Luckily, it is perfect spring weather. Gail, the Vice President of marketing and sales for BGSoft, glances around. After the long day of presentations everybody was so happy to be outside. The din of three hundred salespeople talking, all at once—even outside—is amazing. Nothing can stop a salesperson from talking. Surely not another salesperson, which just provokes them to talk louder. A blast of smoke from one of the huge barbecue pits sends her off toward fresh air.
Smiling left and right, she picks up a glass of wine from a waiter. Gail surveys the crowd. The mood is up; the day has been good. Overall, anyway.
But where is Scott? The crowd spills off the large porch, down two levels of terraces, and onto the lawn. She sees the team from Australia looking like they're about to pull some prank. God, and it's still so early. She quickly looks away.
She can't spot Scott. His height usually makes him easy to pick out of a crowd, but...
"Gail!" She smiles and exchanges a hug with Brad. He's been with BGSoft for quite a while. She sincerely likes him—these are the best type of business buddies.
"Great sessions today. How come Lenny didn't come up with this great architecture sooner?" he teases, his eyes twinkling.
Someone touches her arm. "Gail, I'd like to introduce Sean."
"Carole, how nice to see you." She can't remember who Sean is.
"Hello," she smiles at him, shaking hands. Smiling is easy. His mischievous Irish grin is infectious.
"Miss Collins." He bows his head. "'Tis an honor, I'm sure."
"This is just great!" Brad interrupts. "You know, we work so hard, the travel, the trade shows. We have to fence with the competition and then dance to please the customers. I know I come to these corporate shindigs ready to air my gripes ... and then Lenny does one of his magic shows and ... well, all I can say, once again, is, I'm so gung ho about BGSoft!"
The Irishman nods, "Seriously, the competition is going to eat our dust."
People are beginning to line up by the barbecue pits. She feels a familiar firm grip on her shoulder. She turns.
"How does the queen of the ball feel?" Scott greets her.
"Scott, I was looking for you," she begins.
"I'm flattered," he grins.
"Have you noticed the reaction to Lenny's presentation?" Gail asks.
"Yes. And I must admit that it's too enthusiastic for my taste."
"I should have known something like that wouldn't escape you. Did you also figure out why everybody is so enthusiastic?"
"Not exactly," Scott admits. "When can you fill me in?"
"Tomorrow morning, first thing?"
"In case you've forgotten, at breakfast I'm speaking to this fine sales force you've gathered here." He keeps smiling and nodding hello to people passing them, all heading to the buffet lines.
"Scott, it's not just important, it is urgent, we must meet before the day starts." Her tone of voice contradicts her beaming expression.
He looks at her with slight surprise, "Okay then. Seven o'clock? Hello Gunter, Nice to see you."
They drift apart, doing what they are supposed to do—making themselves available.
Now Gail has to convince Lenny to be at that early-bird meeting. That won't be too hard, she knows exactly which buttons to press. But first, she has to find him. She heads toward the nearest large group.
Scott opens the door. Room service? Oh yes, Gail probably ordered coffee for them. But why so many cups? Before he even signs the slip, Lenny arrives.
"Got tea here?" he asks.
They glance at the tray. It's there.
Lenny finishes pouring himself a cup of tea and reaches for the coffee pot. "Scott, there is no way that I'm moving the release date of version eight forward."
"Who asked you to?"
"Isn't that the purpose of this meeting?"
The picture starts to form in Scott's mind. Laconically he answers, "We'd better wait for our Machiavelli."
As if on cue, there is a knock. He opens the door.
"Good morning," Gail greets them as she walks in.
"If you say so," Lenny snaps. "Gail, before you get started, I want to make one thing clear. This time I'm not going to yield to any pressure. The release date of version eight is firmly set for October First and nothing—nothing at all that you might bring up—will change it."
"I'm just asking you to listen."
"No way, Gail." Lenny is determined. "This time you listen to me. Do you realize what version eight is?" he asks rhetorically. "It's a complete shuffle of the internal structure of each and every module. We are changing the entire architecture of the system."
"Yes, Lenny. I listened to everything you said yesterday. And I loved every word."
