Technology is complex. In the world of corporate Information Technology (IT), thousands of products compete for mindshare. Many startups with enterprise solutions struggle to position their value against larger, established IT vendors. In order to compete, startups should leverage a structured process for evaluating and selecting among multiple options the solution that best fits the needs of your prospective customers.
The Method to the Madness
In my experience, most companies take an unstructured approach to choosing an IT solution. At best, companies looking for an enterprise solution may conduct a brainstorming session to compile a long list of requirements that eventually feeds an RFP. Companies then evaluate vendor responses, apply some score to each line item requirement of the RFP, and then attempt to select a solution.
Though this process provides some structure, I feel it is still suboptimal. Buyers tend to struggle to digest vendor responses to fifty or more individual line item requirements. It becomes difficult to evaluate and compare solutions because customers struggle to see the forest through the trees. In addition, any attempts to apply different weights to individual line item requirements complicates an already complex problem.
Back when I worked as a management consultant, I developed a process that I whimsically called the Seven Sacred Abilities to provide a methodology and a framework to address some of these issues. The process involves grouping individual requirements into seven higher-level, prioritized categories as depicted below.
Each ability is further defined below:
- Affordability: Affordability assesses the initial capital and on-going operational expenses to acquire and operate the solution. This data provides the cost component of a return on investment analysis.
- Availability: Availability deals with system uptime and fault management requirements. Considerations such as management of scheduled and unscheduled downtime, mean time between failure, mean time to recovery, recovery time objective, recovery point objective, fault detection, fault monitoring, fault correlation, and fault handling all contribute to fault transparency and system resilience.
- Capability: Capability considers the product architecture, features, benefits and compliance with industry standards or regulatory requirements. A large portion of the requirements usually focus on product capabilities.
- Interoperability: Interoperability takes into account the solution’s ease of evolution, integration, extensibility and flexibility. With the current market trend towards cloud native architectures, microservices, API integration, and automation/orchestration, interoperability often becomes imperative to modern technical solutions.
- Manageability: Manageability evaluates the solution’s overall operational capabilities, including building blocks such as transaction-level metrics that feed system-level analytics, single console management, support for standard management protocols and the ability to integrate with distributed systems management frameworks.
- Scalability: Scalability evaluates the product’s handling of high transaction volumes, concurrent users, overall throughput, speed, latency, data size, and the ability to grow via smaller stepwise upgrades versus large-scale investments.
- Vulnerability: Vulnerability considers the overall security infrastructure, product hardening, industry certifications, and its fit within a multi-layer, integrated defense system.
I usually recommend customers prioritize these seven abilities using the following scale:
- High: the most important abilities that will generally serve as the key selection criteria. Solutions that score well on these key abilities will usually rise to the top of the product selection process. In general, there should be two to four abilities classified “high” — any more than four usually suggests a buyer with unrealistic expectations and an inability to prioritize.
- Medium: the abilities that every solution must satisfy, but generally won’t serve as key differentiators during the product selection process. Solutions with higher scores on these “table stakes” abilities rarely influence the product selection process. In general, there should be two to three abilities classified “medium”.
- Low: the abilities that do not factor into the product selection process. The only exception would be any solution that fails to meet the criteria in some extraordinary way. Good, average, or below average scores don’t affect the product selection, but a terrible score may eliminate a product from consideration. In general, there should be one to three abilities classified “low”.
Once these seven abilities are prioritized, individual requirements are then compiled and categorized. Vendor responses to line item requirements can then be streamlined and more efficiently evaluated.
Quantitative or Qualitative?
Many buyers use a quantitative approach to weight and score individual requirements. The buyer creates a spreadsheet with formulas that calculate a final numeric score that supposedly results in a winning product selection. Sadly, problems plague this seemingly objective process, often resulting in a product scoring well due to mathematical coincidence rather than its actual fit to the requirements.
One major problem is the sensitivity of this mathematical model based on the underlying assumptions. A small change to the weight of a certain requirement can result in a completely different score for the short-listed products, as illustrated in the example below:
Another problem is the weights chosen for each requirement and how they semantically compare to each other. In Scenario 1 from the example above, Requirement 1 is weighted 30%, while Requirement 5 is weighted 10%. But is Requirement 1 really exactly 300% more important than Requirement 5? In Scenario 2, Requirement 1 is 167% more important than Requirement 5 (25% vs. 15%). It’s difficult to say which scenario more accurately captures the true business importance of the individual requirements.
Because of the difficulty of building a quantitative scoring model that accurately reflects the business need, I recommend a qualitative scoring system. I typically use the following (somewhat subjective) grading scale:
- Very Good
I recommend building a table that summarizes your findings for an executive audience. Annotate the grades with several salient bullet points supporting your score. In the (slightly dated) example below of a bake-off of Cisco home office firewalls, the four high priority abilities are presented, along with grades and details supporting the grade.
Building this one-page executive summary helps your customer present their findings and overall recommendation to their internal decision makers. Capturing several bullet points for each grade helps your customer respond to questions that arise during the discussion.
The Value of Goodwill
Besides the inherent value of using a framework for product selection, startups instill confidence when they follow structured processes — it says you are a veteran that has done this before. You also build goodwill when you provide your customers the process and tools to make the right decisions. In addition, your leadership during the sales cycle commands respect and elevates you to trusted advisor status. These intangibles solidify your relationship with the customer, which can tip the scales in your favor should your solution be considered roughly equal to that proposed by another vendor.
As any startup veteran will testify, winning customers is critical to your success. Maximize your sales effectiveness by leveraging the Seven Sacred Abilities to create a clear, logical, and effective process for competitive product sales.