Strong Capabilities alone will not win you IT services deals

The ultimate cheat sheet to sourcing success

Why are some tier one service providers with excellent service offerings and expertise losing valuable clients to other tier one or smaller service providers—in some cases halfway through contracts? What are clients’ minimum expectations of a service provider during an engagement? Why are clients often distraught? We know that service providers are already expending a lot of effort to deliver a seasoned and complete end-to-end service across different departments’ value chains, such as investing heavily in critical drivers like the cloud, AI, security services, resources, and processes. Will these factors alone help to win and retain clients? If not, what is the secret sauce? That is the million-dollar question! Let’s discuss the answer.

Critical factors that we often overlook during IT service engagements

While service providers have a of solutions and offerings, it is sometimes more complicated for enterprises to identify the right technology and tool for their requirements because most providers offer similar offerings. Often, the deal-breaker in closing an IT outsourcing contract is not the technology or capabilities. Our discussions with multiple enterprise stakeholders and key decision makers revealed five factors that make a huge difference in choosing a provider over others, and they are often neglected.

Clients consistently point out that a service-oriented approach, competitive pricing model, and continuous innovation are vital factors in provider selection. Even though every engagement is different, most clients noted these factors are more critical to closing a deal than technology partnership ecosystems, intellectual property, and accelerators.

Key factors definitely sets you apart in the game

Let’s take a closer look at each of the factors that providers must display to prospective clients:

• Service-oriented focus: Providers must understand a prospective client’s business challenges, identify the right solution and technologies, and deliver them for a better outcome. They must also align their services with the client’s vision and roadmap to support its requirements and needs. Going the extra mile to provide a customized approach is possible when a provider maintains a service-oriented mindset.
• Competitive pricing model: A competitive and innovative pricing model is an essential element to closing a deal—not only the service provider’s proposed solution and expertise. Most providers offer similar capabilities and solutions to address enterprise challenges; however, competitive pricing differentiates providers and allows clients to benefit in the long term.
• Continuous innovation mindset: Often, service providers do not maintain the level of innovation they display at the commencement of a project through to completion. Innovative efforts slowly fade away, and sometimes clients need to push for more. Service providers should demonstrate their efforts to innovate or improvise to achieve a client’s goal by constantly sharing ideas to improvise the process. It makes a massive difference in a long-term engagement.
• Highlight industry case studies: Providers should not be shy about showcasing their industry use cases; they will help clients gain confidence in providers’ abilities.
• Referrals: Word of mouth is more effective than any paid marketing. If a service provider delivers what they have promised or beyond, a satisfied client is much easier to upsell. The sales pitch to other potential clients becomes much easier because of the referral. Most importantly, -win situation for retaining the client, upselling, and making it easy to approach potential clients. It gives a brand a good reputation in the industry, which is critical. We often hear about scenarios in which a provider underperformed in an engagement and didn’t achieve the desired outcome—then lost the deal because of it.

These five factors, are real deal-breakers to an extent; you may have noticed some of the tier one players cracking deals not only because of their capabilities but because of the small factors that make a considerable difference. While boutique players have their limitations, they make a difference with smart account management and going the extra mile; they continue to retain accounts and upsell easily. Tier one providers must shed their traditional structural silos and standard delivery methods. Top providers need to show their flexibility and willingness to get a job done.

As we all know, client preferences keep changes, their demands, and the way we work. Investments are bound to yield benefits only with equal focus on the above factors. Providing a customized approach and displaying a willingness to serve a client by understanding its industry, challenges, and needs will help a provider thrive.

The Bottom Line: To keep the sales engine firing, service providers must equally focus on service orientation, innovative pricing models, and process innovation.

The industry is busy bolstering its service capabilities through acquisitions and realigning offerings. Undoubtedly capabilities is the core, without that we don’t get to stand in the ground to play. But winning and retaining deals need little extra like service-oriented approach, competitive and innovative pricing models, and continuous process innovation, along with the factors mentioned above, are some of the real deal-breakers when it comes to close a deal. These are some of the crucial reasons why some tier-one players can continuously crack huge deals in the industry. Addressing these factors provides a competitive edge.