Ray Collis

Sellers Beware: The Project Behind The Purchase

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Behind many big purchases is a project.  Indeed the purchase itself may be a project, with a set of steps, a project team, project milestones and so on.  Adopting the project perspective on the sale is important from the perspective of qualifying and closing the sale.

The purchase may be part of a bigger project.  It may be an IT project, a HR initiative, a marketing drive, a corporate strategy, or something else.  However, regardless of the nature of the project, it creates a new set of dependencies in respect of winning the sale.

Can you see the project behind the purchase decision

For the seller the success of the sale may depend not just on the quality of the sellers solution, but the success of the project that surrounds, or envelopes it.

Project Success = Sales Success

If the success of the sale depends on the success of a broader project, then a wide range of additional variables come into play – factors that are typically not considered by the salesperson.  At its simplest that might include:

- The skill and experience of the project manager
- The power of the sponsor
- The engagement of stakeholders

Looking at the purchase in the context of the broader project from which it stems is important if you are to avoid overlooking key dependencies, milestones and risks in respect of the sale.

The Project Dependent Sale

Most projects fail.  That is the attention grabbing headline that sums up research into hundreds of thousands of projects.

The Standish Group has been tracking project success in IT for more than a decade, their research shows that only 32% of projects succeed.  Here is what happens to the rest of the projects:

  • 24% fail – they were scrapped, or simply fizzle out
  • 44% were “challenged” – they ended up behind time, over budget, or failed to deliver as expected

For this reason the key success factors of the project can also become the risks around the purchase.  They could prevent the salesperson winning the sale.

Is the project behind the purchase of your solution progressing smoothly?

To understand the project-related risks that can hinder the sale lets look at what makes a successful project.

Project-related Key Success Factors

A project means that somebody within the organization has embarked on a programme of work to achieve a particular outcome.  The key ingredients of a successful project include:

-  A project manager - who is responsible for what does and does not get done

-  A sponsor – somebody in the organization who is driving the project

-  A project team, or working group – the people involved in its execution

-  A number of clients or stakeholders as well as possibly external actors (eg consultants, or suppliers)

-  A scope in terms of defining where the project begins and ends

- A number of activities, inputs and outputs (some of which may include purchases)

- A budget (both in terms of financial and other resources)

-  A plan, setting out what is to be done (it may or not be in a project planning tool, or use a particular methodology)

- A goal or outcome that defines the project’s success and against which progress can be tracked (these may be realistic or not)

- A timeline, including key milestones and dependencies

- A driver or an objective for example: – to meet a need – to solve a problem – realize a goal – implement a strategy – the importance of the projects derives from this source

- Some element of change is likely to be required

- Project related risks are likely to be considered

If the purchase decision depends on the project these factors are now risk-related variables (or conversely Key Success Factors)  in respect of the sale.

Why Projects Fail

The Standish research looks for answers in terms of why projects fail.  The result is a list of variables that the seller should look out for.

In particular the research suggests that 50% of success can be attributed to:

- Executive support (18%)

- User involvement (16%)

- The project manager’s experience (14%).

What does the level of executive sponsorship and user involvement tell you about the likelihood of success?

Other reasons why projects succeed (rather than fail) include:

- Clear Objectives 12%

- Minimized Scope 10%

- Firm Requirements 6%.

These findings are of little surprise to salespeople, who have long known that executive support for example is key to closing the sale.  However, how do these critical factors influence our forecast as to the likelihood and timing of a deal?

Do you rate an opportunity lower where the is poor executive support, or a weak project manager?

The Strategy Dependent Purchase

If your sale depends on the success of a project that is one thing.  If it also depends on a new strategy that is another.  Just as many projects fail, so too do many strategies.

Implementing a change of strategy compounds the risk of any project-related purchase.  Again it means that the success of the sale depends not just on the supplier being able to demonstrate the best  solution  or the best price – it also depends on the success of the project or strategy.  Those are variables that the seller must seek to influence.

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