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| e-Xpertise in Industry Issue #10 September 2001 | ||
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CONTENTS: Feature Article : PLM – what is it and who really needs it? Hot Topic : Training and the Sales Team Book Review : Games War! Notice board : From the Editor . . . .
The last few months have seen a lot of action in some quarters and less activity than might be wished for in others! Maturity in the design space has led to further consolidation amongst the top players with the acquisition of SDRC by EDS (read article by Mike Evans). In the Enterprise Applications Arena a more challenging set of market conditions is already providing a harsh test for some of the younger companies who have, until now, only known growth. The dot.com period of unconstrained fantasy is over and reason once more prevails.
In terms of the future, we expect the coming months to bring announcements of ‘marriages' between the major CAD vendors and Enterprise Applications companies (one of the reasons we have looked at PLM this month – Ed). As Cambashi predicted at their Annual Seminar there is still a lot of hype in the market place about CRM and SCM (read more details). The coming months will see a shift of user emphasis from major new projects to maximising the benefit from existing systems. This will mean renewed interest in getting the various applications to talk to each other effectively. It is fortunate for us all that we live in interesting times……………..
Bob Brown In this issue . . . .
PLM – What is it and who really needs it?
Training and the Sales Team
The book review by Richard Henshell is Games War, a look back at the drama of the PC games market during the eighties and nineties. A good yarn and some lessons for us all. Quote for today:
This week's quote could almost be a mantra for sales people - Ed.
"Know how to listen, and you will profit even from those who talk badly." Plutarch (46 AD - 120 AD) PLM - What is it and who really needs it?
In a world of mass customisation, design and manufacturing need to work seamlessly together. Software that supports the design process must integrate with software that buys the parts, plans the production and ships the finished goods. Viewed from a user perspective the need to integrate the various parts and functions of the organisation has been a sensible goal for many years. This is what Product Lifecycle Management or PLM is all about.
In Cambashi's early days, in the 1980s, business strategies for design and engineering applications could be developed without much input from the world outside the design and engineering groups. This was still a relatively young market and CAD was the province of the specialist. Widespread access to design tools was still limited. The key benefit these systems offered was the productivity gain in the geometry creation task. PDM toolkits that were available at the time could be used to handle bill-of-material interfaces with production control systems, offering limited benefits in terms of keying data only once and eliminating transcription errors. Many of the resulting ‘integrated systems’ had 'fire-and-forget' data transfer. As the use of CAD has matured the incremental returns from new investments have diminished – whether you consider productivity or competitive advantage. It’s the s-curve effect. As the solution matures, the ratio between the incremental benefit gained and the investment required to achieve it begins to worsen. The parallel story of ERP packages is an example. MRP, Distribution and Accounting systems, originally standalone, became one integrated ERP system. The benefit of a joined up approach can only be realised once you have embraced and learned how to use both sets of tools.
By the 1990's, things had moved on. To leverage bigger benefits for the business the design function had to become more fully integrated. In order to develop strategies suitable for design and engineering applications, vendors had to take account of what was happening in the business systems area. The hard hats in engineering and production could no longer avoid the suits from the finance and administration groups, so we started to broaden the scope of our research and know-how.
What we see when we look at CAD now is a mature market (Ed - see Mike Evans article). One aspect of this maturity is the need to develop new products that offer revenue growth and the prospect of improved profit margins. So the emergence of Product Lifecycle Management as a focus for the major players who used to be CAD vendors comes as no surprise. When we looked at market for design collaboration seats, we concluded that the potential market was an order of magnitude bigger than the whole CAD market. For Cambashi, the emergence of PLM is the coming together of two communities we have been working with for many years. But is it really different? Have the concepts moved on from ideas expressed in Ivan Sutherland's 'Sketchpad' research in the early 1960's, that recognised value in easy communication and re-use of product information?
