Pre-sales in Information Technology Industry

By Ramanooj Dasbasu

Pre-sales in IT Industry

The global IT market is bursting in its seams with organisations at all scales either computerising their operations or trying to stay ahead of its competitions by adopting the latest IT trends in the industry. This fact is what drives IT based organisations and service providers to extend better, faster, secured and more reliable products, offerings and services to the end consumers.

There is cut throat competition between IT organisations to have their products and services implemented and thereby gain market share the basic philosophy of marketing and doing business. In this life cycle of reaching out to end consumers, the phase of pre-sales plays a major role. Most IT organisations have dedicated teams and/or departments whose sole responsible is to create a ground work for the sales and marketing team for them to present to the end consumer solutions and services that the organisation can provide and start, enhance and maintain a relationship with them.

This paper examines the basic fundamentals of pre-sales in an IT organisation and along with it the processes and practices that enable pre-sales.

Page i

Pre-sales in IT Industry

EXECUTIVE SUMMARY WHAT IS PRE-SALES?

Introduction Components of Pre-sales Where does it fit?

1 1
1 1 3

WHY IS PRE-SALES IMPORTANT?

Core Benefits Organisations Expectations

5
5 6

PRE-SALES: A WORKING PRINCIPLE TOOLS: AN AID TO PRE-SALES CASE STUDY

6 8 8

Page ii

Pre-sales in IT Industry

Executive Summary
Prior to a formal proposal with a solution to a requirement is presented to the client, a vast amount of tasks and activities happen in the background that makes a base for the proposal to be created and presented. This set of activities and tasks are typically handled by the pre-sales team. The team would typically be driving the prospect from various aspects like gathering information about the prospect, responding to client queries and liaising with various entities within and outside the organisation in order to give an edge to the proposal. Having a dedicated pre-sales team is very beneficial for an organisation as is explained later in the paper. It leads to a significant amount of contribution towards the goals of the organisation and also for it to capture market share. The pre-sales team uses various tools for its purpose that may span a knowledge base and estimation approaches. All these collectively enable the process of pre-sales.

What is Pre-sales?
Introduction
By definition, pre-sales is an exercise that enables an organisation to respond to a prospective customer where its requirements can be mapped to the products, offerings and/or services extended by the organisation. In a nut-shell, pre-sales creates the ground work and extend support to the sales and marketing team of the organisation in responding to a prospective customers requirement mostly through a formal proposal. In effect, an organisations pre-sales team plays the role of eyes and ears in terms of acquiring business and new engagements. The pre-sales team may get a lead from various sources request for proposal (RFP) floated by the customer, information received by the delivery team currently engaged in another project for the client, or cold calling just to name a few.

Components of Pre-sales
The pre-sales process includes a vast range of activities, all focused in preparations towards establishing a suitable engagement with the prospective client and responding to any information requests that the client may generate. These activities include but are not limited to: Responding to a clients requirement This component involves the pre-sales team to respond to a clients requirement. The response may be specific as in a proposal submitted against a RFP floated by the client, details provided against a RFI or a Statement of Work (SoW). Responses can also be informal such as via email, directing the client towards certain web sites or provisioning of brochures.
Page 1

Pre-sales in IT Industry

Visit to client sites

It is seen that many organisations make it mandatory for vendors responding to a RFP to have a visit to the client site. This approach is very helpful for the vendors to have a better understanding of the context of the requirements. Large and complex prospects often requires representatives of the pre-sales team to visit the client site and give presentations, conduct meetings and workshops before they can provide recommendations in the proposal. This exercise also becomes critical from the perspective of making a demonstration of a product or conduct a proof of concept (POC).

Support for client visits at vendor locations

In many instances, a prospective client might make a visit to the vendors work location(s) prior to awarding the contract. The primary idea behind this is for the client to ascertain facts provided by the vendor and also to have an understanding of how the project will be executed. Such client visits are very crucial for the organisation from the standpoint of gaining the contract and its pre-sales team plays a very important role in this. From preparing necessary presentations to be given to the client during their visit to arranging floor walks, the pre-sales team stay very much involved in the whole process.

