Session 3 - Pain Chain Analysis

Microsoft Dynamics Partner Academy

How to Sell Microsoft Dynamics ERP. Pain Chain®


Trademark Notice

The following trademarks and service marks are owned by Sales Performance Holding Company (DBA: Solution Selling® Inc.) and licensed by Sales Performance International, LLC. Any questions concerning the use of these trademarks or whether a name that does not appear on this list is in fact a trademark of Solution Selling® Inc. should be referred to Sales Performance International, LLC in the United States at the following address: Sales Performance International, Inc. 4720 Piedmont Row Drive, Suite 400 Charlotte, North Carolina 28210 USA Phone: 704.277.6500 FAX 704.364.8114 [email protected] www.spisales.com

Solution Selling® and Situational Fluency Prompter®, Pain Sheets®, 9 Block Vision Processing Model® and Pain Chains® are registered trademarks and service marks of Solution Selling® Inc. All other referenced marks are those of their respective owners.

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1. Why growth is not linear


Pain Chain®

1. 2. 3. 4.

Main Pain Chains® for ERP Pain Chains® by Industry Knowledge Check Summary

2

Formula for a Successful Sale KEY FACTORS PAIN X POWER X VISION X VALUE X CONTROL

3

Basic Principle of Sales

NO PAIN NO CHANGE

4


Critical Business Issue: PAIN

ERODING: Profit, Market Share, Service, Quality, Growth

INCREASING: Costs, Competition, Errors, Return, Employee Turnover

COMPLIANCE: Government regulations, Industry standards

5


Basic Principle

PAIN FLOWS THROUGH AN ENTIRE ORGANIZATION

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1. Main Pain Chain® for ERP

The Pain Chain® Job Title: Pain: Reason A

CEO Earnings per share decreasing Eroding profits

Job Title: Pain: Reason A Reason B Reason C

VP Finance Eroding profits Missing new account revenue targets Increased operational costs Increasing credit write-offs

Job Title: Pain: Reason A Reason B Reason C Reason D

VP Sales Missing new account revenue targets Sellers spend too much time with existing customers Increased operational costs Increasing credit write-offs Not enough referral business

Job Title: Pain: Reason A Reason B Reason C

CIO Current system does not meet the needs of sales departments Legacy systems don´t allow for growth Disparate databases limit information flow Manual processes The New Solution Selling: The Revolutionary Sales Process That is Changing the Way People Sell by Keith M. Eades. McGraw-Hill © 2004

B

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Three levels of Buyer Needs

Vision of a Solution

Admitted Pain

Latent Pain

The New Solution Selling: The Revolutionary Sales Process That is Changing the Way People Sell by Keith M. Eades. McGraw-Hill © 2004

A

8


Three levels of Need: Definition

9


Meet the Pain Chain®

Establish a Pain Chain®. "Pain" is the Solution Selling® (SS) term for things that are going awry. Sales are down - that's a pain. Expenses are up - ditto. SS is very specific about one thing: there is no technical pain. Your PDA cannot synchronize with your calendar tool - that's not a pain. That's a cause of pain, or maybe a symptom of pain. The pain in this case might be: “Your employees are missing too many meetings" or “You couldn't get the PDA synchronization feature into the last release."

A Pain Chain® is a set of pain descriptions, along with the reasons for them. In each case, a link in the chain has as one of its reasons a pain from a lower level. Thus, the VP of Software Development may have "We miss too many ship dates" as a pain entry, while the SQA director has "Our QA cycle is too long". The SQA pain is a contributor to the VP's pain.

The objective of the Pain Chain® is simple. To get commitment from the upper echelons of the organization. If the sales team can show a simple visual aid that ties the VP of Software Development down to the Integration Test manager, then the VP will be committed to helping the manager. This commitment means that there is an increased likelihood of the organization successfully implementing the solution that they buy. It's hard for a test manager to impose restrictions on a development lead, especially one who claims they’re running late.

A

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Pain Sheets®

The Pain Sheet®, or the Situational Fluency Prompter®, documents specific control questions for salespeople to use when diagnosing buyer pains and creating buying visions. You can find this document and more information in the following book. The New Solution Selling: The Revolutionary Sales Process That is Changing the Way People Sell by Keith M. Eades. McGraw-Hill © 2004.