The answer is, of course, both yes and no! It is possible to find levels of abstraction at which one can say 'nothing has changed'. But this is only useful for stratospheric discussions of the history of technology. At the practical level of successful strategies for vendors and users, every significant parameter has changed. While it may have been possible to integrate the disparate solutions for some years, the required effort, investment and skills proved serious obstacles to widespread adoption. Now, at last, it is possible to achieve economic global roll-out of software and hardware to view 3D product models. Communications capabilities can support data transfer and sharing of databases. IT infrastructure and applications offer interfaces and tools enabling levels of integration that demonstrate how primitive some of the early efforts to exchange parts lists between CAD/PDM combinations and SAP R/3 really were. It’s relatively easy and cheap to build a community of customers and suppliers in order to conduct e-commerce - this is the world in which PLM can bring serious benefits to organisations of any size.
For Cambashi, the new world of PLM looks comfortable and familiar. CAD companies are emerging from engineering departments, and are bumping into ERP companies coming down the corridor that connects engineering to the rest of the company. Vendors with their roots in both camps are moving to fill the gaps between these two well established domains, a colonisation process, with their own users serving as the bridgehead. This approach often involves a proprietary type of solution. There are also some new players like Centric, Matrix One, CoCreate and others positioning themselves in the middle ground with more generic tools. Selling the more holistic approach of PLM may be conceptually easy, but closing deals definitely isn’t. Everyone may need PLM but not everyone is ready for it, or able to act. Knowing which companies and sectors to target, who to call on and what to say, needs careful preparation. Above all else, knowing how to qualify prospects accurately will be a key issue for the sales manager who wants to make target in the coming year. Identifying who REALLY needs PLM, and can sign the order, will be the winning strategy. Peter Thorne Training and the Sales Team Sales people need regular training just like everybody else. IT is a very fast moving industry so the sales people who work in it need training more than most. However, more than any other group in the business, the sales team is under pressure to remain in the field, doing what they do best, selling. As a result the sales person can get a raw deal when it comes to training. This isn’t necessarily because they don’t get enough training. No, the real problem to my mind is that they don’t get enough of the right kind of training, in terms of either content or style. |
One consequence of keeping the sales team in the field is that, when they do get together in one place, there is heaps more content than there is time available to present it effectively! Too much content leads to a one-way flow of information that encourages a passive response – “If I ask a question it will just take longer to get through it all!” The team becomes an expensive audience for material that simply washes over them. Here is an example of what can happen.
The company has published a new case study. It’s a strong story about an influential user. On the training day it gets five minutes amongst lots of other similar ‘update’ information. It could go something like this: “Here it is (holds it up, points to the carrier bag of goodies, shows a web page or passes one around). Doesn’t it look good? You’ll note that it’s in the new company colours. I’d like to draw your attention to the third paragraph where the CEO says his company saved $5m dollars in the first week alone! OK, lets move right along, we have so much good stuff for you today!” An opportunity has been wasted. Something that could make the difference in a sale may be lost in the noise. This brings us directly to the question of style.
There has to be involvement if training has a chance of changing behaviour. It is naïve to think that anyone will learn anything if you expose them to 40 PowerPoint slides an hour with only 10 minutes for Q&A. This isn’t training. It’s not even communication if the speaker is in ‘transmit’ only mode! A lot of this type of training content shouldn’t be presented at all. Sales collateral needs to be available so that it can be found, quickly and easily, and produced when and where it’s needed. If you want to make sure that collateral is used to best effect during the actual sales meeting then you need a different approach. In part this is about “situational fluency” as described by Mike Bosworth in his book, Solution Selling. Let’s go back to the case study and look at how we might establish a model for behaviour that maximised the impact of the story.
Wouldn’t it make more sense to let the sales team read the case study for themselves, and react to it? You could ask them to anticipate typical prospect objections and work out how these could be pre-empted. Discussions like this are a way to capture very valuable information. Sales people understand how their customers think and act and it is information the rest of the business can benefit from. Now, with a little careful preparation before it’s presented, the case study will have real impact. You can even secure agreement on when the team will use the new approach. Not just participation, but a real commitment to action. This approach takes much more time. If it’s done properly it is a lot more enjoyable for all the participants, who also learn more from, and about, each other. Making things more fun helps to secure the desired outcome.