Market analysis

Typically, when a client requires services, multiple vendors respond to the requirement. Thus, for an organisation to stay ahead of its competition, it is imperative for it to have significant amount of market intelligence in terms of similar services and/or products that are available elsewhere, costing information and general market trend. The pre-sales team is responsible for this and it helps them in preparing a proposal for the client that will provide financial and technical benefits to both the client and the vendor. It is a fact that the pre-sales team may not have all the information required in order to effectively pursue a prospect. Furthermore, there may be situations where the pre-sales team may require specific or highly customized information to be provided to the client. In other cases, technical know-how may be required to respond to the client and the pre-sales team may not have the necessary expertise. In these scenarios, it becomes very critical for the presales team to connect with other groups and centre of excellences and gather the necessary information.

Connecting with other groups and centre of excellences (COEs) within the organisation

Supporting sales and marketing teams

Typically, a large organisation would have partnership agreements or alliances with other organisations so as to collectively offer an end-to-end solution to the client. For instance, a software development firm may partner with a hardware manufacturer to provide a complete system
Page 2

Pre-sales in IT Industry

integration solution to a client. The pre-sales team utilizes these alliances and partnerships to portray extended capabilities to the client.

Where does it fit?

To understand where pre-sales comes into the picture, an understanding of the endto-end life cycle of a prospect materializing into customer is required. Refer Figure 1 below. Figure 1: Sales Life Cycle

RFP

Internal Lead

Cold Calling Pre-sales team identifies and pursues a prospective lead

Identify Prospect Pre-sales The team gathers information/details about the prospect and does the ground work inclusive of site visits, client visits, responding to any query by the client, interfacing with other groups and COEs and market research

Gather Requirements/ Understand Prospect

Create Artefacts

Handover to Sales and Marketing Team

Engage with the client for the prospect

Provide support to the sales and marketing teams in terms of providing all necessary information about the prospect

Sales process

End

Page 3

Pre-sales in IT Industry

In the life cycle of turning a prospect into a customer, the pre-sales phase is at the very beginning. Although, it will be incorrect to say that once pre-sales completes the process and hands over the prospect to sales and marketing team, its work is complete. Pre-sales continues to support the sales and marketing team through out the process till either the prospect converts to a customer or is awarded to another organisation. In large organisations, even after this and as a good practice, knowledge is gathered for the exercise in terms of best practices, lessons learnt and in case of an unsuccessful effort, a root cause of the failure. This is extremely crucial because this information will help the organisation in adopting the best and avoiding the contentious aspects in future similar exercise. Let us now examine the individual components of Figure 1 to have an insight of the various steps. Leads A lead can be defined as the information about a possible prospect for an organisation to extend its products, offerings and/or services to a client. The presales process starts with a lead. Three most common leads are mentioned in the figure above are elaborated below: RFP A request for proposal is perhaps the most definitive lead. If a client is floating a RFP, it means that they have already identified a requirement and have budgeted the same. In a way, the job of the pre-sales team becomes easier. It is expected that the client would have provided sufficient details of the requirement and its expectations in the RFP. The pre-sales team would therefore have specific information on how and what to respond to. However, in practice it is seen that there may exist gaps and it then becomes the responsibility of the pre-sales team to identify and close these gaps prior to responding to the RFP. An internal lead is typically when personnel (may or may not be a part of the pre-sales team) already associated with a client gets information about a prospect and informs the pre-sales team to pursue it further. In these scenarios, an organisation would try and action the prospect as quickly as possible in order to avoid the client having to raise a RFP thereby introducing competition. In few cases, and internal lead may be a result of value-adds or innovations proposed to the client. This aspect becomes a little difficult from pre-sales perspective as it would need the team to convince the client to undertake the proposed enhancement/ service and budget the same. Cold Calling Cold calling is typically when organisations approach prospective clients and extends its products, offerings and/or services. Most common cold calling approaches are unsolicited telephone calls and emails. Typically, the sales and marketing team members would be involved in cold calling. Once the client agrees to have initial discussions, pre-sales people are informed and the process of information gathering and creation of necessary artefacts commences.
Page 4