A

11


Main Pain Chain® for ERP

A

Low Productivity of People and Processes

Unable to respond to changing business conditions

Difficulty in Managing Organizational Growth

Difficulty in Connecting Customers, Partners and Employees

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Low Productivity of People and Processes (I)

Main Reasons

CFO

CEO Pain: Low company productivity prevents taking advantage of growth potential

 Reason 1 : High costs of

operations  Reason 2: Can´t compete successfully  Reason 3: Technology is a cost center, not a productivity factor  Reason 4: Marketing is costly and not producing results  Reason 5:Unproductive business practices  Reason 6: Inefficient manufacturing processes

Pain: High cost of operations  Reason 1: Lack of real-time insight into key financial metrics

 Reason 2: Difficulty managing financial accountability and compliance.

 Reason 3: Expensive, ineffective business processes.

 Reason 4: Unfavorable margins

 Reason 5: Admin. staff need to create and maintain the books

VP Sales Pain: Can’t compete successfully  Reason 1: Lack of real-time insight into key sales metrics  Reason 2: Difficult for sales people to access customer information  Reason 3: Sales cycles too long  Reason 4: Inability to respond quickly to new customer needs

VP Marketing Pain: Marketing is costly but not producing results  Reason 1: Lack of realtime insight into key marketing metrics  Reason 2: Hard to measure performance of marketing campaigns  Reason 3: Difficult to identify opportunities and emerging needs

 Reason 5: High cost of operations is preventing effective price competition

 Reason 6: Overwhelming need for repeated data entry

A

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Low Productivity of People and Processes (II)

Main Reasons

CTO Pain: Technology is a cost center, not a productivity factor

Pain: Unproductive business practices

 Reason 1: Redundant data entry still necessary

 Reason 1: Duplication of

 Reason 2: No personalization features for users

 Reason 2: : Difficult to do business within the company efficiently

 Reason 3: No integration between business management system and other applications

 Reason 3: Service delivery not responsive enough to customers

 Reason 4: IT burdened with inefficient tasks, such as producing simple reports

A

VP Operations

efforts and data entry

 Reason 4: Employee frustration with company’s inability to change course  Reason 5: Lack of automation and efficiency tools

VP Manufacturing Pain: Inefficient manufacturing processes  Reason 1: Supply chain management not flexible to accommodate growth and increased demand  Reason 2: Difficult and costly to make changes to BOMs and customer orders  Reason 3: Business technology not supporting efficiencies

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Low Productivity of People and Processes (III)

Capabilities of Microsoft Dynamics ERP Role Tailored User Experience

Integration Between Finance, SCM and CRM

Alerts

Analysis Tools

A

15


Unable to Respond to Changing Business Conditions (I)

Main Reasons

CEO Pain: Company not an industry or market leader  Reason 1 : Sales lag behind competitors,(with Marketing not filling the sales pipeline)  Reason 2: Technology not helping gain on competitors  Reason 3: Not financially performing any better than the competition  Reason 4: Difficulty in maintaining productive customer and partner relationships  Reason 5: Manufacturing unable to adjust to changing business conditions

A

CFO

VP Sales

Pain: Not financially performing any better than the competition

Pain: Sales lag behind competitors

 Reason 1: Not enough sales at reasonable cost and margin

 Reason 1: Ineffective

 Reason 2: High cost of acquiring customers

 Reason 2: Poor understanding of business trends

 Reason 3: Business and manufacturing processes not economical  Reason 4: Not all management decisions financially sound  Reason 5: Competitors successfully diminishing revenue stream

marketing support

 Reason 3: Difficult for sales staff to access customer and transaction information  Reason 4: Remote sales offices not tied into business processes  Reason 5: No self-service capabilities for customers

VP Marketing Pain: Not filling sales pipeline successfully  Reason 1: Difficulties in assessing opportunities and planning activities  Reason 2: Unable to respond early to new market trends  Reason 3: Brand presence and equity not strong enough  Reason 4: Partner marketing not efficient  Reason 5: Company lacks clear direction

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Unable to Respond to Changing Business Conditions (II)

Main Reasons

CTO Pain: Technology not helping gain on competitors

VP Manufacturing

Pain: Difficulty maintaining productive customer and partner relationships

Pain: Manufacturing unable to adjust to changing business conditions

 Reason 1: Business data too hard to get to and work with

 Reason 1: Service delivery

 Reason 2: No easy way to share information with partners, customers, and vendors

 Reason 2: Poor customer communications

 Reason 3: No system-wide updates when inventory, shipping, and order data changes  Reason 4: Business management system too difficult to use  Reason 5: IT too absorbed with support and maintenance

A

VP Operations

not responsive enough

 Reason 3: Not open for business at all times  Reason 4: Partners having difficulty doing business with the company

