138: The ROI Dude and the ROI Guy Talk About, What Else but ROI w/ Steven Kaplan (The ROI Dude)

Speaker 1 Hello, this is Tom, pasillo the ROI guy and welcome to the evolvers podcast, sponsored by sales. Enablement platform, provider, media fly our mission is to provide you the independent insights Community advice and tools to guide your sales content and value. Enablement Journeys, and fuel your Professional Evolution. My guest today is Steve Kaplan, he is the principal of cloud consultancy access flow. Whoa, and he is also a managing partner in HMG Ventures, which is a sister company to HMG strategy and that is the largest IT Network leader in the world. Steve is also the author of the book, the ROI story a guide for it leaders. And most importantly, Steve is better known as the ROI dude. Indeed, folks, the ROI guy and the ROI dude are all in one place. First, please welcome Steve Kaplan. Speaker 2 Like you Tom, it's a pleasure to be here. Speaker 1 So, the ROI dude, I really want to know how did you get into Roi and definitely how did you become come to be known as the ROI, dude? Speaker 2 You know, I got my undergraduate and MBA degrees and so of course was very familiar with concept of Roi but started a computer. We tell our business and eventually we We morphed into networking Novell networking and and Citrix wooden frame and and back in those days Roi and TCO were not commonly used by manufacturers to talk about the value of their products. But when Citrus win frame came out, you know, we quickly realized, you know, this is pretty amazing stuff. That eliminates need F servers remote offices at even eliminates the need to upgrade PCS. And so I started doing Roi Analysis and the company, I founded, and ran was tucked away in a little corner, in the North Bay, you know, wasn't Orlando or Dallas or somewhere. So, it's kind of in the middle of nowhere and, and we did really well with those. All right now, skis, in fact, in 1999, Mark Templeton CL, Citrix, was coming out to San Francisco, and he asked her breakfast with me and we came to breakfast and he said. So, tell me, how are you spelling so much Citrix? Because we use our lie and I actually helped such a develop their first tool and then worked with Gardner on subsequent tool. And after I sold that business, I start, I came across the end where a few years later and said, well, this is another extraordinary value proposition. So from the beginning, we started a company, my partner, Gary lamb and I just focused around the value of Enterprise virtualization with VMware. Again, something that wasn't done a lot in those days and we did Financial analyses for people which was just really easy to do because it was so clear the value and we got some International Wars. In fact, the Citrix before sold we were named the first two trucks partner of the year. So the same thing happened at the second business and we ended up selling that to a publicly traded company and worked there for a while and eventually left enjoy nutanix and enjoy. In the interim space I discovered Twitter and so a natural handle was our oh I did yes. But just kind of funny story my book, the ROI story a guy Party leaders. As you mentioned, I came up with a comic character called Roi, dude. Even geek your Alter Ego for me and he gives out helpful tips throughout the book and a couple of years ago. Nutanix is customer. Some conference Orlando, my book could just come out. I had a pre-release copy. That was carrying around with me in my backpack, and this was the officer that I live up in Lake Tahoe. It was just a couple days after I had injured my shoulder snowboarding and so I was in a sling as if some pain and my hotel room where I left, my wallet was quite a walk to the convention center. And so the Anaheim Convention Center and upon arriving, they had the sign must have valid ID. I'm thinking myself, you know, no big deal and I walked up to one of the registration desk and said, you know I'm I've been unemployed attached to those days for over 6 years. I'm a speaker at this event. Well, that didn't work then I start getting a little concerned. So I ask to speak to a supervisor and I have I'm a credit card with me and I held up to it. You know. I have a credit cards. I'm sorry you must have a government-issued photo ID so you know, driving the long walk back to my Tell him I sling and my pain. I had one. I'd last idea to reach my backpack. I pulled up a new copy of my book. I flipped open to a picture of Roi dude. I said look, that's me and they let me in, Speaker 1 it's good to have your book around with you as your ideal. Though, it's a little bit easier to carry the real ID than in the book. But yeah, I've got mine up on my shelf and copy of mine is never too far away from me as well, but I have not used it as ID. So you mentioned, you know, the partner companies that you had and I wanted to ask you, you know a lot of partner organizations, they have a hard time getting meetings, they have a hard time, sometimes justifying in the sale. How important was Roi to you in building those partner businesses that you Speaker 2 had You