Internal Lead

Pre-sales in IT Industry

Preparations (Gather Requirements and Create Artefacts) This is the most critical phase in the pre-sales process. During this phase, the presales team takes necessary steps to gather information about the prospect as much as possible and use the information to create artefacts such as proposals, presentations and so forth. There are various aspects to this phase, some of which are listed in Components of Pre-sales section. As mentioned, these aspects form the core of this phase. For instance, visiting the client site and holding discussions and workshops for gathering details about the requirements is vital for identifying the gaps and proposing to the client an en-to-end solution covering all aspects of the requirement. Similarly, to build a strong case in the proposal, information might be required from other expert groups within the organisation in terms of detailing technical capabilities and prior experience in executing similar exercises. This kind of information generates a certain comfort level in the client. Support to Sales and Marketing Team Time to time, the sales and marketing team would require assistance or information in relation to a proposal that is to be provided to a client or a product that is to be marketed. The pre-sales team provides the necessary support and furnish all the details to the sales team as necessary. For instance, post submission of a proposal to a client, they may come back with a specific set of questions regarding the proposal. Or as a part of evaluating the proposal the client may wish to make a site visit to the vendors locations. They would typically approach the team member of the sales and marketing team with whom they were in contact with in relation to the proposal. The sales team would in turn reach out to the pre-sales team to gather all the necessary details or arrange for the visit.

Why is Pre-sales Important?

Core Benefits
There are definitive benefits that are derived from pre-sales. Some core benefits are elaborated below. Large organisations having dedicated pre-sales team for various verticals tend to have a large knowledge base that is built over time whilst working on various prospects. This knowledge base becomes useful in future prospects and those in turn contribute to the base. As can be imagined, it is a cyclic process. Organisations with this capability have a far better chance in materializing a prospect into a customer than those who dont. Background support to sales and marketing teams. As mentioned earlier in the paper, the pre-sales team provide support to the sales and marketing team in furnishing them with all the necessary information and artefacts, which forms the basis of the sales and marketing team to approach the customer with a proposal or market a product. This renders the sales team to be not involved in-depth with a prospects or have exhaustive knowledge about the intricate details of the same.

Page 5

Pre-sales in IT Industry

Pre-sales activities convert to better resource utilization. Large organisations would typically ask its relevant benched resources, who are generally from a technical background, to assist in pre-sales activities. This is a win-win situation for all stakeholders in terms of the fact that the organisation gains from the technical knowledge that the resources possess and to the resources in terms of contributing towards the cause or goals of the organisation. Networking. Pre-sales team members often reach out to various groups and departments within the organisation as well as to clients and other organisations. This creates a network of people, which does contribute a certain extent when the pre-sales team is working on a prospect. The stronger the network is, the better is the possibility to create a strong case for a prospective client.

Organisations Expectations
It is worthwhile to note here that depending on the scale and size of an organisation, it may or may not have a dedicated pre-sales team. However, it does not limit smaller organisations to undertake pre-sales activities. Usually, in such organisations, technical resources take up pre-sales activities in addition to their consultation or service delivery roles. The expectations of organisations from pre-sales perspective more-or-less remains the same irrespective of its size or human resources. It expects its pre-sales teams to have their eyes and ears open for any possible prospect that might result in a source of revenue for the organisation or gain market share. The organisation in turn invests in the area and may provide performance based initiatives for responsible personnel.

Pre-sales: A Working Principle

How does pre-sales work? To understand the working principle of pre-sales, it is imperative to know the components and fitment of pre-sales in the complete life cycle of converting a prospect into a customer. These aspects are elaborated in earlier sections. In a nut-shell, the end-product of pre-sales activities is a proposal for a client that details how an organisation will meet the clients requirements and along with it all supporting information such as prior experience of the organisation in the area, organisational capabilities and so forth. There are three main considerations whilst creating a proposal. Technical Solution A proposal by it nature will provide details of a proposed solution to a requirement for the client who raised the RFP. The details would contain technical aspects about the requirement. During the pre-sales phase, the technical solution may include a proof of concept, technical demonstration or a mock-up of the proposed architecture. For instance, consider a proposal to a client who would like to migrate its Visual Basic 6.0 based home-grown application to the .NET
Page 6