 Reason 5: Unable to support customers in foreign languages

 Reason 1: No understanding of changing customer needs  Reason 2: Too difficult to plan supply and demand  Reason 3: Manufacturing processes inefficient and expensive  Reason 4: Lack of automation  Reason 5: Hard to adjust changing workloads

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Unable to Respond to Changing Business Conditions (III)

Capabilities of Microsoft Dynamics ERP Order Processing and Fulfillment

Exception and Changes

Graphical Production Schedule

Multi-language, Multi-currency, Multi-location Data Analysis and Reporting A

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Role Play: Case 1

• Create groups of 3 people: customer, salesperson, and observer. • Take a couple of minutes to prepare. • Practice, remember this is not an acting test. • Be realistic, not too nice, not too hard. • Ask if the person wants to receive feedback. Giving feedback • Ask the person how he thought he did. • Start with what went well. • Describe the behavior. • Be honest and balanced. • Check that the other person understands your feedback.

A

Receiving feedback • Don’t be defensive…..reflect & look for themes. • Accept this as a legitimate view of the person offering it. • Be open to doing something different, ask for suggestions.

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1. Why growth is not linear


Pain Chain®

1. 2. 3. 4.

Main Pain Chains® for ERP Pain Chains® by Industries Knowledge Check Summary

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2. Pain Chain® by industries

Introduction

• During the sales cycle, you need to know a priori the specific pains of the sector or industry of the company in order to be able to define and establish the Pain Chains® and identify which capacities of Microsoft Dynamics you need to show them.

• Knowing these critical business issues by industry shows sales excellence and leadership and it is key to achieving success. • Specific information for the ERP key industries (Manufacturing, Distribution, Professional Services, and Specialty Retail) can be found on: https://mbs.microsoft.com/partnersource/marketing/campaigns/vertical/MSDindustryvert ical02.htm

A

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Chemicals Manufacturing

Industry Value Chain

Formulate

Sell

(Concept to Opportunity)

(Order to Cash)

Produce (Demand to Availability)

Service

Buy

C-Level

CEO, CFO, CIO, COO, CTO

VP Level

Finance, Operations, Manufacturing, Supply Chain, Engineering

Upper Management

GM, Plant, Materials, Quality, Compliance, Supply Chain, Engineering

SIC Coverage

2812-13, 2816, 2819, 2821-24, 2833-36, 2841-44, 2851, 2861, 2865, 2869, 2873-75, 2879, 2891-93, 2895, 2899

Gross Revenue per Annum

$50M-$2B USD

Number of Users

50-2000

(Consumption to Replenishment)

(Produce to Pay)

Manage

Staff

(Manage the Business)

(Manage Human Capital)

Stratascope Inc.

A

Customers

Suppliers/Contractors

Prospects

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Key Pain

Chemicals Manufacturing Operating Costs Out of Control

Varying Product Quality, Traceability

A

Poor On-Time Delivery and Throughput

Failure to Meet Compliance Standards

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Capabilities of Microsoft Dynamics ERP

Industry-specific Features

Profound Experience in Process Manufacturing

Flexibility in the Implementation

A

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Industrial Equipment Manufacturing

Industrial Equipment Manufacturing Value Chain

Design

Sell


(Order to Cash)


C-Level


VP Level


Upper Management

Plant Manager, Materials Manager, Engineering Manager, Supply Chain Manager

SIC Coverage

3433, 3511, 3519, 3523-24, 3531-37, 3541, 3542, 3544, 3545, 3547, 3549, 3552-56, 3559, 3561, 3563-69, 3581-82, 3585-86, 3589, 3593-94, 3596, 3599, 3699, 3743,3799


$50M-$2B USD

Number of Users

50-2000

Service

Buy


(Produce to Pay)

Manage

Staff



Stratascope Inc.

B

Customers


Prospects

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Key Pain

Industrial Equipment Manufacturing Meeting customer demand for products, pricing, and services

Improving cost management

Improving financial control

Enhancing operational efficiency Making data accessible/visible

B

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Meet Demanding Customer Needs

Improve Operational Efficiency

Improve Financial Control

Reduce Costs

Provide Access to Centralized, Current Data

B

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Automotive Supplier Manufacturing


Design

Sell

(Innovation Management)

(Order to Cash)

Customers


Prospects (Automotive Suppliers)


C-Level


VP Level


Upper Management

Plant, Materials, Engineering, Supply Chain

SIC Coverage

3465, 3519, 3592, 3647, 3694, 37xx


$50M-$2B USD

Number of Users

50-2000

Service

Buy


(Produce to Pay)

Manage

Staff



Stratascope Inc.

