BankerVision

The proof of value

I was with a vendor the other day that said he needed a “demonstration of intent” to take to his management before he was able to engage with us.

The “demonstration of intent” is that in-advance commitment vendors like to have before they commit resources to any prospective project at a customer. It comprises, usually, a small amount of money up front (“to meet costs”), or a letter that indicates that upon successful conclusion of what-ever-it-is, there will be a deal on the table.

The thing about such requests is that they often come in advance of any proof of tangible value. A presentation or case study is not such a demonstration.

My answer to these requests, usually, is “we don't pay for pre-sales”. And why should we? The burden for demonstrating value – in our specific context – must necessarily be elsewhere. We don't have the bandwidth, anyway, for speculative investigations of things that might be useful.

I think it important, at this point, to characterise a definition of pre-sales. It's any situation in which the primary objective is to demonstrate to us there is value that ought be pursued. When someone proposes, for example, a new way of using data that will enhance revenue or cut costs, proving those claims is just a cost of doing business. Of course, any kind of proof that relates specifically to us is going to cost money. It'll cost us too: we have to invest time and other resources to help.

So don't be asking for money to “meet costs”, because it is likely that we'll ask for money to meet ours.

Some people, of course, will argue that this kind of thinking means that smaller companies (who simply don't have the money to invest without commitment) are locked out of deals with a larger organisation. That probably true, and its too bad. Its why smaller organisations tend to have smaller clients to start with: the costs of getting in the door rapidly accelerate the bigger the potential customer.

By the way, I also raise an eyebrow when the term “proof of concept” comes up, which is another way of saying pre-sales.

A pilot, on the other hand, is something quite different. The purpose of a pilot is to let us see how a particular new thing will work in our specific context. It teaches us the lessons we need to operate it successfully if it goes ahead. And it lets us uncover any technical or procedural bugs we'd need to address during a ramp-up.

A pilot is not about proving value. It is about demonstrating that operationally we can do whatever-it-is.

Functionally speaking, a pilot is pretty much a full implementation of the new thing. We like to make sure that our partners (which is what a vendor would be, if we are actually going to do a pilot) are in a situation where they, too, are getting something from the arrangement at this point. Though it might not always be money.

I have one further point to make on this subject. And that's about the amount of investment vendors have to stump up to introduce us to something new.

We, like every other business, have budgets we must adhere to. Most of the time, they are decided far in advance. And usually, there is no fat in them at all. We are asked, year on year to find cost savings, in fact. We make our investment decision based on the value and capabilities we have now, or know about about at budget time.

So when someone shows up with something unique, there is often a scramble to make anything happen. Sometimes we actually can't make anything happen. I often wonder, when I sit across the table from a potential partner whether they realise this, or think we're playing a negotiation game.

I can assure you we're not.

Its necessary to be candid about these things. And for vendors to recognise that the price of getting something into a large customer is directly proportional to how quickly they want it to happen. A sales cycle of a year or more (which fits in nicely with our budgetary cycle) can be circumvented, but only where practically everything gets paid for up front.

Here is the key thing from our point of view: if we try to slot something into a programme out-of-cycle, it means we'll have to cut something else. Presumably, since it got into the budget in the first place, it was quite important.

It is a brave person that deprioritises something everyone has agreed is essential in favour of something that practically no-one knows about, or is new or especially novel.

Here is another term I sometimes hear from vendors: “we will do something but you need to have skin in the game”. Since when did investing our time and resources in working with you not become skin the game? We have skin in the game from the first meeting.

So let me close with a summary that might be helpful. We'll talk to anyone that can help us build our business. But be ready to prove you can do so. And recognise that any new thing we do will likely require us to negotiate a compromise somewhere else.

The new picture

Yesterday, I went into the office, and was asked by some people in my team whether my new picture on this blog had been "touched up in PhotoShop".

I was mortally wounded.

Then they wanted to know how "old" the photo was. It was, in case you are wondering, taken just a few weeks ago when I needed a new picture for my British Drivers Licence.

Although, I will admit, the magic passport camera in the chemist just outside Wimbledon railway station in London does take 5 years off.

Email bankrupt

I was speaking with a corporate someone yesterday who knows someone that's given up email entirely and insists that all internal communication happen on blogs and social networking sites. Not that this, by itself, is all that unusual. Gen-Yers have been ditching email for ages, apparently.

What is interesting in this case is the individual involved works for a large corporation. He's basically declared himself unavailable in the email environment, and hang the consequences.

There's no doubt that email is a noose around many people's necks. I have terrible trouble keeping up with mine myself. That's because I insist on reading every single email, even if I am on a CC line. I don't necessarily respond to every one of course, but looking at my email stats (from Xobni- a tool you must have), I do a response for about 60% of the mails I get.

Also according to Xobni (which has all my mail for the last 5 years), on average in July I get about 1600 new emails a month, from about 500 unique individuals.  So I'm writing about 960 emails to people in July. It works out to about 30 emails I have to write every day.

That's not so many compared to some people I know.

It is, however, a huge chunk of the day, since many need consideration and thought. You can't always flick-pass and file. And some of them trigger a pile of new emails before you can respond to the first one.

A cultural oddity of the bank is that we do back-to-back meetings, probably most days. So our email keeps piling up, and so many of us have resorted to fitting email processing into odd slots of the day.

