the lifetime of the solution. The best products in our space have never needed AI, or even had access to AI, and they worked just fine using traditional analytical algorithms, optimization, classical machine learning trained and tweaked to a specific problem, and so on.

Let’s be clear that the promises of “AI” are not new, and that these promises have NOT delivered for the last 60 years. Let’s repeat that. AI has NOT delivered for the past SIXTY years. In the 1970s, shortly after the founders of AI started researching early systems, it was hailed as the future of computing. Nope. Then in the 1980s we were told AI would give us expert systems that would replace specialists. Nope. Then in the 1990s we were told 4GLs and 5GLs would enable the emergence of true AI. Nope. Then in the 2000s with the emergence of the internet and early distributed (cloud) computing models and the ability to create deep neural networks, we were told we’d finally get true AI. Nope. Then in the 2010s with the emergence of turn-key cloud platforms, map-reduce, multi-core processors supporting more parallel computation, and neural network optimization, we were again told we’d have true AI. Nope. And now, with ChatGPT and Gen-AI, we’re told we’re finally there. H3ll NO! AI is BS. Don’t look for AI. Look for solutions that work.

So ban the buzzwords. Maybe then you’ll get some real insight into real solutions.

Marketing Don’t Get No Results …

Everyday the doctor sees yet another post in his feed on LinkedIn about how Marketing is not getting results in the current climate because of reason X, where reason X may or may not be relevant, and how marketing has to do something different to get a sale. And every week there’s yet another article like this one on Forbes that provides Nine Marketing Tips to Improve Business Sales that is supposed to solve all your Marketing problems, but actually doesn’t. Why is that?

Well, let’s start by examining the tips:

Foster Collaboration between Sales and Marketing … well, duh! If you’re not doing that, you’re so clueless that you shouldn’t even be trying to market.

Design Your Goals with a Customer Focus … well, duh! If you’re not marketing to your customers, then you’re not going to get any business from them.

Regularly Review and Adjust to Ensure Alignment and Growth … well, talk about generic. This goes true for all departments in all businesses because the market is always changing. There are annual, and in some fast moving industries, quarterly reviews for a reason … it’s not just for determining how well you did, but how well what you are doing is suited to the market.

Begin with a Competitive Analysis … finally something not completely obvious! You’re going to have competition (because if you don’t, you don’t have a business), so if you want to outsell your competitors, you need to offer something better for a segment of the market, and that means understanding what you do different, better, or more cost effective.

Develop a Content Strategy on Digital Channels … back to the duh! Most buyers are online and don’t look at flyers, watch TV, or even listen to traditional radio … if you’re not digital, then unless you’re selling only to the soon-to-be-extinct old-retirees who don’t use tech, you’re not selling at all.

Gather Customer Feedback … more duh! You should do your best to get insight from them as to what they like, don’t like, and want.

Understand your Team Members’ Capabilities … finally something else not completely obvious or generic. Not just that they did X, but precisely what X was; how they did it; what industries and markets they did it in; what channels they did it on; what results they got; and where their expertise truly lies. That goes beyond a simple resume and a few questions.

Be Consistent and Persistent with Outreach … again, not completely obvious, but mostly since every market says persistence, but not all focus on the consistency. Brands aren’t built overnight.

Target High-Value Accounts with Personalized Campaigns … and a third thing not completely obvious or generic. You will be selling to multiple demographics and buyers, though not necessarily penetrating each demographic to the same degree, whether you realize it or not. And some of those buyers will be high-value (regular customers and/or regular purchasers of your most profitable products). Those are the ones you really want to return to you.

In other words, the tips are usually not that great. (And while batting .333 in baseball is great, batting .333 as a leading authoritative business source that is supposed to provide leading advice is not very good. Not very good at all!) And while we picked on Forbes (because it’s a super big publication that can take it), the Forbes article was actually one of the better ones … most of the articles are recycled obvious generic advice (likely regurgitated by ChatGPT cheaters) that are so bad the doctor could not write about them without interjecting so many profanities that he’s sure your spam blocker would ban it!

And, even worse, the good tips are usually focussed on engagement or sales. And while you might think those are the metrics that count, engagement doesn’t necessarily mean sales and sales doesn’t necessarily mean profit or results.

Revenue on its own is not results. Results are profit, and, more specifically, increases in profit over time (and if you think the shareholders give a damn about anything else, you’re dreaming). Profit requires selling the products and/or services that are profitable for the organization over time — those with a good margin now, a low return rate, and a low repair/support cost. And profit increase means selling more products that are highly profitable, which may mean shifting demand from one product to another or even altering the primary product/service offerings over time.