know, the first one, once we got into Citrix, went specifically, Citrus win frame came out. It was pivotal to it really only two of us. That one of my head spells guys, and eyelid did the actual ROI analysis, but it was pivotal to making the sales. And in fact, we sold the, we did the first Citrix deployment was called Thin Client in those days, completely Thin Client, for Fortune 1000 company and that completely hinged around the ROI house. This would never happen without it. And the second company, we started around the VMware Consulting again from the very beginning, we used ROI analysis to drive the sales. In fact, had a couple of times, come up during the next three years. Before we sold it, where organizations were skeptical, the results that we showed them, and we're kind of resistant. And I told them, you know what, we'll go ahead and put in for free will give you all the The software and the services and the hardware set everything up. You just agree to give us half of the documented savings over the next three years and neither did that but they did go with them. Yeah, Speaker 1 absolutely. Well I think it showed that you were that confident in the outcomes and I did work on both of those models for Citrix eventually came around and build a Thin Client model. We did one for them. So I got to work on that and VMware certainly, we're still Vmware's is still a good client of ours, but I worked on their initial kind of virtualization models and tooling as well. So, that was back in the days of a linnaean. But to fun projects, I do think that if you're a partner organization, traditional reseller, even just a partner, having a business case and using that as your go-to-market, as your kind of differentiator is key. So I wanted to jump into that a little bit with you there Steve because I do think it's important and we work with a lot of Of organizations that are trying to build out their partner groups. And I think that making sure your partners can communicate and quantify the value, and the unique value, they add to the solution is as important as arming, your direct sales force with the same capability. So at nutanix, you built out what you call the customer success Finance group. Tell us about the group. It has a unique name. I haven't seen a name like that before on a value program. tell us about the program, and some of the success that you had Speaker 2 Well, you want to, I actually was recruited to nutanix to start the channel partner program because of my background. In fact, for the first couple of year, first few months until I start hiring like crazy, I was the channel partner program and but it didn't take too long for former clients of mine to see my job change on LinkedIn and say, you know, what does in Unix and so even though it's running channel to kind of get got the side gig going, I'm doing PCOS and Roi is for clients and showing the value of mechanics. And in fact, I brought some of the biggest early clients over to nutanix. My boss headed up becoming president of the company. I sent him an email once after a couple two or three years. And said, you know, if I was in sales, I'd be the career third, highest sales person. But eventually I went to him and I said, you know, as we grew and grew and grew and he said, Probably time to bring in somebody who scaled this before in a global level and I'll go back to doing pure TCL and Roi. So, so that's what I did and went well. And then I ended up hiring people and ended up growing to be a global organization. And we were, you know, we had a lot of the challenges that everybody who does value Consulting faces but we were pretty successful. We had a over six years and 89 percent average close rate. Which is, you know, very high and and and you know, I when I left you to Annex in June, I wrote a short LinkedIn post about it and mcrn. Also gracious, computer racial erode article about my leaving and I guess I reassured that and between both shares in articles, I got hundreds of comments and it was just so Grateful and appreciative to see how many people say. Well, you know, you really made a difference for us or made a difference for me and, you know, honestly, in my long, it career one of my most gratifying moments, I would say, I'm most appreciative moments and memorable moments. And I think it just a test, walk to the importance and the impact of value selling. Speaker 1 I love to how you In the customer success before customer success. Really was the movement that it is today and that you related it to, you know, customer success Finance. So focusing on not just a pre-sale Roi but you know, making sure that you're driving customer success and that the financial outcomes where there was that purposeful and how you named it, you didn't call it a value consultancy or a business value group or something like that. You really focused on The success peace Speaker 2 and we actually were originally called the client strategy group and we're under sales, but wouldn't have started its customer success division. We moved under customer success. So that's why we decided to go to the finance but we, you