Has a consulting company established a beachhead within your organisation? Does it seem the only way to win is to hire even more of their people and buy more of their solutions? How do you tell if you are being up-sold or if their strategies are actually the right ones to win the war?
As a sales strategy, land and expand starts with “getting your foot in the door” and builds from there with a clear agenda. When applied to IT projects it works like this: a big IT firm starts with a small quote and it looks like you are getting some high-level managers and engineers at great value. The initial sale (“land”) is all about the fantastic customer experience. Once in the door, the focus shifts once again to sales (“expand”) rather than service. The idea is that it’s often easier to sell to existing customers, so when a new problem is identified and a new solution is presented the IT firm is usually presenting its own people or product as the solution. Suddenly, you are partnered with a big company, using their software, paying maintenance bills and have embarked on a multi-year transformation project that includes implementing their solutions.
The Problem with Land and Expand
The land and expand approach causes three main problems:
1. It’s not agile – it’s the opposite in fact. The sales goal is to increase the amount of work and the complexity of the project.
2. It’s expensive – spotty project management, rising costs, blown out timelines. Often you are left with an enhanced or very customised product that only the vendor can service.
3. It leads to vertical penetration. You start with a project manager and gifted engineer from a firm to help with your legacy software and before you know it, the firm has consultants in your finance department because “we do that too”.
The big firm that you have hired quickly loses its objectivity. They do not offer strategic advice without putting their proprietary or partners’ products and people forward. This sort of manoeuvring could replace your legacy software with a proprietary solution that may not fulfil your original business objective. Instead of enjoying cost savings, you are now part of a big firm’s recurring revenue stream.
Sometimes Project Growth is Real, Organic and Necessary
Not everybody is trying to up-sell you. And the economies of scale, range of experience and market power a big company offers can be beneficial in the right circumstances.
Let’s say that you have started attacking your transformation challenges and it has become evident that the battlefront is much larger than initially thought. Maybe the only way forward includes more boots on the ground or more technology purchases. How can you be sure that the advice you are being given is objective and best-in-class? How do you pick a land and expand scenario?
Ask yourself one simple question: who will have control of the solution? If the answer is you, then you are getting sound advice. Please proceed. If someone else is taking control over the solution, you may be getting up-sold.
As a consulting program director on many assignments within large organisations, I have been in a position where I have needed to increase the expertise on a project or recommend a different solution to better meet the client’s requirements. However, at the end of the project, my team moves on, we do not command control over the solution.
I’ve seen large companies take over and work hard to command control of the problem, to the point they will modify the client’s requirements to match the capability of their software and, in-turn, own the solution and its ongoing management requirements (and billings).
What you need to look for, and demand from your consultants, is transparency. This is your best defence against land and expand versus true project growth.
In keeping with our mantra of independence we approach project growth with that transparency. When we need to add people to a team to get the job done, we don’t just parachute them in. We work with our client to find the best in the market – and in certain circumstances that may not be one of our consultants. We always aim to ensure that we offer our finest, but we respect the client’s right to seek alternatives from outside our company.
We may recommend, implement and even on-sell solutions but we do not have exclusive partnerships and are independent consultants first, resellers second. Sometimes we opt not to make the actual sale, passing the sale onto the vendor directly and thus losing out on any related commission, so that we can maintain that independence in our clients’ eyes and on their behalf.
So that’s how you tell you have the right battalion. They put your interests first.
Ian Pearce is the Chief Operating Officer at Envisian