And how does Marketing figure this out and get results? The answer should be clear by now, but if it’s not, the answer is work with Procurement as well as Sales. Make sure that it understands the profit of each product over time, the ability of the organization to maintain supply and scale up, and alternatives that may be more profitable, sustainable, or stable that it should shift customer demand to over time.

But have you ever seen a major publication say this? Probably not. But Marketing (and Sales) will never peak without Procurement support.

Top 10 words or phrases to ban from an RFP response, Part 1

In this two-part article we are going to give you the top 10 words or phrases you should ban from RFP responses if you want a meaningful response to your technology / technology-backed / technology assisted RFP that’s not full of meaningless buzzwords, ambiguity, misdirection, or some combination thereof. The simple fact of the matter is that if you allow any of these phrases, you are not getting an answer, or at least not an answer you need.

10. Savings

Let’s get straight to the point. “Savings” do not exist. Cost avoidance does exist, but if a sourcing event identifies “savings”, it doesn’t mean that you negotiated savings, it meant that you were overspending and that the event identified that overspend so you could make changes to your Procurement to prevent that overspend. That’s it. Savings is money the business accumulates over time. The other definition is finding a way to truly reduce the amount of time, material, or resources to make something — which is something that is up to your supplier to figure out, not you. Your job is to buy at the lowest cost + margin the vendor/service provider will sell for and avoid overspend. The only “savings” you can realize is in the amount of time a process takes (which is why you buy appropriate software platforms to minimize your effort) or the amount of resources a product takes (with a better design). That’s true savings.

9. Market Intelligence

This one absolutely drives the doctor crazy and it should drive you crazy too. WTF is “market intelligence”. The market is not intelligent. In fact, ever since the introduction of Reaganomics, predicated on the false belief that a rising tide floats all boats (as discussed in Why America Abandoned the Greatest Economy in History), one could argue that the market has become decidedly unintelligent (at the same time that American IQ’s have dropped as per a recent article on The Hill, which, of course, we all blame on X).

Now, they may promise better insight into market pricing (but what is that, especially if you can just buy a real-time data feed to commodity indices or public sector contract prices), market dynamics (but isn’t that just buy and sell data), inflation or cost changes (but that requires good predictive analytics, do they have that technology and do they know how to use it), and so on, but only true experts can really provide insight that is likely to come true. And do they have those experts? And what’s their historical accuracy? Most firms don’t have leading experts in the top 10%. Basic math says only 1 / 10 “experts” are in the top 10% and only 1 / 10 companies offering a “market intelligence” service are in the top 10. So ask exactly what information/advice they provide you, how they provide it, how often they update it, who in particular does any manual predictions, and so on.

8. Diversity

Diversity is important. It’s very important. It’s absolutely necessary if you need a supplier to come up with innovative solutions to a problem. But simply allowing a supplier to say they are diverse or check a “diversity” box doesn’t tell you anything. First of all, what’s their definition of diverse. One white woman on a board that otherwise is entirely composed of greedy old white men? Might make their definition of diverse, but definitely, definitely, definitely wouldn’t make the doctor‘s definition of diversity.

True diversity is men and women of all ethnicities, experiential backgrounds, educational backgrounds, and so on that are available to you in the areas in which you employ people. Especially those from diverse backgrounds divergent from your founders / management. And it’s not an arbitrary target, it’s representative of the average diversity in your area. As we have said before, saying you want 50% women in an IT or Engineering company when only 25% of graduates are women is not achievable (but 25% is).

7. Green Procurement

What does “green procurement” mean. the doctor bets you have a definition. And the doctor bets its probably bull crap. Not to say that your intentions, or goals, are bad, or that what you think it is is bad, but that how a less than scrupulous supplier will respond to it is bad. Because when it comes to “green”, there is an awful lot of “greenwashing”, “greenlighting”, “greenrinsing”, “greenhushing”, “greenshifting”, “greencrowding”, or other decidely ungreen practices out there, and if you’re not careful, a supplier will sell you one of these not-so-green services when you ask for a “green” solution. (And, in fact, you’d be greener if you simply asked Kermit the Frog to buy you some lettuce from the local farm. After all, no one knows better than Kermit that It’s Not Easy Being Green.)

6. Sustainable Procurement

What does this mean? It’s even more ambiguous than “green procurement”. Does it mean that what you are buying is sustainable, or does it mean that the process is sustainable. Technically, under the rules of English Grammar (you know, that system of language rules they don’t seem to teach anymore), “sustainable” is an adjective to the “procurement” noun that follows, so as long as the vendor/service provider supports your Procurement process in a way that is sustainable to you, they’ve technically met the requirement, right? Right! But what you want is sustainable goods and services, but that’s not technically what you asked and the sneaky slippery suppliers will try to use that ambiguity to give an ambiguous response and slip a bid in that you shouldn’t consider. So again, don’t ask if they have sustainable procurement, ask what efforts they make to use renewables, minimize resource (water, energy, non-renewable material) use, ensure their suppliers are using sustainable practices and financially sound, and so on.