know, like you just kind of implied. It goes Way Beyond the initial sale and and we had initiative that we called project superhero. And the idea was, we would go back to customers who were running nutanix, technology for 18 months. Three years, five years. And we would do a look, look back now. Alice, quantifying, you know, how much have you actually saved in hardware and software in op X, how is it impacting? Added your IT staff lives. Now that they no longer have to work weekends and nights doing upgrades. How's it impacted your? Your turn? And those analyses were very successful and very appreciated by the customers because it as we all know, we always have to go back in ite if you get a change in Senior Management or upper management. A lot of times you have to say, say what, why are we running this stuff? What are we paying this money for this? And so it's always good to be able to A can show the value of it against the Baseline and that's good for individuals to assist Solutions provider or somebody working in it. I think it's important to their own career and justifying what they've done for the company and quantifying it. And and it goes beyond just the direct cost savings. This also goes into what is the value you've driven for the organization in terms of being able to drive increased revenues or customer satisfaction or other Do you know type, same type of similar metrics. Speaker 1 I agree. What was the biggest challenge that you faced at nutanix building kind of creating building launching growing the program? Speaker 2 Now, I would say it's the same type of challenge that I faced at INX, which was the company that produced my, my second VMware business. And, you know, that is that hard a lot of times to get sales people on board with value. Selling Financial selling, and I think that sometimes because they're uncomfortable with it uncomfortable with the language and have a do it, they may have fears that slows down the sales cycle. They, they may have a lack of trust in the analysis, every I'm like, when I started out doing our lives today, every manufacturer has, you know, an Roi tool and so on. And so, I think that, you know, these These factors combined. Make a lot of sales, people were left him and that was the biggest challenge to overcome a dinette in the biggest challenge at botanics. And the way that I would try and mitigate that was through internal publicity, you know, publicizing success stories, the internal selling I guess with the word you get publicity around it and and success stories and get sales people to speak up and about their successes and flag post and so on and continue to drive enthusiasm and continue to push Speaker 1 Yeah, and I think that friction because sales turns over because there's always some hot new tool or hot new initiative or hot new campaign. It has to be constant, right? We've seen companies that we work with where they initiate a great launch and they'll support it for a little while, but then they'll get busy, supporting analyses and fail to do some of that ongoing promotion and sure enough the program tails off. It really needs that constant Stoking of the ROI fire and Roi Flames. Speaker 2 Yeah, I agree completely and I think we also helps tremendously, you know, if you see it come from the top, the chief Revenue officer or the vehicle or the CEO and you see some more organizations out there. Now that I think are doing a great job in, this Oracle was a big one really all the major Cloud providers NetApp and I really like seeing that push come down from high. Speaker 1 Yeah, we've got even one customer Koopa, who's their CEO wrote, a book value as a service to describe the company. You can't get, you know, much more pointed and higher than that. And so, that helps a lot. It helps the entire program because, you know, the entire organization is oriented around value and I do see that when you're trying to get the adoption, if sales is very focused on the transaction, still, if they're focused a lot on And product features and product training. It is hard to get the adoption where you need it to be because you're almost fighting that old-school mentality and value then gets perceived as something that slows down the transaction cycle, right? So it's funny that you ran into that and and were able to overcome it with some of these techniques. Speaker 2 I think that you see that are I would guess without working a lot of organizations that the still very common thing. And the reason I called my book, the ROI story is that an analysis of financial analysis provides the opportunity for more than just quantifying a benefit and the analogy. I like to give is a producer putting on a show, you know, she has to find the right script and the director and the actors Tarzan, the lighting and the screen and the, the scene building and the hundreds of variables, but the end of the day, the goal is to have this audience standing up giving a standing ovation well in financial analysis. If you're, you know, coming at it from a solution provider perspective, the goal is to have the customer standing up, handing you