Challenge & Tool Selection:

I am an architect for Application Managed Services projects in an IT outsourcing company in India. I am  involved in the presales process and is required to design “winning” solutions for the RFP(Request For  Proposal) that we receive from our sales team or proactive proposals that we need to prepare as part of  our “farming” initiatives. I will relate a situation that I came across recently, where I used story telling  and mind mapping to some extent as an effective tool to uncover unstated objectives and requirements  of the client CIO.

This proposal was a proactive one, where our client partner identified an opportunity with one of the  largest New York based global banks. The client IT portfolio was heavy on Mainframe and knowledge  management was very poor. The applications were not scalable and people who were supporting it  were closing in on their respective superannuation dates. Once these SMEs who held enormous tribal  knowledge between them are gone, the critical applications will be without support as those  applications were built and supported by them for the last 20 years as a minimum. The bank, for all  sense and purpose cannot afford a long downtime for these critical applications. Availability had to be  99.9% for all those applications. Transition was a risk as finding people with such legacy skills is itself a  task and, in this case, there is always the additional load of a large volume of undocumented knowledge  held by the SMEs between them. The CIO of the bank was also worried about the high cost of  ownership for these critical applications and wanted to reduce the cost by as much as 40% over a  period of 5 years. This opportunity was not picked up by some of the bigger IT outsourcing firms as  they could not give “proper business case” along with a way to manage the risk in a way acceptable to  the CIO. When our sales representative spoke with the CIO about this opportunity, he was partly  dismissive. He informed our sales representative that he can only afford to spare 30 minutes to hear us.  It is up to us if we wanted to use that 30 minutes in a single session or break it up into 2 sessions of 15  minutes each. We are also not supposed to send out wrong messages to the people who are currently  supporting the applications.

Application:

As the “Architect in Chief” for this application support pursuit, the sales representative asked me how to  utilize the CIO’s time. After some deliberations, I opted for 2 slots of 15 weeks each separated by 7 days.

I had asked for the first slot to be scheduled within the next 3 days. I wanted one slot where I can  unearth the key objectives of the CIO (apart from what my sales representative told me) and the other  one to present the solution and “business case” that the CIO was so desperately looking for. Before the  first call, I only knew that he wanted to reduce the TCO desperately and his own appointment was for  that purpose. However, he understood the underlying risk of transition and wanted to feel confident  that the risk associated was not a compromise with the TCO. CIO in this case was the key decision maker  and empathy for his needs had to be my top priority.

My Approach:  I did some secondary research on Linkedin about the CIO, his background and education  before I met him for the first 15 minutes. I figured out that he is a Stanford graduate, who comes with a  track record of setting IT spends for large organizations right. He had already served in several

multinational banks like JP Morgan Chase, Citibank and HSBC in the past. He is the CIO for the last 5  months only but has the confidence of the bank’s board as is evident from the Annual report. I also  referred to some other market research content on the internet, which spoke about his stated goal of  improving profitability and making the bank one of the “fastest to its customers”. I needed a  compelling story to gain his mind space so that he gives me a bit more than 15 minutes for the second  meeting which was more important.

The diagram below gives a view of what I understood from my research and planned to utilize in the  conversation that I intended to have with the CIO. This is my mind map in a way before the client call  #1.

I wanted to be absolutely sure of the tacit needs of the CIO. Every CIO usually comes with aggressive  TCO reduction initiatives and Steve (name masked for confidentiality) was no different. Deep inside, I  was trying to figure out why our bigger peers were losing out on this opportunity. In addition, I wanted  to be absolutely sure of the scope. Below is the summary of what happened in that meeting.

•  I took 2 minutes to introduce my employers and gave a brief of the kind of experience we had  with our banking clients. All through I had an eye out on the expressions of Steve. Steve at this  moment was very non-expressive and did not show a lot of interest.

•  In the next slide, I told him that while I understood the typical objectives of TCO reductions and  efficiency improvement, I remain cognizant of the risk involved.

•  I asked him the question on what is it that actually is keeping him awake for this application  portfolio. This evoked a response from him as below:

o “I have a lot of issues in this area that keeps me awake. Thanks for asking this question.

Superannuation bills are quite high in US and I do not know how to pay those. I will lose  the best of them in the next 6-9 months. I do not know who will support these  applications then. These people have a lot of tacit knowledge between them. Hiring  them as consultants post their retirement is the best option for me, but that is gonna  charge me around 30% more than what I am paying them. You have a standard solution

with standard differentiators that I am sure you will show me in the next meeting. But, I  will meet only if you have a solution to the problems I told you.”