In other words, buzzwords are not answers, and any provider that simply spews slang at you is not solving serious situations that are relevant to your business. So ban the buzzwords, get deep insight, and make the right decisions.

Of course, since we started at 10, these aren’t the worst of the buzzwords. Not the worst by far! In our next part, we’ll review the top 5. Stay tuned.

Ten Best Practices for (Software) Vendors, Part 6: Bonus Best Practice #3

If you need to catch up:

  • Part 1 Best Practices #1 to #3
  • Part 2 Best Practices #4 to #7
  • Part 3 Best Practices #8 to #10
  • Part 4 Bonus Best Practice #1
  • Part 5 Bonus Best Practice #2

This summer, during the dog days of summer, as a cure to the summertime blues, the doctor gave you ten best practices for success inspired by the common mistakes that the doctor has seen small/mid-sized vendors do over, and over, and over again for the past twenty years (and, more specifically, mistakes that are costing them deeply). And while the best practices linked above won’t necessarily solve all your problems, implementing all of them should prevent a number of major problems, or at least a number of the major problems that are common to multiple technology companies trying to developer and deliver deviceful delicacies to software shoppers.

We stopped at ten, and two significant bonus, tips because ten is the number talent likes to start with, and most of the other issues the doctor has seen repeatedly (that the tips were designed to address) were either a) less relevant or b) less common or occurred less often. However, every time we enter either an extended recession, or a tech downturn (symbolized by the top employers shedding tens of thousands of workers based on economic expectations and fear and not reality [despite bank accounts richer than some nations]), there is one mistake the doctor sees over and over again. Furthermore, this ONE mistake is very dangerous as it prevents some companies from fully recovering, and sometimes starts the downward fall to insolvency or forced (fire)sale to stay in business. To counter it, we give you Bonus Best Practice #3:

BUILD(UP) DURING A DOWNTURN

The biggest mistake the doctor sees over, and over, and over again during a downturn is pushing off (market) research, development, marketing, hires, and other activities necessary for growth until “sales pick up”. The problem is, in many of these smaller enterprises, they usually barely have the resources to support the current customer base and when “sales pick up”, there’s often not even enough manpower for the implementations, so development is stopped to redeploy developers to implementation in the short term; marketing is stopped as those resources are diverted to partnership development with consultancies and implementers; pre-sales support is diverted to account management; and so on. At the same time, the big companies — who can offer bigger salaries, hire faster, and bring more people on board — are planning for rapid hiring, marketing increases, and accelerated development as soon as the market starts to swing up again. They may not be hiring more, spending more on marketing, or augmenting the dev team, but as they have enough resources already, they are preparing to do this. As a result, when the market starts to ramp up, they’re ready to go full swing, be everywhere, demonstrate they are working on a new-and-improved roadmap, and address the major market concerns.

In order to grow as a small/mid-size operation, you need to fully capitalize on up-swings, and the only way to do that is to:

  • have marketing plans and content in place
  • have (pre-)sale position descriptions ready to go and outlets identified
  • have optimized implementation processes in place (so you can do more with less)
  • have partner training courses and support ready to go (so you can augment when you need to)
  • have identified the most critical features that companies want that you don’t have
  • have identified the most innovative/unique/valuable improvements you can start working on and sell as part of the roadmap
  • have done your market research so you can go head-to-head with the big boys who will be ready (and win without properly prepared competition)
  • and so on

AND THIS NEEDS TO BE DONE DURING THE DOWNTURN!

When the upswing starts, it’s too late. Even experienced experts can’t always move fast enough when your more forward thinking peers have been working on their plans in the background since the downswing started and are ready to hit the market full force, while you’re struggling to figure out what to do now that companies are spending again.

Now, the doctor understands that hiring can be an issue because you don’t know precisely when the upswing is going to begin, and if it only takes 3 months of work to get the marketing plan, content, and pre-sales artifacts in place, you don’t want to hire that person 6 months before the upswing. Or maybe it only takes 3 weeks to identify the right improvements to the platform to optimize the implementation process, and then your developers just need to do it. Maybe you only need partner support for training and services with an optimized implementation process, and that’s just completing put-off documentation which only takes a few months (until more platform capabilities are developed). And you don’t have to code features your customer base won’t be ready to use for another two years that take six months to build for another eighteen months, but you do have to know what they are, how long they will take, and how you will sell them. So timing is difficult.