a purchase order and doesn't mean that it's going to be biased or anything. It means that's going to be comprehensive and taking the opportunity to interact with the and not just as a sales person asking for po. But instead as a consultant have telling steam, tell me what your challenges are. What is your environment look like? What are your business objectives and how can I T help meet those objectives and then using the analysis as framework to come up with that approach and answer Speaker 1 Totally agree. And to that end, I called my solution value story. Because even though I'm the ROI guy, and you're the ROI, dude, both of us had figured out along the way that it's the story that matters, right? It's not the numbers. The numbers are there to support the story. Yet we see so many companies developing still, although there are certainly some that have made the transition really. Really well, there are some that, you know, they create this very complex spreadsheets. Sheet. And it's so easy for a value consultant much less a seller or a partner to get totally lost in the numbers. And what doesn't come across is. Why you even care about that down time calculation or why you care about that, it productivity, or cost avoidance calculation. And what what's the challenge that's being solved. What is it costing them today to do? Nothing. What's the opportunity for improvement? The solution and how the solution actually delivers safe? Things or value and then, where's the evidence to kind of back it up and that's close in my methodology, spells close, but it gets lost if you don't concentrate on the story as much, if not more so than the numbers. So we always like to work with customers on the story first and then the numbers and how to quantify that differentiating value s, so that the story shines through and even before the story, it's focusing on who are the roles that are involved in the decision making? And gosh, we know how many more roles are involved in every decision now, Speaker 2 too. That way exactly feel the same way, but I'll give a kind of a, I don't know if you called a corollary or a Counterpoint, but that's kind of the whole Cloud space. And, you know, Marcus, I'm do of interesting Horowitz made big news, a few months ago when he wrote this article about public health expensive. And if you're a software company can amounts of billions of dollars of market cap whilst opportunities, you're paying a public cloud, and he talked about repatriation. And so I was a good article, but I Out of was your kind of very limited in the sense that it was an all-or-nothing type approach. Your all public Cloud Rolling for him when the reality is that most organizations is hybrid. Yeah. But you know, there's so much pressure out there for organizations to lift and shift everything to public cloud. And Below, you know, it's only costing pennies a minute. So they say of course we're going to save money but they don't do the analysis. And you know, public cloud is wonderful. It's great. It's got scalability capabilities and so on that are extremely valuable than in some cases can't be replicated on from, but the important thing is to do the analysis and figure out what's right for your organization. And maybe the story is that? Yeah, buddy. We want to go to Cloud. We want to be a cup cake, great but at least know what's that costing? Yeah. Yeah instead of just blindly going into it Speaker 1 though. The story is important but like you said the numbers are there and they do need to make sense as well as part of it all and I love your thought of you know you're almost like an orchestrator as a seller where you've got a weave this compelling story and the numbers are a part of it. You got to have kind of the hero that you're lifting up, which is your customer, you know, there's got to be be a villain somewhere in it. Maybe changing market conditions or something else. And then there's got to be this bigger purpose, right? Because what are we here for at the end of the day. And so I think the Art of Storytelling is as important to the ROI dude and the Roa guys successes as anything and hopefully as a seller or a consultant, you're feeling the same way. Speaker 2 Yeah, absolutely. And so the other side of really, this pressure to go to public cloud, is the villain will call Call him or her from a status quo. Standpoint someone who's, you know, career has been vested around a particular technology and maybe he earn certifications around that, that value that he values. And it's when it's comfortable with, or maybe someone's going to retire in a few years and she doesn't want have to learn this new disruptive technology and bring it in. So that that's the other side of it. Someone who's kind of resistant to financial analysis because of these Personal Agenda meetings or maybe they even have all the best intentions but world for the organization. I certainly think most it professionals are like this but they don't really understand the new technology enough at a Nuance Financial level to do a analysis is going to make sense for the organization. So you have this whole type