As well as value for management there has to be value for the sales people who participate. Don’t call them together just to train them in the use of the company’s new CRM system! Designing and delivering a good training session is about having clear objectives. These, and an understanding of the group to be trained, provide the definition for both content and style. Training should be about helping people to be more effective in their role. To achieve this there has to be a change of behaviour which is seldom easy, but can be done. It’s like selling really – the most important part is the planning and the preparation!
Bob Brown Report on “Games War – Video Games – A Business Review” by Michael Hayes and Stuart Dinsey (1995) 150pp
This slim volume by Hayes, a marketing man, and Dinsey, a journalist, is a good read. There are lessons for anyone wishing to operate in the very fickle world of consumer software.
It is about the growth and decline of the market in games consoles and the software for them, which had its heyday between 1988 and 1994. It was an amazing market: in its peak year, 1992, the UK market for games software alone was over £500m and was larger than such huge markets as: All canned vegetables; Dog food; Bicycles; Ladies perfume; and Cinema receipts. This was a market where 50% of the users were children aged 5-13 and two thirds of those were boys. This tiny target audience was one quarter of the target for CD players but which it beat by a huge margin.
The book contains various facts about size and growth of the market and traces the various 16, 32, 64 bit and handheld offerings. The hardware initially came from various stables but quite soon the race became a fierce one between Sega and Nintendo who forced out the others (such as Amiga and Commodore) and each had 50% when the book’s story ended. There were about 250 software houses involved, a large proportion from the UK, and these released thousands of titles, of which rather few could be classed as successful. The market was far more fickle than any other market and even the experts were at a loss to predict which games would be successful before the event. Marketing of games was a factor but was no substitute for a game that provided a good interactive experience.
Distribution was curious. Generally it wasn’t necessary to have wide distribution because the users were prepared to hunt far and wide to get the game that had a good write-up and reputation. Hype didn’t help except for making a good game a somewhat better success.
Towards the end of the period covered, the market was in severe decline. There was serious overstocking, discounting, weariness with new hardware offerings, too many outlets and a 50% price erosion by 1995. There were studies by the Office of Fair Trading and to the Mergers and Monopolies Commission concerning the industry and worries about health risks. Further, by 1995 PCs were capable of providing the graphic performance needed to run the best games. The market would never be the same again. Meanwhile Sega and Nintendo had enjoyed amazing profits.
The lessons which might be useful to future generations of marketing managers in related fields are well worthy of study. Compared with marketing and selling to industrial and commercial sectors, the market was huge, explosive, nervous and fickle. But if you want to be frightened or relish an adventure yarn, read on.
Richard D Henshell DTI ICT Carrier programme "...ideas for adapting and transferring successful existing applications of ICT into or throughout engineering sectors....". With £6m funding for the first two years, and the possibility of the same again in 2002, ICT Carrier aims to share costs up to 50:50 with participants and improve the competitiveness of the engineering sector.
The third call for project proposals closes on 26 October 2001. If you are interested, please register by 14 September. Details can be found at http://www.ictcarrier.co.uk/
COFES 2002
COFES represents a new type of event. Unlike most conferences and tradeshows, COFES is not about selling or listening to speeches. COFES is designed for decision-makers (CEOs, CIOs, CTOs, presidents, vice-presidents, directors, etc.) from the vendor, user, press, academic, VAR, investment, consulting, and research communities. The goal of the two-day event is to bring clarity, vision, and focus to the definition of the issues facing the engineering software community, and to speculate about what is just over the horizon. More details can be found at the COFES web site http://www.cofes.com/ Cambashi researches best practice and assists IT suppliers in best practice implementation. For more information on Cambashi services please email info@cambashi.com e-Xpertise in Industry operates as an opt-in email. The opt-in policy means we never intentionally send any email to anyone who does not wish to receive it. To subscribe: send an email with the word "subscribe" in the subject line to : expertise@cambashi.com © Copyright 2001 Cambashi Ltd
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