B

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Key Pain

Automotive Supplier Manufacturing Improving Operational Control

B

Managing a Complex Supply Chain

Improving Customer Service

Leaner Manufacturing

Increasing Time-to-market Demands

Production of Unauthorized Parts

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Industry-specific KPIs

Build Connections to Suppliers and Vendors

B

Lean Manufacturing Capabilities

Develop Profitable Customer Relationships

30


Professional Services


Develop

Sell

(Relationship Management)

(Account and Opportunity Management)

Customers


Prospects (most Professional Services organization prospects are mid-size firms)

Deliver (Engagement Management)

Resource

Maintain

(Talent Management)

(Non-project Revenue)

Top Level Executive

CEO, Partner, Owner

Other Executive Level (Title may be Principal, VP, or C-level)

Operations, Global Services or Service Delivery, Sales or Market Development, Finance and Administration

Upper Management

Marketing, Information Technology, Human Resources, Training and Development, Customer Service

Manage (Manage the Business)

Stratascope Inc.

B

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Key Pain

Professional Services Managing and Reducing Costs Managing Dispersed or Virtual Engagement Teams Aligning Skills and People with Customer Engagement

B

Gaining Deep, Real-time Insight

Meeting Stringent Customer Reporting Needs

Ensuring Compliance

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Project Management

Financial Reporting

Financial Management

B

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Specialty Retail


Collaborate

Sell


(Order to Cash)

Plan (Demand to Availability)

C-Level


VP Level

Sales, Marketing, Merchandising, Operations, IT

Upper Management

GM, Operations, Sales, Marketing

SIC Coverage

5211, 5231, 5251, 5261, 5271, 5611, 5621, 5632, 5641, 5651, 5661, 5699, 5712-14, 5719, 5722, 5731-32, 5734, 5943-48, 5961-63, 5983-84, 5992-93, 5999, 7699


$50M-$2B USD

Number of Users

50-2000

Service

Buy


(Produce to Pay)

Manage

Staff



Stratascope Inc.

B

Customers


Prospects (Automotive Suppliers)

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Key Pain

Specialty Retail Merchandising Requirements

Competition from Other Types of Retail Stores

Outdated IT Resources

High Levels of Staff Turnover and Need to Minimize Staff Training

Increasingly Demanding Customers

B

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Delivering forecasts and purchase orders directly to the retailers’ supplier

Starting up new stores quickly, with fast implementations of POS

B

Connecting retailers’ demand requirements to manufacturing, wholesale, and distribution operations

Shortening re-order cycles by integrating replenishment requirements with suppliers’ systems

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Use of Sales Guides

• Read the hand out https://mbs.microsoft.com/downloads/partner/campaigns/Chemical_Manu/Chemicals Mfging_SalesGuide_partner.pdf

• Would you use these guides? • What makes this useful?

A

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4. Summary


Pain Chain®

1. 2. 3. 4.

Main Pain Chain® for ERP Pain Chain® by Industries Knowledge Check Summary

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3. Knowledge Check

Knowledge Check

Which of the following are PAINS for ERP?  Difficulties connecting customers, partners and employees.  In 2009, the company grew 5%.  Low productivity of people and processes.  Support 50% more employees without increasing servers.

B

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3. Knowledge Check

Knowledge Check - Answer

Which of the following are PAINS for ERP?  Difficulties connecting customers, partners and employees.  In 2009, the company grew 5%.  Low productivity of people and processes.  Support 50% more employees without increasing servers.

B

40

3. Knowledge Check

Knowledge Check

In a distribution company, which of the following could be a key pain?  Merchandising requirements.  Lack of visibility to control inventory and costs.  Competition from other types of retail stores.

 Chemical manufacturing industry-specific features.

B

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3. Knowledge Check


In a distribution company, which of the following could be a key pain?  Merchandising requirements.  Lack of visibility to control inventory and costs.  Competition from other types of retail stores.

 Chemical manufacturing industry-specific features.

B

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3. Knowledge Check

Knowledge Check

In a professional services company, which of the following could be a key pain?  Lack of aligning skills and people with customer engagement.  Starting up new stores quickly, with fast implementations of POS.

 Difficulty managing and reducing costs.  Delivering forecasts and purchase orders directly to the retailers’ supplier.

B

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3. Knowledge Check


In a professional services company, which of the following could be a key pain?  Lack of aligning skills and people with customer engagement.  Starting up new stores quickly, with fast implementations of POS.