•  If you had looked at my mind map, I was so happy to have guessed the cost of superannuation  as one of the primary pain points.

•  The only other inputs he shared in that call is that he mentioned that there are around 30  resources out of whom, 6 key SMEs are going to retire in the next 6 to 8 months. All resources  are onsite at the moment with only 1 person working from India.

•  And last but not the least, he informed us that he is looking beyond cost savings.

Clearly, the key concerns were around the cost of superannuation that the bank had to bear in the next  2-3 quarters. The CIO was meticulous in time management and was very precise about his ask and  concerns. I was happy that I could get him to speak on the call. While his problem was not easy to solve  considering that standard solutions must already have been presented to him by competition, I was  happy to locate my story’s chief protagonist, key pivot for my story and the only thing for me to do was  to develop my narrative to grab his attention in the next 15 important minutes that we were looking  forward to.

My story: I did my maths with help from the delivery teams. Following are the highlights from my  analysis:

•  Superannuation costs is the biggest unstated pain point for Steve.

•  Risk is high. To remediate the risk, I may end up increasing the intended price of the deal.

•  If we invest / absorb 50% of the cost of superannuation for 50% of the SMEs, then, we will need  5 years to just become profitable. So, revenue recognition and margin is low. If we however,  invest / absorb 25% of the cost of superannuation, we become profitable only towards the end  of year 4. There is not much of a difference from that stand point.

•  However, if we can convince Steve to give us the contract for the next 8 years, it will be a win- win scenario for both Steve and us. This is the reason why:

o We earn profits from year 5 to 8. If we refrain from giving productivity benefits (as we

also need to make some money), then we will manage to generate sufficient revenue  compensating our investment in the initial years. Effectively, I wanted to amortize the  cost of their superannuation across 8 years.

o A longer engagement gives us the opportunity to suggest transformation & cloud

migration at the end of year 4 and should the client accept it, we have the option of  increased revenue from the transformation program and in all probability, a longer  revenue stream.

o In addition to all that, we will deliver 55% TCO reduction at the end of 8 years through

increased offshore leverage and other service improvement initiatives like better  knowledge management, automation, cross skilling, etc.

o Steve should be happy that we are helping him with his superannuation bill for 4 senior

resources if not all.

o With 55% TCO reduction, Steve can also present a very rosy picture to his bosses.   o In addition, we can still offer him soft credit for the first 6 months of service delivery

post transition.

So that was the narrative of my story. I empathized with Steve’s concerns of high superannuation bills,  high TCO from onsite operations and high risk of transition. In the next 15 minute session, I was aware  that unless I wow him in the first 5 minutes, I will never have the next 15 minutes to speak. Steve had a  frown in his face when he entered the room. He was clearly expecting another boring presentation.

I opened up with a statement “Good Morning Steve. How will it look like if we tell you that we are ready  to invest into 50% of your superannuation cost for 4 senior most SMEs?”

There was silence for 10 seconds. Steve responded, “You get me hearing son. Go on.”

I narrated the story and showed my empathy for his concerns as Professor Leidta had suggested. I  informed him that we are looking to be your partner and not a vendor. So we decided to invest into  50% of your superannuation bill for 4 SMEs. In return, Steve will contractually commit to 8 years  contract and ensure the availability and services of these SMEs to enable a seamless, risk free transition  and stabilization process. I reasoned with him that we also need to make money, so we need a 8 year  contract in stead of 5.

In return, I also proposed further transformations and service improvements which will enable  reduction of ~55% TCO compared to the current spend at the end of 8 years.

I also informed him about my observation that they were falling behind to competition as per their last  annual report and gave him the option of soft credit for the next 6 months. That will enable him an  opportunity to clean up his balance sheet.

Last, but not least, if he chose us as the transformation & cloud migration partner, I offer him a discount  of 2% on the migration cost.

Add to it the proposal of an extended transition of 6-8 months to manage the risk.

The discussion went on for more than 30 minutes. For Steve, this was the first time, some vendor had  actually and truly shown the desire to be a “partner” according to him. Before closing out the  conversation, he “instructed” our sales representative to “share the SOW” by the end of the week to  him.

I learnt the importance of thinking out of the box. That was my first tryst with design thinking in a way. I  could think differently. I was challenged very hard by my management. My attention to detail and data  helped calming the nerves at my organization. It was not Steve alone who saw the long-term picture. My  bosses were happy that we could have an eye out for long-term contract. Without their cooperation,  this would have been very difficult to turn around.

