IMPACT

The six phases of the process are easy to remember as they will have an enormous IMPACT on your company’s performance:

Screen Shot 2015-04-02 at 16.54.16

Every purchase goes through all six phases, with or without the vendor (your) assistance. The reason that you probably don’t recognize this process is because the customer goes through the process on their own, and only invites you in at a certain point. But more of this later.

First, let’s understand the IMPACT process – from a buyer’s perspective. This is an employee in a major corporate, mired in politics, trying to make change happen. It may be formal – driven by the executive team – or more likely it is an employee who spots the opportunity and is the evangelist that initiates it.

Phase 1: Idea

The identification of ideas for changing or improving a business that are good enough to warrant investigation.

This is the ideas phase. This may be the executive team going on an offsite with strategic consultants to plan its future. They will be looking for ways to grow revenues, create competitive advantage, increase shareholder value, contain or reduce costs. It is ‘blue sky’ thinking to discover breakout ideas, rather than looking for solutions.

Alternatively, it is a vendor who has the idea and through their marketing (white papers, conference presentations, blogs) highlights the new idea and it is brought to the attention of the customer, either directly or via a consultant or analyst.

 Phase 2: Mentor

The mentor runs with the idea to validate it.

To move forward the idea will need a mentor. This is your Early Adopter, to the left of the chasm. An Early Majority buyer will not even consider the idea, as it is unproven and risky in their minds. A good mentor is someone with vision, passion and energy. Generally they are ambitious. The idea is not for public consumption and the mentor will work with their close team and trusted advisors to validate the thinking. The mentor will be scoping and testing the idea for feasibility, credibility, and political acceptability as much as they can without raising internal awareness. Mentors may start using the internet for research – analyst reports, blogs, articles, vendor white papers, free ebooks and references in social media posts. They may come back to the vendor who started it all. The mentor will start to plan how the idea can be delivered as an initiative, how it will be announced, what will be presented and to whom, and a route through the political maze.

If the idea does not fly then it will get buried – forever.

 Phase 3: Position

Enrolling a sponsor who can make resources and budget available to invest further.

The mentor will need to find a sponsor, because to move forward into the next phase will require resources (money, people, time) to run a pilot project to assess the value of the initiative. The sponsor will be the person with enough political muscle to get the resources. This may be under the corporate radar, as it will not be announced as a formal change initiative, with all the politics that this entails. The mentor will know that the initiative is moving out of the Position phase when an assessment team is assigned and money is being spent and a pilot project has been launched.

Phase 4: Assessment

Gathering data to assess the value of the idea.

The Assessment phase plays a very important part in the modern world. Today, with ever increasing levels of corporate governance, there are layers of compliance that ensures company officers are held accountable for their decisions. Particularly ones involving investment and strategic direction, which has made the Assessment phase a big hurdle. But the Assessment phase is not just about cost justification. It is an evaluation of everything, both quantitative and qualitative. This typically involves an assessment team or project team conducting a proof of concept or pilot project to generate the evidence and data. Hence, the need for a sponsor capable of funding the team. This is your paid pilot project. The pilot could be as much as $100k spent on product and professional services so don’t just focus on the enterprise deal or think that this is just the first phase of the enterprise deal.

Phase 5: Case

The creation of a quantified business case and assignment of resources/budget to it.

The mentor will use the output from the Assessment phase to build a business and investment Case. It is likely that this Case will then be pushed back and forth between the mentor and the sponsor until the sponsor is happy that the Case appears to support all the business and political goals. Then, the Case can have a budget assigned to it and is used to start the formal procurement process. At this point the project may no longer be in the hands of the mentor or sponsor. It may now be part of a formal procurement process driven by IT and procurement.

Phase 6: Transaction

The formal procurement.

This is where the customer will make their decision. In the perfect world you are single source at this point, having managed the mentor and sponsor through the first five phases. Procurement will raise a purchase order and negotiate contracts for the solution put forward in the Case. Depending on the solution, market and company approach, procurement may need to drive a formal procurement with competitive tendering, beauty parades, and all the fun and games that this entails.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s