"You still aren't listening." Lenny starts to sound desperate. "Do you know how many possible bugs such a change creates? Gail, this version is unlike anything we've done before. It isn't simply a matter of writing a lot of additional code. It's much more involved. We are going through almost every piece of code, and making many small, but important changes. It's like massive brain surgery. If we don't devote enough time to do thorough quality assurance, we won't just be releasing a system with bugs, we'll be releasing a disaster."
"I understand," Gail says calmly.
Scott examines her. "You understand, but you still want to release version eight earlier?" he speculates.
"That's correct." Gail is firm. "We need this version no later than July first."
"What?" Lenny almost jumps to his feet.
Scott puts his hand on his shoulder. "Calm down, Lenny. Gail would not make such a preposterous demand unless she had an alarming reason for it."
Gail looks at Lenny and says, "'Alarming' is a fair description."
"What is it?" Lenny's tone is calmer but still aggressive.
Gail turns to Scott. "Last quarter was the first time in years that I had to really worry about not meeting the forecast."
"I told you that the Osboron deal would come through," Scott interjects.
"Yes, and luckily it did. But you know that we were sailing too close to the wind. For the first time ever, we didn't have any backup."
Scott nods.
"Well, it looks like this quarter we're in a much worse situation. From what I see right now, we are going to be short at least a hundred million. I don't see any way to meet the sales targets besides doing what we both always objected to. We must make large concessions to push forward some major deals."
"That's very bad," Gail agrees. "Because it will ruin our chances of meeting the forecast for the next quarter."
"To that extent?" Lenny is apparently surprised.
"Yes," Scott confirms. "Our pipeline of prospects is getting thinner. Pushing some major deals forward will create too big a hole down the road."
"Why is our pipeline in such poor shape?" Lenny wonders aloud.
Scott and Gail are looking at each other, but no one volunteers an answer.
That makes Lenny even more nervous. "Are we losing our position in the market? To whom?"
"To no one," Gail answers.
"So what is going on? How come all of a sudden we're facing such a crisis?" Lenny is upset. In a sharp tone he asks Gail, "Can I get some answers?"
Before Gail has a chance to answer, Scott interjects in a calm voice. "Lenny, it has nothing to do with our marketing or sales. They continue to do an excellent job. Finding someone to blame is not the way to solve a problem."
"You're right," Lenny admits. He finishes his coffee, then picks up his cup of tea and leans back. "As the cliché says, when you are in a hole, stop digging," he jokes. "Now that I'm somewhat calmer, can I hear what's actually going on?"
"It's something that we should have predicted a long time ago," Scott starts to explain. "Still, I'm embarrassed to say that I myself didn't even suspect it until it almost hit us in the face."
"Maybe you should be more paranoid/' Lenny mocks.
"That's what I keep on reminding myself," Scott smiles back.
"Can you lay it on me in one sentence?" Lenny prods, reminding Scott that he's anxious to know what's going on.
"There are not enough deer left in the forest."
Lenny looks puzzled. "Okay you two, lay it on me in as many sentences as you like."
Gail looks at Scott. He signals that he will explain.
"As you know, over eighty-five percent of our revenues come from large companies, companies which have over a billion dollars in annual sales. There is a limited number of such big companies."
Understanding starts to spread over Lenny's face. "How many of these companies have already bought an ERP system?" he asks.
"Over eighty percent."
"So many? So you're telling me, that in our main market, we're reaching saturation?"
"Yes," Scott confirms.
Gail doesn't look as if she agrees, but before she has a chance to object, Lenny offers a suggestion. "If there are not enough deer left, then we'd better start shooting rabbits. The market of midsize companies is far larger than the market of big companies."
"Yes," Scott agrees. "The midsize market, companies with annual sales of over a hundred million, is at least ten times larger than the large companies market." Seeing how uncomfortable Gail is, he continues, "But there are some problems with it. Gail?"
"Calling it 'some problems' is the understatement of the year," Gail snorts. "We have quite a bit of experience selling to the mid-market. If you think that it's any easier to sell to a five-hundred-million dollar company, think again. The sales cycle takes about as long, somewhere between six and eighteen months. And the efforts to make the sale are almost the same. The only thing that's different is the money that we see at the end. That's not the same at all.