I used to do mine on the Tube, attracting odd looks from everyone (I was the only one who ever opened a laptop on the tube!). But as I've just moved to Windsor (just outside London), I now do it on an air-conditioned over-ground train on the way to and from the office. I'm still getting odd looks, but at least it is more comfortable.

But back to the guy that's abandoned email altogether. I'm wondering how he is forcing all those other people to give up email to talk to him. Because I can tell you, I am so locked into my email tools and the systems I use, I simply would not move to blog commenting systems and social networks just to communicate with an individual when I can get to everyone else on email.

Forgive the hypocrisy from a blogger, but this is an individual that will simply be locked out of any decision process we undertake. Neither would he be invited to many meetings, which are also organised by email.

It is the corporate equivalent of going off to live in a cave and scratching in the ground for grubs.

No, any solution to the problem of email, must come from email itself, since so much of our corporate mechanic is now conducted in this medium. I use a few tools to help me: ClearContext is one, which knows how to score my inbox by importance (it deduces that from my use-behaviour) and helps with filing.

But when I look at my email, I notice only a small part of what arrives is actually communicating with people in an ad-hoc fashion, which is what email was designed for. The rest of it is doing business processes which have defaulted to the email platform because it easy and makes things look electronic.

It strikes me the answer to email overload is to find a way to elevate such emergent business process to actual business processes outside the email environment. Perhaps web forms with some basic workflow.

I am happy to use such tools to perform actionable activity. In fact, like most people, I prefer it. What I hate is having to do some manual process using email to put a veneer of electronic on it.

So it is convenient, isn't it, that the whole Gen-Y crowd who are dumping email are the same ones skilled in doing web pages and mashups. They can take all these things out of email - which they hate too - and make the work for the rest of us.

Update 1: Luis Saurez who is, in fact the person known by the corporate someone writes his comments here. Thanks for joining in Luis.

Update 2: Colin Henderson writes that to avoid meeting culture you should sack your assistant, and do everything yourself. I don't quite know if I will be getting rid of my assistant Lorraine, who regularly saves my life, but can understand his point of view.

An innovators forum

Recently, I received an email from Pol Navaro, who is Head of Innovation at Banco Sabadell in Spain. His thought was that it would be interesting to create a forum for innovators and new concept people from banks to get together to talk about the specifics of trying to drive innovation inside our organisations.

Now, I know we already have BarCampBank, supported by Frederic Baud, that does some of this. I hope to attend the Seattle BarCampBank later this year, schedule permitting.

Pol had the idea that we might create a complimentary forum, one that would enable those of us in banks to share our best practices and mistakes as we try to drive new concepts in our businesses. It would be different from BarCampBank in that the focus would be how to do innovation better, rather than the innovations themselves (let us not, however, at this early point limit any potential agenda too much).

I replied that I thought this an interesting idea, and offered to host a quarterly conference call for any banks interested. I know my counterparts in quite a few banks, so will contact them directly to gauge the level of interest in this idea. But those of you who are reading this blog, work in this area in a bank, and want to participate, please drop me an email at james.gardner@lloydstsb.co.uk.

I’ll follow up later on this blog with an update on how we’re going.

Attending European Banking Forum

It is 4AM. Not that I am such an early riser generally, but I have an early flight to catch to Prague, where I am attending the European Banking Forum. 

A big part of the event is one on one meetings that are scheduled - speed dating style - between parties at the conference, and I've been provided with a schedule of about 10 so far. There is a fairly substantial list of individuals from  banking in Europe who are supposed to be there. And, of course, there is a substantial list of vendors. There always seems to be at these things.

Not that I am complaining, of course, working for a vendor myself. Sometimes you can learn just as much from vendors at shows as you can from actual customers.

The other side of things is the actual event program itself, which largely consists of Tower Group analysts presenting their latest research. I am expecting an interesting few days - I'll be in Prague until Sunday.

North American Kick Off

Today, I am flying across the Atlantic (I'm normally based in London) to attend the Getronics 2006 Kick Off for North America. As you've probably gathered, I'm new to the company - I was previously at Microsoft Australia - so this will be an interesting experience to say the least. We are also in the first year that Getronics has had a formal global financial services vertical (of which I am a part), and I really can't wait to get the feedback from the North American folks on how this has been working for them. Ultimately, whilst we have global solutions in financial services (for example, Channel Renewal), you can only go so far without strong people who know the local specifics of the industry. So this week is doubly important for me: I'll be meeting all the key Financial Services leads for North America in the company.

Welcome and About

Welcome to BankerVision, a blog about the banking business, especially retail banking.

As you can read for yourself in the bio on this page, I’m Solutions Director for Retail Banking with Getronics – a large multinational company that does a lot of business with banks. Consequently, as part of my day to day work, I spend a lot of time talking to, reading about, and working with retail banks from around the world.

This provides some interesting insights that I hope to share here on this blog. I also plan to review the major events and trends that shape retail banking, and hope that you’ll find the material I post interesting enough that you’ll stop by this site often.

Naturally, the opinions posted here are mine alone, and do not necessarily reflect those of my employer. And I should also point out that my perceptions of things are naturally from the perspective of a vendor to the banking industry, rather than an independent observer. Nonetheless, I hope you find this collection of thoughts and observations useful each time you stop by.

So once again, welcome to the BankerVision blog. Your comments and suggestions are welcome: you can reach me by email at james.gardner@getronics.com