But nowhere did the doctor say you had to hire! Just that you needed to prepare. And, as per Bonus Best Practice #1, Get the Help You Need, you can always hire a contractor or a consultant to get this done, and then, when the upswing starts, sales start coming in, and the marketing, research, product roadmap/management, (pre-)sales, and partner support needs become more intensive, then hire full-time on staff people once the workload for a specific function becomes almost full time.

In other words, the key to success is to get ready to get ‘er done, and get ready to get ‘er done NOW!

The Big X are Pushing Operate Services … But Can They Really Offer Them? And Are They Real?

And if they are real, can anyone?

Backing up, in the beginning, there was traditional Business Process Outsourcing (BPO), which became very common in the 1980s and 1990s as the result of constant claims by the big consultancies and their ilk that the only way businesses could enhance their flexibility and agility and maximize their competitive advantage was to outsource processes they weren’t good at to the Big X Outsourcing offices. (In some cases they weren’t wrong. When the business had no competence in a function, grossly overpaying someone with reasonable competence, even if that someone was not the expert the Big X claimed, generated a good return for the business. The function was done efficiently and effectively, negating the loss the business used to suffer, and it allowed the business to focus on the functions they did well, which increased their profit even as they (often unnecessarily) forked out seven (7) and eight (8) figures to the Big X every year. (And we say unnecessarily because most of the time they could have outsourced to a smaller, niche consultancy at one third to one half of the cost and achieved the same result.)

Then, as Big X tried to steal business from their competitors and niche firms tried to break in, they upgraded to “Managed Services” which was supposed to be more than just performing the service for you cost efficiently (by supposedly reducing your costs by doing it better, and thus, cheaper) and adding value. The idea was that it didn’t just take over a point-based function, but instead provided a dedicated team that basically took over an entire department for you, just offsite, and worked exclusively on your projects. They learned your business, and improved the service offering over time to not only maximize efficiency, but maximize value. If they took over your IT department, they learned the systems you used, optimized those, learned to provide quick and effective problem resolution on the help desk, and, when you needed a new solution, helped you identify the one that would work best with the systems you had. If they took over your AP, they learned your suppliers, your payment rules, your PO formats, and implemented systems that allowed them to match POs to invoices for high-value invoices to reduce overspend. They also helped you build catalogs from suppliers that could meet your MRO / internal needs at the lowest possible cost. And so on. Over time, they not only met SLAs, but improved on all key metrics.

But now a few of the Big X are saying that Managed Services is not enough to maximize value and you need premium “Operate Services” (which come at a premium price, of course). So what’s the difference? Hard to tell. The best definition we can find is it’s a “holistic approach that is focused on delivering outcomes and spurring innovation in a model that leverages automation and data insight to generate substantial business value”. the doctor thought that was what managed services was supposed to do for you? Other definitions indicate that “operate services” differentiate by providing “on demand access to expert talent”. Isn’t that why you use a managed service, so they can identify when the team needs a new expert and add that expert? Other definitions also indicate that “operate services” are more “collaborative”. Are they saying that the managed services they provided to you in the past, where they often acted as an entire department, weren’t collaborative? WTF?

In other words, while they are presenting it as a more advanced premium service model, for which they want to charge you a premium, it really isn’t, or shouldn’t be, because if it is, they are admitting they have been ripping you off for decades!

In some consultancies, it is just a specialization of managed services for IT/IT Security, Analytics-Heavy Functions like Strategic Procurement or Network Analysis, or highly technical functions like supplier identification in direct manufacturing. And it costs more because those people, who are much rarer than experts in traditional business functions and processes, are more expensive, as are the tools that they need to secure your enterprise, analyze your global spend, analyze your supply network, or analyze potential suppliers for your electronic components. And we can see how that could be fair, as long as they aren’t using “operate services” to increase costs across the board where there is absolutely no justification for it.  (And only using it to differing a subclass of specialized services they offer, and admitting its nothing more than managed services, just applied to a new set of business functions.)

But if the consultancy is trying to pitch these “Operate Services” across the board with claims that these new services are better and more specialized for your business than any other kind of service, then they are admitting they are currently ripping you off in your managed services and you should just fire them. Because there should be no difference with the exception that the subclass of operate services we defined in the last paragraph generally require more advanced systems and more resources with a high TQ, which usually cost more. But that’s it.

So don’t blindly fall for this brand new business pitch if they try to pull it on you — simply compare what they are offering to any other firm that says they can fully meet your needs with a traditional managed services model and give the business to the firm that is the most honest among those that can meet your needs.  Now, it might be new and more in depth and more valuable, but that’s not guaranteed.

PostScript: We do believe Big X can offer a lot of value.  See this post on When You Should Use a Big X!