qbs group - erp disruption qbshare 2016

Disruption & new business models:

Change or Disappear!

Guus Krabbenborg

Business training, Partner coaching & Inspiration

E gk@qbsgroup.com

M +31 622 496 073

About Guus Krabbenborg

• Over 25 years experience in business applications

• Co-founder in 1994 of DBS Business Solutions, an international Dynamics CRM partner with 120 employees

• In 1999 commercial director at Navision in The Netherlands

• Started TerDege in 2000, specialized in business training and coaching for Dynamics partners around the globe

• Since 2005 Guus runs workshops for prospect companies searching for new ERP and CRM solutions

• Today he is co-owner of both PMC and QBS Group

• Delivered R2R/CSS training to 150+ NAV/GP partners in 25+ countries

• Finally Guus writes blogs, delivers webinars and publishes books on business success with ERP and CRM solutions

Disruption impact

Disruption in airlines

Online & anonymous

Self educating, self serving

“All In” solution expectations (accelerated time to value)

Limited appetite for risk

Looking for “simple”

Buyer 2.0

Our average attention span

has dropped to 8 seconds,

one second less than a

goldfish.

86% skip TV ads

91% unsubscribefrom email

200Mon the

Do Not Call list

44% of direct mail is never opened

Today’s Prospect

Changing Buyer Behavior – HOW they buy

Current Marketing Void

Example of the Car Industry

In 2005 an average Opel customer visited the showroom 6,5 times

before buying a new car

Today this average is only 1,5!

So the buying process in almost completely done online!

Impact on the car industry:

• Dealers must shift from sales to service and maintenance

• Less expensive showrooms and less cars in the showrooms

• Ongoing investment in better websites

• Big investments in 3D projection of your new car (think model, color, etc.)

In 2014 in Europe 6.500 big car dealers closed their businesses (12%)

Is that a move from indirect to direct sales?!

The disrupter here is called ….

And the figures do talk…

So how good is your marketing today?

The new Buying behavior is causing ERP Disruption! – WHAT they buy

Important aspects of the ‘new buying behavior’

• Buyers are risk averse!

• Buyers prefer (micro-)vertical solutions

• Buyers look for complete solutions – not point solutions anymore

• IT has less influence on the decision-making process

• Subscription pricing becomes the standard

• Need for standardized solutions - customization is losing popularity

• Time-to-value becomes more important

• Simplicity is chosen over complexity

Traditional versus Modern offering

Traditional offering Modern offering

- High complexity - Less complex

- Customized solutions - Vertical OOTB solutions

- High risk for the buyer - Lower risk for the buyer

- Long lasting projects - Short Time to Market

- High costs based on CAPEX - OPEX based pricing

- Strong focus on function/feature - Focus on solving business pains

- ‘Stand-alone’ NAV - In O365, On Azure & With CRM

Customer benefits:

• First of all: much LOWER RISK!!

• (Much) faster delivery

• (Much) lower cost

• Benefit from helpdesk support

• Benefit from the MSFT innovation

• So (faster) delivery of upgrades!!

Microsoft Confidential – For Partner Use Only

• Traditional “services” business model under pressure

• IP becoming both a strategic differentiator and economic necessity

• Average deal size decreasing/subscription increasing

• Demand has shifted to favor vertically-specific solutions

• Prospects will find you before you find them: higher volume of lower value “leads”

• Meaningful content creation becoming increasingly critical

• Moving from tactical necessity to strategic growth engine

• Increasingly difficult to differentiate on product

• Selling cycles contracting

• Solution Selling no longer as effective

• CoS has to come down

Want to be in business tomorrow?

Expectations

RiskEngagement

Time and Budget

Flexibility

Consumption

Offerings Project outcome

Levels of complexity

Example Xero

Is this covered in your current offering?

Simple & Transparent

Replace sales conversation?

Compare solutions – do it yourself!

Faveo365 (DE)

Give power to your customers…

Dynamics365 (DE)

Dynamics365 (DE) - services

What is the strongest characteristic of NAV?

But the weakest characteristic of NAV is…

Less is more… no more complexity

Consult Design Implement Integrate Maintain Manage Adopt

Services

$

$

$

$

$

$

Consult Design Implement Integrate Maintain Manage Adopt

Services

$

$

$

$

$

$

Consult Design Implement Integrate Maintain Manage Adopt

Services

$

$

$

$

$

$

ONE-to-ONE ONE-to-MANY

The same old thinking……

So where are you?

• What is your culture of experiments and making mistakes?

• Trying something new?

• What is your Yes, but - grade’?

• Available budgets for innovation

• Who’s responsible for innovation?

• Allowing yourself to dream…..

• And how long will your best people wait for all this?

So how innovative are you?

• Recurring revenue is key in today’s M&A markets!

• There is a growing valuation gap between project businesses and

subscription businesses

• This difference in valuation can easily be a factor 4 to 6!

• Do you know the impact on the value of your own company?

Your company valuation

So it’s really time to change!!

Waiting for the magic moment….?

Don’t miss the boat! Expand your market!

Microsoft Confidential 60

Threath Opportunity

How good are you in changing?

• Nice booklet called ‘Who moved my cheese?’

• It’s all about how people deal with changes

• So how do YOU deal with change?

• Are you waiting for your cheese to return?

• Or are you willing to go after the

new cheese?

• And what about the rest of

your company??

TIP: buy some books for your LT!

1) Learn to sell (more of) the Microsoft stack

2) Learn to master the new sales motion

• Lower your Customer acquisition cost

• Marketing does the “heavy lifting”

• New/other Sales methodology

• New/other sales profiles or sales people?

3) Learn to market and sell standard/standardized solutions

Top-3 transformation challenges

63

66

“Projects”

Time

Results

“Products”

“Start-up”

Funding

Employees

& Customers

M

a

r

k

e

t

i

n

g

How to start a product business?

• Customizations is an art ;-) Better without customizations

• Standard answer: Yes Able to say ‘No’ and reframe

• Traditional view “Born in the cloud”

• Yes, but…. Yes we can!

• Looking for complexity Just do it!

• Business based on 1:1 services Productized 1:many services

• “Find, Win and Forget” Continuous engagement

Project vs Product people

Two types of repeatability….

We all know repeatable software:

- add on’s or components on top of Dynamics NAV

- with a specific vertical or horizontal focus

- they help partners to move from 1-to-1 towards 1-to-many

But what about repeatable services?

Example 1:Many support

1:Many end-user training

Customer comfort…

Customers support each other

New Disruption tool: Dynamics 365

Dynamics365 impacts - some thoughts…

• The number of Dynamics competitors

• AppSource – the international dimension

• What is your differentiation?

• Selling over CSP – even more competitors…

• Offering ERP, but also CRM and Office

• Split in license and services revenue

• The future of the stand alone solutions?

• What if you jump in from the start?

• What if you wait? Or don’t jump in at all?

So you better meet the new customer requirements…

Much better partner websites!!

Business conversations with your sales

A more professional delivery process

Low(er) risk!!

Subscription pricing

Faster delivery (‘next-next-finish’)

Micro-verticalization

Looking for end-to-end solutions

Interested in buying Successful Projects!

Your possible next steps…

• Watch the 40 min QBS Talks recording - see slide 65

• Attend the QBS Talks edition of September 29th on ‘Sales competencies in a Cloud First world’

• Attend one of my sessions at DIRECTIONS EMEA

• Attend the 1-day Dynamics365 Business workshop for UK partners at TVP on Tuesday November 22nd, 2016

• Or …… just wait for the Magic moment?