Indian IT industry has underestimated the role of good sales people. No wonder, we always seem to have the ability to deliver almost anything but perpetually have our Achilles heel in selling and marketing.
Is it that, with offshore rates being typically one-third of onsite rates, Indian IT companies enjoy a great price advantage and really don’t need good sales people?
As the market gets crowded, as offshore becomes mainstream in the Western world, offshore vendors will realize that their primary competition is going to come not from onsite vendors but from their own offshore brethren. When this happens, everyone will be offering more-or-less the same prices. The 1:3 price advantage will go away, and companies will need to employ much better sales people, who can sell on value and not on cost and who can negotiate with customers for better terms and conditions.
In the current scenario, many IT sales people simply note down what their customers demand, come back to their offices and start doing internal selling to get these demands accepted by their company’s management – regardless of how unreasonable the demands are. Worse, some of them start putting tremendous pressure on their delivery teams to start the delivery process even before getting any form of order confirmation from the customer.
Being in the service business, it is important to meet customer requirements. However, there has to be a limit. Senior management has to take a serious look at whether the contractual commitments make business sense. I am not saying that each deal, or the very first deal, should make business sense. It is fine even if the deal makes business sense only in view of future business potential. Those are calls that senior management can very well take.
There are many non-IT companies who have solid processes to scrutinize a customer order, make sure it makes business sense and only then begin execution of the order. Even within the IT industry, there are a few examples of companies who follow such processes. But, many IT vendors begin delivery of projects – including sending their staff overseas – even before a firm purchase order is received, let alone waiting for completion of their internal order acceptance process or signing of the contract. The customer concludes that the vendor is very desperate for business and also figures that the vendor has invested too much time, money and effort to withdraw from the deal, however one-sided the terms and conditions. This naturally diminishes the vendor’s ability to negotiate favorable terms and conditions with the customer whenever such negotations do take place.
Many customers in the Western world, especially those companies that are new to offshoring, are not really aware of the significance of their demands. They ask what they are used to asking, without realizing the impact in the offshore context. Many outlandish demands stem from a basic ignorance of how the onsite-offshore model works. For example, I know of one customer that expected its Indian offshore vendor to work during the regular US business hours, which translated to night shift in India. This was not for some BPO or product support activities but for a straight-forward development project with a 18 month delivery period! They were used to working with their existing software vendors (all located inside the US) in this manner, so they really hadn’t thought too much before making their demand. Luckily, the vendor’s sales person was sensible and could quickly make the customer understand that their demand was neither necessary nor practical, at least not at regular offshore rates. The customer agreed for a two hour overlap between the US and Indian working hours to facilitate reviews. This was fine for the vendor, and a win-win situation overall.
Another significant area of improvement is in getting an undertanding of contract terms and conditions. Most IT companies tend to think that negotiating a contract is purely a legal function. This is only partially true. Every contract has business and legal clauses. Business clauses (such as working hours, response times for support calls, etc.) cannot be negotiated by legal people. Sales and delivery people need to resolve these before the contract even goes to the legal department for scrutiny.
I have come across salespersons from some IT companies who have prior working experience in non-IT industries. Being mature and not operating with a one-third price advantage, many of these industries need excellent selling skills and tend to have far more mature selling and contract negotiation processes. Their salespersons can often better position their company, products and services, and negotiate superior terms and conditions. Once they are trained on IT, they can make good sales people in the IT industry.
Going forward, I think Indian IT companies is going to need many more sales persons of that type!