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© 2024 N. Dean Meyer and Associates Inc.
Excerpt from www.NDMA.COM, © 2024 N. Dean Meyer and Associates Inc.

Book: How Organizations Should Work

Role Analysis: Business Relationship Managers

relationship managers are an essential element of a healthy IT function; but all too often, they fail to achieve their potential and create a new set of problems

by N. Dean Meyer

A CIO, Pete, was made painfully aware that clients were not satisfied with the way they were being treated. His career was on the ropes, with leaders of the major business units highly dissatisfied with him.

Book: How Organizations Should Work

A colleague suggested that, among other things, "relationship managers" might improve the situation. So Pete established the function and appointed Heather to lead it. Reporting to Heather, he assigned three business systems analysts -- young, high-potential people with excellent people skills.

Pete challenged Heather to be responsive to clients and improve IT's relationships and reputation. But as hard as Heather and her team tried, things didn't improve much because Heather was set up to fail.

What Went Wrong

Heather's group didn't completely fail. Some of her relationship managers worked their way into clients' confidences and helped facilitate better communications with the IT organization. But the function certainly didn't live up to expectations, and it generated its own stresses.

Many clients rejected their relationship managers when they learned that these well-meaning people weren't in a position to make any commitments on behalf of IT or to solve their technology problems. Clients found that after talking to their relationship managers, they inevitably were passed off to an applications development manager who had the resources to get things done.

Since relationship managers seemed to add little value, these clients resented having to pay for another layer of overhead. They felt the relationship managers should be redeployed back into the development group where they would do "real" work.

Meanwhile, the relationship managers were not well accepted by the rest of the IT organization, especially by applications developers.

The applications development function remained structured by client business unit. The managers of the development groups, each dedicated to a particular business unit, felt that they should be the primary point of contact, and resented the relationship managers for diminishing their client exposure, political visibility, and fun.

Worse, these overworked development groups felt it was absurd for relationship managers to drum up new business, however strategic it might be. They didn't have time to fulfill current commitments, much less respond to requests for proposals on new opportunities.

Of course, when developers failed to respond, the relationship managers lost even more credibility with clients.

To fill the gap, relationship managers began offering estimates of development projects, and even high-level designs (including suggesting vendor packages) Naturally, development staff resented their meddling in solutions design.

Over time, internal relations deteriorated. Under pressure from clients, relationship managers sometimes made promises which the rest of the IT staff couldn't fulfill. Then, when clients got upset, relationship managers appeared to side with clients and "do battle" with the development managers on their behalf. This engendered an openly adversarial relationship.

Seeing little value in the function and lots of problems, managers in the development group took every opportunity to undermine Heather. They excluded relationship managers from their strategy meetings, and even from meetings with clients. They didn't keep relationship managers informed, and took repeated shots at them in IT leadership meetings and in front of clients.

In exasperation, Heather was on the verge of resigning. But Pete beat her to it, so she waited to see if his successor would help her get relationship management moving in the right direction.

Let's try to help Heather with a clearer vision of what the relationship management function is supposed to be, and what she needs to do to make it work.

The Role of Relationship Managers

An internal service provider such as IT is a business within a business, there to deliver products and services to clients throughout the company. It has tough competition from decentralization and outsourcing. And despite monopolies in a few commodity areas (like phones and networking), it must earn "market share" by delivering great value and by developing great customer-focused relationships with clients.

In this context, IT absolutely needs a sales and marketing function.

Sales in this context is not pushing products to get clients to spend more than they otherwise would (an expense to shareholders). It's purpose is to build excellent relationships, as well as to help clients discover really strategic uses of IT's products and to align IT with business strategies. It's a consultative process that helps clients understand and address their key strategic challenges by creatively using IT's products. In the sales literature, this is termed "strategic selling," "counselor selling," or "partnership selling."

Similarly, the purpose of marketing is not to aggrandize the IT organization. It's to help clients understand the strategic potential of information technology, and make better use of IT's products.

In a business within a business, it's essential that sales and marketing are consultative and add value to clients. And since the term "sales" offends some clients (because they don't understand its value), you might call it something like "relationship managers."

Sales and Marketing is one of the five basic building blocks of structure, a fundamental line of business within any internal service provider. An effective Sales function is essential to an IT organization's strategic alignment and success.

Relationship managers are the IT Sales function (or at least a subset of this concept).

The Six Types

There are four distinct types of Sales and Marketing, each of which adds value in its own way.

The type of Sales people generally think of when talking about relationship managers is "Account Sales." These are the primary account representatives to client business units, each with a territory comprising one or more business units. They work at the highest executive levels, proactively seeking out strategic opportunities and resolving relationship issues.

Meanwhile, everyone at every level of the client organization needs someone to talk to about their business needs and how to satisfy them. This is termed "Retail Sales." They provide the default point of contact for clients' inquiries and concerns.

