There’s little doubt that the challenges that we were faced with in the latter part of 2008 will persist through (at least the first part of) 2009. I know that doesn’t make for a very Happy New Year, but it’s probably the reality we all have to confront. Different commentators and business leaders have varying perspectives, but the most optimistic outlook that we can hope for is that coming change in the US administration will bring with it a lift in the collective confidence, and that this lift will in turn fuel business activity.
But it’s a long way back to regain the ground lost during 2008. The depletion in corporate value during the last twelve months wiped out all of the gains from the previous seven years! No matter what actions are taken, the recovery will be slow and there will yet be more pain.
So what do you need to do to face up to the challenge? There is one important trend that I suggest you consider as you develop your sales plan or business strategies for 2009, and that is: Your customers will want to outsource as much as they can in 2009, and you need to consider how you can position or re-package your product or service offering to meet that need. Let’s consider the trends that I think support this theory.
In the technology world, during 2008, we’ve seen a dramatic increase in the SaaS (Software as a Service) business model. This is more prevalent in CRM (salesforce.com and Oracle on Demand) that anywhere else, and it means that instead of paying a large upfront license fee and installing the software on your own hardware, in your own premises; instead you sign up for a monthly or annual subscription fee, and you ‘rent’ the software (and the provider’s hardware), accessing it over the web. We’ve also seen the growth of PaaS (Platform as a Service) and the heavy investments by many (Google, Microsoft, Sun, etc.) in major Cloud Computing initiatives. In reality though XaaS is merely the leveraging of technology to outsource tasks that would ordinarily be undertaken by a company’s own resources.
Delivering a product as a service isn’t limited to software. We’ve seen it operate effectively in HR, Legal Services, Debt Collection, Marketing, Logistics, Manufacturing, Sales, Product Design and Development, and many other areas. Whatever area you are in, it’s likely that someone somewhere purports to offer the same benefits to your customers, though at a much reduced cost, and with far less upfront investment. The latter point is really important when companies are focused on cash conservation, as is the case with most organizations today.
In recessionary times, most companies, large and small, will look to outsourcing as they restructure their businesses. Recent conversations that I have had with senior executives in three different Fortune 100 companies point to a vigorous focus on this mechanism to reduce costs. Expense Reduction is the most frequently cited reason for outsourcing, but that singular focus sometimes overlooks many of the benefits. It’s worth considering some of the other benefits, so that you can think about how you can position your product or service to your customers to meet this impending requirement.
- Reduce Capex
- Increase Efficiency
- Reduce Headcount
- Get Resource Just in Time
- Focus on your Core Business. Do what you’re good at.
- Reduce Risk and Increase Flexibility.
There’s one final example of XaaS being an important factor in this expense constrained and travel restricted world – particularly for those in sales or in the sales learning business.
If you’ve been following the S20N for a while, you know that we’re heavily biased towards leveraging technology to make the Knowledge Transfer, Knowledge Application, and Knowledge Retention related to sales learning more effective.
When we launched our Dealmaker Virtual Learning System (consider it LaaS or Learning as a Service) on November 22 last, our purpose was to provide for our customers, an alternative, or complement, to traditional classroom based sales training. We were inundated with requests! The result – we expect to do our best ever quarter (QE Jan 31). We thought there was a need and related benefit that we could provide, but we did not expect the response that we got.
I cite this just as an example to underpin my initial hypothesis. 2009 will be the year of XaaS. In business model terms, everything will be delivered as a service; not 100% of everything, and probably not 100% of your customers – but enough that you should care deeply about how you surf this particular wave in otherwise very choppy waters.
Happy New Year