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Case Study:  IBM Tivoli Software

Related Tivoli Links: Tivoli White Paper

Business challenge: Increasing the Hit Rate

With ROI justification a selling requirement for most of their corporate deals, IBM’s sales force and business consultants for its Tivoli software solutions needed a sales tool that could quickly create a personalized and credible cost-benefit business case analyses for more than 100 products and four solution sets, including performance and availability, configuration and operations, security and storage management. Adding to the pressure – Tivoli faces intensive competition from suite and point-solution vendors, creating a very real threat that price, rather than value, would become customers’ key driver.

Tivoli products deliver value by increasing IT management and support productivity and scalability, helping to reduce IT outsourcing and purchasing requirements to meet growing demand, and addressing key business system risks, such as availability, security and data resilience. Tivoli needed a sales tool that would quickly analyze these solutions’ total cost of ownership (TCO), scalability and risk mitigation opportunities, and communicate how their solutions would help organizations reduce costs, do more with less, and eliminate risk.

The goal: Cut the sales cycle time, and increase the win-rate. Building credibility with the prospect from the outset – with a clear connection to how the solution drives bottom-line impact – would be key.

“Alinean’s tool helped us close several key strategic and competitive wins almost immediately. The tool enables us to reduce the sales cycle by 30 percent, and we achieved payback on our Alinean investment in under three months.”
- Ron Liles, IBM Tivoli

Urgent Need: Rapid Delivery and Integration With Value Selling Methodology

Tivoli needed the ROI selling solution within 12 weeks. From the outset, it needed to be flexible enough to sell the entire solution suite, but at the same time, be able to show the value of individual solutions from the 100+ product suite. The sales tool needed to be easy enough to use by sales professionals worldwide and deliver a common framework for additional use by business consultants, analyzing in more depth various value propositions and opportunities, and channel partners. Above all, the sales tool needed to be able to communicate the proposed solution value proposition to IT managers, CIOs and CFOs.

The Tivoli sales team needed to integrate this detailed, customized analysis with in its value-selling process. This meant providing credible financial benchmarks at key decision-making points – a careful calibration of emotion, relationship-building, and carefully selected data that would be meaningful, but not overwhelming.

The $6.1 Million Sale: Three Sets of ROI A major Internet retailer with several thousand servers was considering three vendors for a network management upgrade – and all three provided ROI analysis. One of the first applications of IBM’s customized Alinean ROI Analyst was to create a differentiated, customized, third-party credible business case for this customer, detailing current and proposed IT management practices and costs, scalability issues, service issues, availability risks, security risks, and storage management problems, modeling various solutions and scenarios. The resulting 60-page business case – which took less than an hour to produce – provided the decision-making team with the critical mix of technology options, credible analysis, and proven fiscal metrics. The key to the business case was that it enabled the buyers who had a personal and emotional connection to the solution to rationalize the decision to other peers and executives, winning quick approval. The other competitors also offered ROI analysis, but without the third-party metrics and validity (using home grown spreadsheet models), or using generic TCO tools (not offering customized analysis of the specific product impact and benefits). IBM won the sale – creating an immediate 10:1 return on its own investment in Alinean’s tool kit. Going Forward IBM’s Tivoli sales force rolled out Alinean’s tool kit in January 2003 to sales professionals and business consultants, and to channel partners in March 2003. The team uses Alinean’s ROI analysis tool kit worldwide with customized metrics for 12 selling regions. Each is configured to reflect local labor rates, price and the cost of capital. Future versions will be completely localized, including full language support. Initial feedback shows over 700 registered users. Of those trained on the tool,  61% have used it with a customer, 75% of these were very satisfied or satisfied with how effective it was in advancing the sales opportunity, and 90% would use it in another opportunity.		Ron Liles, who has used Alinean’s ROI Analyst to effect within several engagements, offers seven tips for using ROI analysis at key points to reduce the sales cycle and increase competitive effectiveness: 1. Ensure the credibility of the ROI methodology and third party research from the outset 2. Returns on investment need to be plausible – not perfect 3. The results need to pass the “smell” test - returning financial metrics that fall within the company’s expectations (ask what these expectations are) 4. ROI enables the team to rationalize emotions with data that speaks to IT peers, the business units and executives 5. Speak to cost last, once the value is established 6.   Don’t do an ROI analysis too early in the sales process (before the basic value proposition has been established) or too late in the sales process (in response to a competitor’s ROI, or only to gain final approval from the CEO).