Pre-sales in IT Industry

platform. In the proposal, various approaches to undergo the conversion would be mentioned, which may be direct code conversion, code conversion with partial reengineering or total reengineering. The proposal will highlight the preferred approach and specify the advantages of using it over other approaches. Such details are highly technical and relevant information would mostly be available from the COE for application migration or subject matter experts (SMEs). Presales team members may or may not have in-depth expertise in the area. In such instances, the pre-sales team will liaise heavily with the COE and/or SME and provide relevant information in the proposal. Administrative Approach Once a solution is determined, the pre-sales team will be required to ascertain the factors that will enable the solution to be implemented. This aspect cover estimation of the effort required, staffing requirements from managers, analysts, consultants to developers, project execution window and infrastructure requirements. Most of this information will be available from past experience of handling similar prospects and the team can make an intelligent guesstimate of the figures. There are other industry standard approaches like function point analysis that can be utilized to have guidelines for estimating effort. It is worthy to note here that a single approach is never adopted for estimating effort. It is always a combination of two or more approaches. Most proposals will also add a certain percentage of the effort as a buffer to arrive at the total effort. This buffer is introduced to absorb unforeseen situations during the execution of the project. At times, a client may seek references and/or a testimonial from the organisations other clients who had undergone a similar exercise. Unless already available, the pre-sales team would reach out to the management representatives/ account owners of similar projects to obtain the same from the respective client. Financial Aspects One of the key components that clients focus on in a proposal is the costing details. Few aspects are: Total cost of the project Billing model time and material (T&M) or fixed price (FP) Invoicing mechanism Mode of payments

The first two are specific to the proposal while the last two are at organisational level. To arrive at these details, the pre-sales team would have to liaise with departments like accounts and legal.

Page 7

Pre-sales in IT Industry

Tools: An Aid to Pre-sales

A tool that can be used for a purpose always helps in executing a related task. Presales is no exception. Such teams use a variety of tools to aid in the pre-sales process. Knowledge Base Pre-sales team usually would build a knowledge base comprising of information ranging from FAQs to information that are required for all proposals. An example could be the executive summary. Referring to this knowledge base shortens the time required to complete the exercise as necessary information is mostly available at a single location. Templates and Frameworks A proposal is a structured document and tends to be similar in its organisation. Therefore, if there exist a template, the process of documenting the details becomes very simple and gets limited to simply plugging in the relevant information. Email Groups A COE or a set of SMEs may have a dedicated email group, which they would use as an interface mechanism for external resources to engage with them. Emails sent to these mailboxes would be taken up by one or more recipient and addressed. The process becomes transparent to the sender.

Case Study
XYZ CONSULTING firm has an existing production support engagement with a large financial institution based in the United Kingdom. The engagement started 3 years back and the project is executed from both onshore work locations of the client and offshore development centre (ODC) dedicated for the account. The firm has its resources deployed at both the locations. During the course of his regular work, one delivery team member of the firm at the client location learnt that the client is considering a centralized system that will act as a one source of truth and manage the operational data. As on today, every portfolio the client has maintains and uses this data in its own domain that has resulted in inconsistencies and financial losses. The team member is associated with one such portfolio and works with applications processing this set of data. From presales perspective, this is an example of a lead. The team member approached his supervisor with this information and they got in touch with representatives of the client who were associated with this prospect. Details of the prospect was obtained in terms of the software that the client intends to use, the budgeted cost, time frame for implementation, current state of the prospect and so forth. It was found that the software that the client intended to use was developed and marketed by another firm with whom XYZ CONSULTING had an

Page 8

Pre-sales in IT Industry

alliance. The team then approached the firm through the channel and obtained information about the product and the value adds that the firm can propose to the client financial or otherwise if they award the contract to the firm. They also liaised with a relevant team (COE) within the organisation who had done consultancy and implementation of the same product for other customers. All the information was collated and an approach paper was created to be presented to the client. Alongside, the business development manager for the account was informed and he arranged for representatives from the COE to visit the client side and make a presentation to them. This set of activities can be thought of as preparations for the proposal.

Page 9