In the current global economic climate we are observing a plethora of technological, fiscal and competitive trends.
These constantly reshape the global environment in which the outsourcing industry operates. Outsourcers are under increasing pressures from new entrants to the market, cloud based solutions, virtualisation and offshore – onshore battles for improved returns or greater service.
Successful bids are no longer the prerogative of major transnational corporations. The days of multi-year, single supplier mega-deals has been threatened by smaller, multi-supplier deals. Much of this is because of the advent of cloud computing, driving down prices and opening up competition.
Organisations have had to become increasingly strategic about the outsourcing deals pursued. The following case study examines the role of Consalia in advising the Hewlett Packard (HP) team through a bid process, to potentially work with one of the World’s largest mining and natural resources corporation, Anglo-American.
Case Study: HP & Anglo American
Given that conversion ratios on deals with new customers are typically very low (around 20%), bid teams with any sense of self preservation would never pursue a request for proposal (RFP) for a new client where there was no assigned account manager and little information surrounding the contract. However, when Anglo American approached HP, the potential of a seven-year contract worth hundreds of millions of dollars, meant that sizeable outsourcing opportunities (for both the Anglo data centres and Voice Networks) had to be recognised.
The incentives were sufficiently interesting for HP to convene a Winning Value Proposition intervention workshop (WVP) with the Sales Performance Improvement Company, Consalia. I was fortunate enough to lead the workshop, which was aimed to create a mind-set in the bid team that would guide their approach to the deal. The four key mind-sets emphasised were Tactful AudacityTM, Client Centricity, Proactive CreativityTM and Authenticity.
Although Anglo was clearly interested in HP as a vendor, given its global status, I advised HP to decline the opportunity in a tactfully audacious way. HP cited that while they felt they had a great solution they simply did not have the relationship required to calibrate the solution. This was a bold statement, which could have resulted in a negative image for HP, however, the response was quite a calculated one. Consalia felt that this response would generate one of two actions. Either Anglo would accept that HP were out of the race, in which case HP would have mitigated investment in a high-risk RFP or Anglo would invite HP to get to know them better, allowing them to establish the relationship required. This is exactly what happened.
The training offered by Consalia placed great emphasis on a deep understanding of the customer. The values of Tactful AudacityTM and Client Centricity led HP to push for a meeting with all of Anglo’s international chief information officers and business units to clearly establish a united understanding of the issues and challenges faced by the organisation. To gain greater client insight HP also requested site visits to some of the mines in Africa and South America. With the mines covering vast tracts of land and often separated by great distances, HP realised they were able to suggest more effective service level agreements and as such, advise Anglo American to revisit the due diligence model proposed for the outsourcing solution.
Following the visit to the mines, the HP team practiced Proactive CreativityTM , a method of lateral thinking taught during the WVP workshop. During their visit to the mine, they had learned that one of the major issues was in tracking assets – both human and equipment. At the time HP had been working on some interesting Radio Frequency Identification Technology (RFID), which could resolve the problem. They, therefore, invited some of the Anglo team down to Bristol to visit the laboratory. This really helped Anglo to see the potential of the new and emerging technologies.
Throughout the deal process, HP had displayed a genuine desire and authenticity in getting it right for the client. Consalia was instrumental in preparing the HP bid team by creating the right mind-set and embedding those values in the Value Proposition and Commercial Strategy.
Once everything had transpired, HP had strongly positioned itself to win the contract away from the incumbent, T-Systems. Their outcome was an outright success, a £277M, seven-year deal that was closed within eight months.
Other world venture partner (WVP) successes with HP
Between 2006 and 2008, Consalia conducted a two-year joint research project with HP on a global scale. The WVP interventions were tracked over dozens of £31M and outsourcing deals. The project acted as a huge validation of WVP as a tool. After the two years were up, those bid teams that used the WVP methodology closed out 67% more deals, a rate two-and-a-half times higher than before.
Find out more at www.consalia.com or contact: firstname.lastname@example.org
About the author
Dr Philip Squire is the CEO of Consalia, a sales performance improvement company whose mind-set approach to sales that has delivered over $6.75Bn for clients in just over six years.