And Vijay Says…

As part of my ongoing statistics education ( data science of you want to make it sound really important)  , I had the opportunity to analyze historic sales forecast vs actual sales of a company recently to find out optimization models . Since managing sales is something I have done and continue to do – it was all the more fascinating for me to understand what the data was “supposedly” pointing out . 

And then an old buddy called me out of the blue and while talking shop – he mentioned that despite extra focus on accurate forecasting , the new CEO of his company was constantly frustrated with his sales leaders . A month before quarter close he accused them of sandbagging the forecast – and he got the numbers he liked as a result . Two days after quarter closed , the results didn’t look anywhere close to forecast and he yelled at sales management for bad forecasting . We both found it funny and sad as he was recounting this story – it’s all too common a scenario .
Let’s get tools issue out of the way . Although they won’t admit it publicly – companies that build sales management and planning tools also mostly do sales forecasting on a series of spreadsheets . Some put a fancy UI on top for C levels to see the results . Essentially – very few companies have figured out a tool to enable end to end sales forecast management  . Tools are all great – just that tools are not the problem this business function is low in effectiveness. Tools can help somewhat with efficiency – but not effectiveness .

Why do people bother with forecasting to begin with ? I will tell you my view – others might have their own opinions. The ideal reason for me is making prioritizations on resource allocation, followed by predictability . 

I like my sales reps to be “selfish” resource hoggers who do everything they can to win the deal (ethically etc of course). I want my sales managers on the other hand to provide the company view and prioritize which deals get what resources . This provides healthy tension in the system and gives me enough information to make executive decisions ( hiring , changing structures , discounting principles etc). 

Predictability is only a second aspect for me – but it is a close second . For good or bad – investors need predictability every quarter whether it is public or private capital markets the company operates in . And this causes a lot of “tail wags the dog” scenarios in sales forecasting . 

Pipeline management is a perfect casualty . Qualified pipeline is what we as sales leaders think drives sales . That is possibly true too – but what the sales system tells you as qualified might not be real in most cases . Which brings us to this thing called “coverage”. Conventional wisdom in my indistry is that to close $1 in sales , you need somewhere between $2.5 to $4 in “qualified” pipeline . We even.        pay some teams directly for drumming up demand to make sure our reps have such coverage . Plus the reps bring in their own opportunities . 

More often than not – reps won’t have the coverage their upline managers expect . There starts the exercise of low quality opportunities getting created to make the numbers up . Some times it is done with best of intentions – overly optimistic reps just think they have a real opportunity and their managers either share their optimism or just are too lazy to test for qualification till they get too many questions . End result is that a wrong pipeline number is set and published that is 3X the expected sales number from the CFO . And when sales doesn’t come close to that – or when sales exceeds the “call” by a lot , no one knows why. Should anyone really be surprised ?

Let’s look at the evil effect on resource allocation too before we wrap this up for today. Two thirds of way into a quarter , experienced managers will know whether they have a prayer of hitting quota for their team. This usually starts the process of parading top execs from the company in front of top execs at customer . The CEO of a vendor who goes before the CEO of a customer at end of quarter very rarely has the ability to say no to unreasonable asks . So they end up “buying” business at high cost of sales . Some Sales reps and sales managers who have a lot of experience know how this game plays out and occasionally do set up things this way for the top executives . You can’t blame them – your poor forecasting process and the metrics you use to compensate sales people are now working against the best interests of your company . 

Bottom line – before sales managers over invest in sales forecasting , they need to think through the holistic picture of what they want to achieve as end result . Situation differs for all of us and hence I don’t think there is a prescriptive one size fits all solution . I definitely will be rethinking this all over from scratch over the holidays . 

Is my cup of green tea frappucino half full or half empty ? 

  

A good part of my time is spent spotting new talent and grooming leaders in my team . And since we have a lot of demand for talent at the moment – I am spending a lot of time interviewing candidates . Several folks have reached out in private to ask me what it takes to do well in such interviews .

