Disruptive Innovation is changing the B2B IT Outsourcing ecosystem in 2016
The accelerated ability to access information with just a few keystrokes is changing everything – including how customers make procurement of IT Outsourcing services. Correctly implemented such a service fulfill all the criteria defined as ‘Disruptive Innovation‘
The hardest thing to grasp about B2B selling today is that customers don’t need Marketing and Salesperson the way they used to.
“Research shows that up to 60% of decision-making in B2B is made before the Client approach the market”
In the past sales representatives scanned the markets and discovered customers’ needs and sold them “solutions” – generally speaking high value, low frequency and complex combinations of products and services. This worked to some degree because customers didn’t had transparent on-demand access to global information about the IT outsourcing market.
Nowadays Customers are spending months researching strategic solutions before they even starts a conversation with potential Providers. To make use of outsourcing is for some Clients the most important decision since since the establishment of their own company and in many cases a path out in unknown territory. National and regional networks on both Client and Provider side can be of tremendous help in the establishment period but non of these networks and associations have so far had the capability or purpose to do matchmaking on a global scale. Even well established advisory companies and government backed services has so far relied on knowledge about the most established players on the market. This may work fine when Clients need scalabilty of hundreds or thousand developers in a short time-span, many just forget that this kind of scalability is only needed by the very few and will not be a perfect match for more than 80% of the market that consist of small and medium sized Clients with a need of 5 – 50 developers within specialized fields.
A few start-ups have lately interpreted the predictions and need for change as a sign to go in the footsteps of the freelance marked and offer digital one-off broker services. These marketplaces are often generated with the base in own established development centers. This will be a very shortsighted investment and has by no means anything to do with ‘Disruptive Innovation‘. First of all the customer will never know why they are advised to use a specific Vendor in the Brokers portfolio and the lack of transparency will give associated Vendors the same problem. Secondly the customer will be reluctant to face a (open or hidden) 5 – 20% price-tag on something that by nature is a sales service. Last and least, these services bring nothing new to the IT Outsourcing ecosystem, they are simply just digital versions of old fashioned Broker services.
What the Customer need is in contrary a 3rd. party that has stepped totally out of the business-case in order to provide trustworthy, independent, on-demand matchmaking services that ensure access to global transparent information and facts about small and medium sized Vendors that has undergone a due diligence of their company DNA. If such a service furthermore is made subscription based, all parties in the ecosystem get transparency, trust and a reduction in overall expenses that easily exceed 15% of yearly revenue/expenses just on the marketing, sales and advisory side.
“Gartner predicts that by 2020, Customers will manage 85% of their relationships with enterprise without interacting with a human, indicating decision makers will count on instant content and facts more than ever”
Giving the Customers full control of the sales and engagement process is a small revolution and will undoubtedly give a few marketeers and pre-sales teams hiccups as they will loose control of some of their domain and have to adjust to new metrics that predict the probability of turning a lead to a prospect and finally to a sale. It will therefore be one of the biggest challenges for the Information Marketplace to create trust in the concept by providing the outsourcing Vendors reliable statistics, knowledge about the customer preferences, guidance to make use of the service and last but not least – “Prospects on a silver plate”.
The good part is that any Vendor, small as medium sized, onshore/nearshore/offshore will be able to be at the right place, at the right time with the right service offering – with other words: Global market penetration capability. This has until now only been possible for the “big 5” with unlimited budgets to catch the clients with marketing, pre-sales and national/regional customer-facing sales offices.
The Vendors will furthermore be able to transform the 99,9% waste of low-level marketing to focused value adding marketing initiatives.
Rethink the marketing strategy
“One can only fill a glass with water until the top is reached, and the top is reached long time ago”
The number of cheap marketing solutions have exploded in the resent years and attracted numerous marketeers that disregard even the lowest level of ‘code of conduct’. The customers receive so many cold calls and spam e-mails that they are fed-up, and for good reasons. Unfortunately this has resulted in a closed marketing channels. Spam filters are getting better and better and as no decision maker have time to sort the good from the bad marketing mails that after all end in the inbox – all of them end in the garbage bin. Secretary’s and phone exchanges have also become remarkably good at rejecting cold calls. It is upon time to rethink the marketing strategy.
“Content marketing means creating and sharing valuable free content to attract and convert prospects into customers, and customers into repeat buyers. The type of content you share is closely related to what you sell; in other words, you’re educating people so that they know, like, and trust you enough to do business with you”
In a low frequency but high value market nothing but high quality marketing is needed. With thousands of Vendor homepages and multi-channel company pages on a diversity of social networks that all look alike the potential clients needs on demand Value and behind the scene transparency. Forget all about “sign-up and we will give you access to our whitepaper”. The future is valuable takeaways and a renaissance to the blogs that can give the reader real life examples of expertise.
Make the experience great
If the Providers embrace the Customers with a great experience in their marketing they will revert as Prospects all by themselves.
Opensource software could be a threat to the outsourcing industry, but it wont be. Even the biggest multinationals have open-sourced key components in their code base – simply because it is not their core business to make software but to generate services. The same reasoning will apply to the Outsourcing Providers. Even though it has been tempting over the years to implement everything from scratch, the winners of the game will be the Providers and Vendors that can guide the Customers through the opensource landscape and make them save money
Those Providers that can back their Clients efforts in the direction of DevOps setups will be the winner of the game. For years one of the biggest challenges Clients have had to deal with when outsourcing was Specifications and Test. The last decade agile development methods have empowered the Clients and brought the business much closer to the development process reducing the needs of waterfall approaches to deliver upfront specifications. Automation of tests is the next step to take off the Clients burden of ensuring that WYSIWYG. Providers that work across their portfolio of Clients and offer best practices and platforms to enable less experienced Clients a quick entry to automatic testing will without no doubt be able to offer ROI to their Clients of same magnitude as normally seen by ordinary Nearshore and Offshore Outsourcing.
Happy New Year
With these predictions for the very near future the Resiport team wish all present and future users of the Resiport IT Information Outsourcing marketplace all the best of luck and a successful year ahead.