Account Sales staff are akin to national account managers, and are proactive with the opinion leaders. Retail Sales are akin to a storefront or a geographic sales force, and are available on demand to everybody else.

The third type is the "Function Sales." These are experts in specific business processes, such as e-business or supply chain -- processes that are relevant to multiple business units and might employ a range of IT products and services. They don't have a territory, as do Account Sales. They don't specialize in specific technologies, as do applications engineers. They specialize in clients' professions and business processes.

The fourth type is "Marketing." Marketing is one-to-many communications, as distinct from Sales which is one-on-one. This function does client communications such as brochures (including the organization's web site), client newsletters, and awareness events, Marketing also does market research, such as customer satisfaction studies and estimates of the potential demand for emerging technologies.

In addition, a Sales and Marketing function includes Customer Success and Sales Support.

What It Takes to Succeed

So what does it take to set up an effective relationship management (Sales) function? Three things: the right people, training, and teamwork with peers.

First and foremost, it takes recognition that this is not a part-time job for senior leaders, any more than engineering and manufacturing executives can serve as a corporation's sales force in their spare time.

Relationship Management a distinct profession, and a full-time endeavor. Relationship managers maintain a presence in the business units; they attend key meetings, are accessable to business-unit leaders, and study clients' strategies and politics.

It also takes the right people. This is not a "business analyst" level function.

  • Account Sales are nothing like traditional business systems analysts. They are very senior leaders, often at the same level as senior managers in the IT development and operations functions. They're business people first, the sort of up-and-coming executives that clients would love to steal for management positions in their business units.

    Account Sales staff understand the IT organization's products and services as a "smart buyer," but they are not experts in any subset of the product line (be it applications or end-user computing). They are not project managers accountable for the delivery of products and services. Building effective relationships and aligning IT with business strategies is a full-time job! And good sales executives may not be qualified to deliver IT products.

  • Retail Sales staff are more junior. But they're still business people first, with a broad view of the IT organization's products and services.

  • Function Sales only appears in large IT organizations. They're gurus in a specific client profession or business process, qualified to be high-level consultants to the business on technology-based strategies and opportunities.

  • Marketing staff are skilled in communications and market research.

Structurally, the head of the Sales and Marketing should report directly to the CIO. If you put Sales and Marketing under another senior leader, they'll find it difficult to be unbiased and sell the entire organization's product line in a business-driven manner. Furthermore, you'll find it hard to attract the right people to lower-level positions.

Next, it takes training.

  • Their training typically begins with a kick-off workshop where Sales and Marketing staff plan how they'll add value. They must understand their own products -- things like strategic needs assessments, value-added benefits measurement, consortium facilitation, and contract brokerage. They must understand the 12 reasons Sales and Marketing groups typically fail, to avoid the common pitfalls. They must understand what methods and skills they'll need to deliver their products. And they must plan their strategy for getting the function going and quickly adding value.

  • Later, they'll need training in their methods. The biggest payoff is typically found in a needs-assessment method to analyze clients' business strategies and discover high-payoff opportunities for IT. This method is nothing like traditional systems analysis. It's a client interview process, and doesn't presume any solution but rather derives requirements directly from clients' strategies.

  • Another high-payoff method is measuring the so-called "intangible" benefits of strategic applications.

  • Other key methods include internal contract brokerage, internal consortium facilitation, communications skills, and strategic selling.

In parallel with training, teamwork between Sales and Marketing and the rest of the organization is critical to success. Peers must understand why it's in their own best interests for Sales and Marketing to succeed, appreciating benefits to them such as improved client relations (and running cover for them on the politics), work that's more strategic and rewarding, improved odds of success through clear contracting and consortia facilitation, and relief from all the annoying stuff that takes the developers away from their true love, technology.

It's not just a matter of building awareness of what's in it for them. Everyone in IT must understand the products of Sales and Marketing, to avoid stepping on their territory. Furthermore, Sales and Marketing must work closely with Engineering to establish their boundaries, particularly with regard to the specific deliverables of Sales' needs-assessment service: functional requirements, the definition of which determines where Sales stops and Engineering begins.

Good Things Take Time (and Money)

A corporation without a sales force is unlikely to prosper. An internal service provider without a successful Sales and Marketing function is unlikely to succeed at effective partnerships with clients or at strategic alignment.

This critical function is not to be taken lightly. An effective relationship management function dedicated to business units allows the rest of a shared-services organization to be structured around product/technology and service-delivery lines of business, resulting in economies and synergies.

An effective Sales and Marketing function takes an investment in the right people, in training, and in working out its relationships with peers.

But with the right foundations, and given a bit of time to build their reputation for adding value, Sales and Marketing can contribute to everyone's success -- both clients' and the organization's -- in profound ways.


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