First – it is easy to impress me . So don’t stress out on that  . I don’t bite (and very rarely even bark) . Second – impressing me alone doesn’t get you a job . We have a systematic screening process to eliminate bias . It’s not perfect perhaps – but it lets me be me and my colleagues be themselves and yet we end up collectively as a good evaluation team . And third – because we know each other through social media doesn’t automatically make you more qualified . 
So here we go 

1. Be pleasant 

We hunt in packs normally – whether it is sales or delivery . If you are not pleasant to be around on interview day , I doubt you will survive in a high stress customer engagement where several of us need to depend on each other to get to a successful end result . Dress for the job you are interviewing for – there are no bonus points for looking extra sharp . 

If you prefer working alone – do tell me upfront . Occasionally there are jobs that can work with people working in a lone wolf fashion . But it’s better we discuss that upfront because vast majority of roles in my team will need you to be part of a team .

2. Be honest 

Don’t tell me anything you can’t back up if I push back . Especially on your actual project experience . I am a hands on techie myself . If you claim that you are an expert programmer , I might push my MacBook to you and ask you to debug a piece of code , or write a small program or something . My intention is not to get you to a “gotcha” moment – it is more about understanding if you can debate back and forth with me on a topic , technical or otherwise . But in the process if you prove to be dishonest – you won’t get hired by me ever again . 

I don’t expect you to be an expert in all aspects of the job . But I do expect you to know enough on the key skills and prove to me that you have a willingness to keep learning all the time . 

I once interviewed a programmer who claimed to have done some complex program for a customer I knew . He explained clearly every design point and I really liked him . I asked him if he wrote the code or if he just maintained it . He assured me that he wrote the original code . I didn’t hire him despite his excellent tech chops – because he was being dishonest. I wrote that original code ! It was just his bad luck that he ran into me with that story – but that is what happens when you are dishonest .

3. Explain with examples 

For example – If I am hiring you for sales , I expect you to tell me exact figures of past accomplishment . Don’t just tell me “I killed it” ! Explain to me how you overcame specific buyer objections . Tell me about your good years and bad years in terms of quota coverage and explain what made them good or bad . 

If you are a developer or Ops person – show me your code contributions and give me specific examples of both good and boring stuff you have done . 

Do expect me to challenge your claims and I might choose to role play as a customer . I will need you to provide references and I do check all references . 

Many years ago – I was interviewing a young lady for a BI Architect job in my team. She had impressive tech skills . And then she told me “I will need to work from home when I have my periods . I cramp a lot at that time and I will get easily irritated”. I didn’t exactly know what to say ( my wife was pretty stunned too when I told her about it later) , but I hired her . I did set the expectation with customer and my team about this and she totally hit it out of the park . 

4. Explain what makes you interested in the job 
Do some research before you talk to me on interview day  . What is it about the job and the company that interest you ? What are your apprehensions ? What support will you need in terms of training , Presales support etc ? Why is this different from your last job ? What makes you excited and what makes you bored ? Are there things like travel restrictions etc that I should know ? What is the growth you expect drive for yourself , the company and the customer ?

Remember – the more information you give me , the more is my ability to find a suitable position for you . You might not be the best fit for my team – but at any given point I know other open positions that I can refer you to. 

Couple of months ago , a young technologist from Silicon Valley was interviewing with me . His skills were such that I really thought he would not take up a job in my team and would join one of the local startups . I asked him about that and he replied “I don’t want to build consumer toys – I want to change the world of enterprise data”. I hired him ! 

5. If you have questions, ask me 

You should be evaluating me and other evaluators just as we are evaluating you . If you have questions for me – please ask me . Interview days are penalty free zones with me . Ask me anything . I will tell you everything I know about that – and if I cannot say something for confidentiality reasons or something , I will let you know . 

Don’t ask me questions you can find out answers by yourself easily by looking at company’s website or on Internet in general . Also if my answers are not satisfactory – push back on me . If we need to work together well – we need to hold each other accountable and this is a good test for you and me both .

The more senior the role – the more are my expectations on what questions you should be asking . For executive hires – it’s mostly going to be you asking me great questions and less about you answering my questions . 

6. Don’t take the job if you are not FULLY sure this is what you really want

If you join my team, I expect you to do so with full excitement with little to no apprehension . So use the interview and hiring process as the time to get rid of your apprehensions . Talk to your family and friends before you take the job to make sure your job is aligned to your personal life and goals .  If you have even a tiny bit of doubt that this is not the right team for you – do yourself and the team a favor and don’t join . 