"Do you realize what it would take to generate four-hundred-million dollars in sales from mid-market clients? In each quarter we would need to close deals with something like three hundred companies. I don't have the people."
"Eventually, though, we'll have to go there," Scott remarks.
"Eventually maybe, but not now," Gail says decisively. "Right now we don't have a large enough sales force, and much more importantly, we don't have the time."
Scott and Lenny look at each other. To emphasize her last point, Gail says, "We have the problem on our door step. Maybe we can manage this quarter, but it is unrealistic to expect a three-fold increase in our mid-market sales for next quarter. It's totally unrealistic."
"So, what do you suggest?" Scott asks.
"I don't agree with you that the market of large companies is saturated. Not for another year at least. I'm not talking about the still significant number of companies that have not yet bought an ERP system. I'm talking about two major markets. One is our own clients. We tend to forget the fact that just because they bought our system doesn't always mean that we can't get additional large sales from them."
"You mean additional modules?" Lenny inquires.
"No. As you know, our price is based on number of users. For many of our clients the number of users is appalling. Take for example Sitburg Industries. This company has over a hundred-and-fifty-thousand employees, but they have only six thousand users. I think we can do a lot there to encourage much higher usage of our system."
"That's not going to be easy," Scott comments.
"Nothing in our business is easy," Lenny replies, "but we thrive on the difficult."
"That's right. And our development can thrive on the difficult task of providing version eight in three months," Gail says, grabbing the opportunity.
"Forget it," Lenny says flatly.
"Gail, you haven't yet told us why it's so important to move the release date up," Scott reminds her.
"There's another big opportunity that is now opening wide," Gail starts to explain. "You know that many ERP implementations are floundering. Four years of effort without seeing the end of the implementation in sight is not rare. As can be expected, companies that have found themselves in this situation are not happy. There are threats of litigation in the air."
"You call that an opportunity?" Lenny questions.
"Definitely," Gail declares confidently. "Since the beginning of the year we have been working on identifying companies that are sick and tired of their ERP vendor. So far we have located at least a dozen that we think might be ready to change. What we need is an excellent pitch, something to convince them that they will not go through the same fiasco with us. And Lenny, we heard such a pitch. Yesterday. From you."
"That's why your sales force is so encouraged by Lenny's presentation." Scott has his confirmation.
"Exactly. Everyone who is out there trying to sell knows that the battle field has changed. The war is no longer on options and configurations. It's about speed of implementation. It's about simplicity and ease of installation. And that is exactly what Lenny was talking about. Not just talking, but proving that our system contains everything and is still simple. Showing exactly how it's achieved. It was convincing. It was beautiful. Exactly what we need."
"And it still can't be done before September." Lenny tries to pour cold water on Gail's enthusiasm.
It doesn't work.
"Lenny, you've performed miracles before. I trust you."
Scott puts his hand on Lenny's shoulder to prevent him from commenting, and asks Gail, "Suppose that we had version eight right now. When do you think you could bring in more sales?"
"Within two to three months I can bring an additional one hundred million. Maybe more. We have all the lines in the water. The fish are desperate. What we need is good bait. That's all."
Keeping his hand on Lenny's shoulder, Scott continues, "And if we announce that we're ready to accept beta tests starting the first of July?"
Gail answers, "Make it June first and it will help to push some of the mature prospects over the hump. As a matter of fact, it might solve our problem for this quarter. But Scott, this will not help at all with the real dilemma. The companies that I'm talking about, those who might be ready to change vendors, will not even consider testing. They've had more than their fill of tests. They want something solid."
Scott turns to Lenny. "Most of the code is ready, isn't it?"
Lenny knows that he is now fighting a losing battle, but he still tries. "Yes, but that's not the issue. The quality assurance is the problem."
"And if you go to India to personally supervise the efforts?"
Lenny looks as if he has just swallowed a particularly bad-tasting frog.
"Lenny, it's our only choice," Scott says in his deep voice. "The alternative is to miss the forecast, one quarter after another. And you know what that means. Gail is right, September is much too late. We have to come out with version eight no later than July. June is much better. And we have to announce it to our sales force. Today. Every day counts."
Lenny looks sick, but he manages to mutter, "India, here I come."