 Difficulty managing and reducing costs.  Delivering forecasts and purchase orders directly to the retailers’ supplier.

B

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3. Knowledge Check

Group activity

The group should put themselves in the CEO’s shoes in the scenario described in each exercise. For each exercise, explain the reasons behind the problem for each department affected and how it would be resolved.

B

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3. Knowledge Check

Exercise 1

Group activity

Suppose you want to make your business grow but the implicated costs and complexity would make it practically impossible to access new markets and sources of income. Your company’s technology doesn’t follow the rhythm of your business plan and as a consequence you are faced with the problem of your business growing, with the potential risk of operating inefficiently, or maintaining your current level of activity and running the risk of loosing opportunities, or even an eventual decline in activity. Your wholesale customers and strategic partners would like to see you grow, for their own interests, but this doesn’t happen. You simply don’t know how to make your business grow.

How does this affect your business and you personally? How would you resolve this? B

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3. Knowledge Check

Exercise 2

Group activity

Suppose your customers and partners have difficulties in contacting your organization, although they are one of your wholesale suppliers or preferred commercial partners. You would like to give them more information and access to company activities, but it will be difficult to achieve this without putting the integrity of confidential company information at risk. As a consequence, business data is protected but also limited in terms of its business value as it is only available in a limited way. Customers don’t generate as much business as you would like and it is possible that partners will start to think about revaluating their business relationship with you. How does this affect your organization and you personally? How would you resolve this?

B

47

4. Summary


Pain Chain®

1. 2. 3. 4.

Main Pain Chain® for ERP Pain Chain® by industries Knowledge Check Summary

48

4. Summary

Summary

Pain Chain® 1 Pains

Main Capabilities of Microsoft Dynamics ERPs

A

3

2

Low Productivity People and Processes

Unable to respond to changing business conditions

4

Difficulty in Managing Organizational Growth

Difficulty in Connecting Customers, Partners and Employees

Role tailored user experience

Order processing and fulfillment

Scalability

Web portals

Alerts

Multi-language, Multi-currency, Multi-location

Flexibility to change

Web services

Integration between finance, SCM and CRM

Exception and changes

Cost-effective implementation

Intercompany functionality

Analysis tools

Data analysis and reporting

Technology roadmap

Drill-down capabilities

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4. Summary

Summary

Pain Chain® 1 Industry

Key Pain By Industry

A

Distribution

3

2 Industrial Equipment Manufacturing

4

5

Chemicals Manufacturing

Automotive Supplier Manufacturing

Professional Services

6 Specialty Retail

Difficulty gaining a clear picture of demand

Meeting customer demand for products, pricing, and services

Operating costs out of control

Increasing time-to-markets demands

Managing and reducing costs

Merchandising requirements

Lack of visibility to control inventory and costs

Enhancing operational efficiency

Poor on-time Delivery and Throughput

Managing a complex supply chain

Managing dispersed or virtual engagement teams

Competition from other types of retail stores

Improve execution with suppliers and customers

Improving cost management

Varying product, quality, traceability

Leaner manufacturing

Aligning skills and people with client engagement

Increasingly demanding customers

Upgrade growth with improved customer service

Improving financial control

Failure to meet compliance standards

Production of unauthorized parts

Gaining deep, real-time insight

High levels of staff turnover and need to minimize staff training

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4. Summary

Recap: Keys of ERP Pain Chain®

1. Several Pain Chains® could seriously impact the customer, such as: a.) Low productivity of people and processes. b.) Unable to respond to changing business conditions. c.) Difficulty in managing organizational growth. d.) Difficulty in connecting customers, partners and employees. 2. In addition, each customer is different depending on the industry it’s in. Their key pain are also different. 3. Microsoft can help customers realize the capabilities of their ERPs.


Review Learning Objectives

• Understand the main Pain Chains® when selling an ERP solution, the impact of each pain on decision-makers and the capabilities Microsoft Dynamics ERP solutions bring to customers. • Understand the main Pain Chains® (needs) for specific industries and how Microsoft Dynamics ERP solutions help address them.

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© 2009 Microsoft Corporation. All rights reserved. Microsoft, Windows, Windows Vista and other product names are or may be registered trademarks and/or trademarks in the U.S. and/or other countries. The information herein is for informational purposes only and represents the current view of Microsoft Corporation as of the date of this presentations. Because Microsoft must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information provided after the date of this presentation. MICROSOFT MAKES NO WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, AS TO THE INFORMATION IN THIS PRESENTATION.

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Session 3 - Pain Chain Analysis

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