As some of you know , after spending a few years in software industry , I am back in my old stomping grounds . The question I have been asked the most is whether anything has changed in the time I was away , and what I see as the future . 

Plenty of things have changed and none of that surprised me . What has surprised me is the velocity of change – some things have changed way faster than I thought , while others have not moved an inch . Here are some observations and “predictions” for what they are worth. As always – all of this is strictly  my personal opinion, and not that of my employer.

1. On premises ERP is mostly a maintenance business now 

There are still some big projects , but not as much elephant hunting is left in SAP and Oracle lands for huge new projects . Customers are mostly sweating existing assets and some are moving to best of breed cloud . Plenty of maintenance work remain for integrators . Business opportunity is all in bringing new value out of existing investments . I haven’t yet seen any kind of mass exodus out of on Prem solutions to cloud in ERP space – just more of a cost containment play . 

The few big ERP projects that remain are mostly on M&A deals where multiple systems get consolidated . A lot of customers seem to be in a holding pattern even for relatively less expensive upgrades . 

SI community knew this was coming and were planning to change their business models all along . What has caught people by surprise is how soon this happened – probably in less than half the anticipated time 

2. Plenty of custom build and SaaS work to go around 

Many IT organizations have swung around from packaged solutions to custom built solutions . This will need significant retooling from SIs to adapt . I also see an interesting conflict happening between infrastructure software vendors and SIs in this field .

In newer technologies (especially opensource) , the consulting arms of software vendors have better skills than SIs. However when it comes to end to end work needed to make a production quality system , SIs have the upper hand . Rather than working together – I often see a battle for account control trumping the needs of the customer . Hopefully this changes quickly 

The other kind of work that is seeing volume is SaaS implementations and associated integration work . These are significantly low in ASP compared to large ERP projects of old days. They also need a fresh new approach . SI world – barring few exceptions – hasn’t learned to do this at scale 

3. Open source has arrived , but it is largely confusing 

Compared to three or four years ago, enterprise customers are all generally happy to work with open source software in production . Skill gaps are getting addressed too to some degree. What is not getting addressed adequately is education on licensing .  Vast majority of customers are confused – and I get confused too from time to time – when multiple open source and propreitory tools are needed to be licensed in same project . And there are still plenty of customers who think open source is free – both amongst customers and within SIs. One SI even has a “platform” built of community versions of several opensource systems that they claim to have put in production, even though there are no security features in many of its components .

4. Most customers and many SIs are not ready for “outcomes based” and “as a service” type projects 

I am a big fan of “as a service” model . The current situation frustrates me to no end and a lot of inefficient cycles are spent both in Presales and post sales  . With LOB buyers , outcomes based conversations are easy . That is because they do their daily business that way too with risk and reward based on performance . But when this conversation happens with IT and procurement , there is stiff resistance . A good majority of third party buyers agents are also stuck in the past on this topic . Even after they buy an “as a service” model , some customers get upset when they see a different person solving their problems each time even though all SLAs are met . 

What is also hindering its adoption is a set of SIs who are not capable of offering “as a service” projects using significant FUD to keep customers in a time and materials mould . 

5. The transition from one humongous project to several small ones is stressing out many SIs

Large SI businesses have traditionally been built on the idea that most of the revenue comes from a small set of large projects every year . This is shifting to the opposite end of the spectrum in a hurry . The disruption this causes to SIs is significant and many are not coping well with having to redo their org structures , pricing , methods and tools , recruiting and so on . Customer spend in aggregate remain more or less the same – just the mode is different . 

6. Plenty of consolidation will happen in the SI world 

Every large SI is buying smaller shops now, in SaaS and BigData spaces especially . And the valuation is pretty low – about 1 to 2X of annual revenue in most cases . This makes me believe that a lot of small companies will get bought out in the next year or so. I also expect larger SIs to more transparently engage freelancers in their projects in a big way in near future . 

There is plenty of good news too . SI work is not boring anymore and we are able to hire some top talent . Cognitive /big data / IOT etc are all real now with actual products , and with live customer projects . We are now at a stage in the cycle where no two projects look the same – and that is good news for us consultants . There is never a boring day in my world off late .