Today we're launching a new blog series called Databook Exec Insights, where we interview executives involved in buying or selling complex products, solutions and services.
We're pleased to welcome a friend of Databook, Vinay Dhawan.
Vinay is Vice President of IT at a global corporation where he's responsible for managing hundreds of millions of dollars in technology spend. He has a unique perspective that he sat down to share with us. We hope you enjoy it.
Vinay, that's so much for taking the time with us today. We'll jump right in.
Tell us about your IT budgeting.
Every summer we start working with our business partners on defining next year's IT budget. Our goal is to figure out what the business partners need, proactively, and align IT strategy to the problem itself.
Next we scope projects at a high level: what does success look like, what are the criteria used to measure success, and estimates for the total IT budget required.
Then we assess the requirements by department against the total IT budget, finalize priorities with our business partners, and seek pre-approval.
How does your budgeting process drive y0ur buying cycle?
It always comes first. We only create the business case after a project has been approved. That way we can focus first on why we're doing something...resolving the problem or grabbing the opportunity--and then focus on how to do it or who to do it with.
We spend months ensuring that we understand the problem, its' symptoms and contingencies.
When we do build the business case, we look at the hard benefits such as sales uplift and profit uplift, soft benefits including efficiencies, and resulting metrics such as payback, ROI, NPV and IRR.
Only then do we bring in our CFO for final expenditure approval.
And finally, we start to engage vendors.
How do you handle off-cycle requests for new projects?
Our yearly planning process covers most large projects but there is some contingency budget.
Before we fully approve budgets for the coming year, we work with business partners to deep-dive into the execution journey. What it looks like, timelines, contingencies, resources.
As part of this process, we look at smaller projects such as data science modeling for improving price optimization, as well as larger projects requiring an RFP, such as an ERP replacement.
Smaller projects don't require an RFP and can be handled by the individual cost centers. Larger projects do require an RFP and we often engage with consulting partners on these acquisitions.
What are the biggest challenges in the buying process?
Most reps don't care about our problem. They come in to demo their products, not to provide value to us. It's not valuable because we can gather the product information ourselves. Analysts publish most of what we need.
What we need is context and understanding. They try to convey this with case studies but even that is not helpful. They only share the case studies that show the best-case outcomes but reveal none of the risks or potential execution issues. We need to know exactly what to expect, good and bad.
95% of reps are transparent that they care about their quota, not our problem.
Interesting, so what would you say the best sales reps do?
Good reps, on their own dime, take time to understand us, our problem and the context. They set up white-boarding sessions to share knowledge and frame the problem, engaging with different stakeholders across business and IT.
The best reps prove they understand our industry value drivers and our competitors, and insight to what's going on with our business. They actually become a 'value partner' by creating the right business case for us.
Tell me more about being a value partner.
As an example, one of our vendors is a Top 5 technology firm. They are a very good partner because they approach this relationship by consistently offering value to us.
To begin, they have worked to understand our business intimately. Then on quarterly basis they have governance meetings to discuss how projects are meeting timelines, scope and cost criteria. Finally, they work with the business team to determine whether and how much the business case is being realized.
The bottom line is the bottom line: results. We only continue to work with vendors with whom we are realizing the intended value. Over time, these vendors become value partners with whom we renew and expand for years to come.
Any hot tips for our readers?
I won't meet with a new vendor who doesn't bring a client to the first meeting.
Thanks for being our inaugural executive for Databook Exec Insights, Vinay. This was great.
Rebecca @ Databook