End-to-End Control

Quick Summary: Customers focus on how a new product can be integrated into their entire business.

Abstract:

There are very few products or services that can be purchased, implemented, and used on their own.  To the contrary, each is part of an overall end-to-end solution. The more control that one has over the total end-to-end solution, the more likely they can de-risk the sale and predict its timing more accurately.

Your new product is clearly the best thing since sliced bread, as the old story says.  You are confident that it is true because you have created a brand new, state of the art bread slicer!  It is smaller, stays sharper, is easier to clean, and far more reliable than anything else on the market and is protected by seven patents.  All of your demos have gone extremely well, and customers are amazed with its performance.  Unfortunately, sales are zero, and you cannot understand why your prospects are not literally waiting in line to buy it.  The variable width slices, even within one loaf, that can be changed within 2 seconds from one loaf to another is unmatched in the worldwide market.

There is only one problem that customers have to address to begin to reap the benefits of your new creation.  All they have to do is make adjustments to their process to accommodate the new machine.  With its smaller size, the continuous process conveyor belts need to be adjusted.  Also, the solid loaf feeding mechanism needs to be able to reorient the solid loaves before they enter your machine.  Similarly, the output feed that leads to the loaf wrapping system needs to be reconfigured.  Although compared to the superior end result of uniquely sliced bread, these changes are believed to be minor by the sales rep.  In fact, the prospect doesn’t even bring them up when the sales rep is reviewing the features and benefits of their machine over and over and over again. (What the sales rep doesn’t know is that while they are droning on, the prospect is thinking about all of those “minor” issues and wondering how they will be resolved, by whom, and when.)

Of course, the above story is fictitious.  However, I can provide a number of specific real-world examples of companies that had similar views and made similar assumptions.  All of them are out of business.  There are two related, fundamental issues that resulted in the failure of these companies and will equally doom the bread slicing company.

First, the seller’s advanced and unique capabilities of their products were assumed to be so overwhelmingly important to the customer that they felt the customer would do whatever it took to buy and implement them.  Only in very rare instances does this occur.  As an example, the availability of flat-screen televisions was seen as different enough to justify the early replacement of classic CRT televisions and the re-arrange of most room furniture to accommodate them.  Very few products fall into this category and, after a twenty year period, the transition is nearly complete.  In the case of our bread producer, the changes that they would need to make would impact a number of other products and systems in the bread line production which would curtail production for some time, require expenditures to make the necessary modifications, and changes in advertising and promotion.  All of these factors need to be considered in the overall end-to-end solution of the bread production business.

The loss of control of the overall end-to-end solution is the second fundamental issue that can easily lead to failure.  If a company does not provide or have a plan to help a customer implement the required end-to-end solution for their product or service, they cannot predict when a sale will occur or even if a sale will occur ever.  Although the above discussion used a hardware product as an example, the same issue, perhaps even more daunting, faces a service provider.  In most cases, a new service offering replaces something else.  It could be an out of date system or perhaps a totally manual system.  In any event, employees will have to be trained on the new system, a transition plan has to be developed to move from the old method to the new system,  related input and output processes, forms, procedures, and reports will require changes, and new or different support mechanisms will have to be put in place.

In either case, each internal or external owner of each element in the end-to-end solution will probably view their component as the most important one in the end to end chain.  It is highly unlikely they will prioritize your issues ahead of their own.  Even with highly motivated and skilled individuals, overall coordination is required to help ensure an end-to-end solution meets its goals.  A symphony orchestra compromised of highly talented and motivated musicians needs a conductor to help ensure all of the pieces and players come together at exactly the right time.  It is of little consequence if one master musician says, “I did my part, too bad others didn’t do theirs as well.”.

Forecasting a sale requires a thorough understanding of the entire end-to-end solution in which the forecasted product or service is only one element.  Anticipating delays and/or understanding the timing of the other solution elements needs to be a key component in forecasting.  The more control that you have over the end-to-end solution, the more accurate your forecasts will become.

 

Article Number : 5.010208   

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