of Legacy status quo environment, that also is very important to do an analysis and to have the technical Acumen to to really look at the The nuances of the technology so that the organization can make the best decision. Maybe that's the stay with the status quo but at least again should know what that is. From a cost standpoint, Speaker 1 totally agree. So you know, we've got the pandemic and all of the changes that have occurred since that it is help to accelerate. Do you think Financial justification is important? Now to it solution providers post pandemic like Do you seeing in terms of changes? We're definitely seeing that. You know, there are very few purchases including renewals certainly expansions and if it's new definitely that don't get approved. Unless you've got a solid story that ties to a top-level, business objective and a solid business case that goes Speaker 2 with it. Yeah, I agree. The pandemic certainly has caused. I think even more accelerated cost Consciousness among organizations. But even more importantly, this imperative for digital transformation or business transformation of what he want to call it or die. And so at that point you have the it solution has to be chosen within the context of how it's going to facilitate the business objectives. And but again like you Feel that really good financial analysis is very important underlying Speaker 1 that. Yeah and if you're right the demand for transformation transformation Services Solutions, if you're able to tie to a transformation project, the opportunities are there, so more opportunities than ever. But we're also seeing that it needs to be justified because Executives and finance are way more involved and the business is more. Involved in effect the business is probably driving a lot of the change, right? So it's not necessarily an IT business case anymore. It's definitely more of a business oriented business case, make sense. Or am I dreaming? It, it Speaker 2 makes makes absolute sense. But again, I'm going to Veer off your little bit and I count point and something you mentioned earlier in the broadcast and that's the importance of differentiation. And for a solution provider, you know, A lot of times, they can differentiate themselves pure size, or balance sheet, but, but especially for the smaller ones. I think it's crucial that they differentiate themselves by recommending the right Technologies for their organizations, which are getting them. Facilitate the business objectives. So it so it's really important for them to be able to differentiate whatever this technology is for there's cloud or on-premise hybrid. And and then do the underlying value of it and how it's going to change the organization from an economic perspective from cost savings. But then also to facilitate this digital transformation and other business objectives. Speaker 1 Yeah, I don't think you can make the case, just looking at like you said the cost savings or maybe even the it savings anymore, you've got to have that business impact in any Cloud case. That ties it back to the accelerating the transformation or making the transformation. Easier because of the application ecosystem, making it more scalable worldwide support. Those kind of elements I'm seeing is very important in these business case again or the business metrics and the IT metrics not just the it metrics for Speaker 2 cloud. Another really important element of all this that we haven't really discussed is trust, you know, Hunter Mueller at hmd strategy. He talks a lot about the importance of trust and in that you know, itm business and you know, if somebody spends a lot of time on analysis whether that's a Solutions provider or manufacturer or somebody works an it or a research organization, whoever it is if the Makers, don't trust the results then nothing else really matters that they're not going to go forward with at least not based upon the analysis. And in my book I talk a lot about different ways to build trust as an analyst, whatever we that that implies. And I think though that of almost all the things in it that I've seen this trust for the analyst is just absolutely imperative. Speaker 1 I completely agree. Stephen, you know in Nit sales for solution providers. The Challenger sale has been kind of the way to, to try to get customers to abandon the status quo in change and I'm still a big fan of making sure that you're tying to an emotional factor to get them to change, but very quickly. Now, you have to Pivot and you can't press too long on that emotion button because everyone is under amygdala overload. It's a very uncertain environment and there's already a lot of fear, uncertainty, and doubt and If you press too hard on that with Challenger you can get them to freeze. Right? So what does that mean? Trust has become the big factor and do they trust you do they trust your organization and then even more? So do they have trust in the decision itself that you're asking them to make? And I think that Financial justification the business case can really go a long way if you do it right in building up that trust in the Speaker 2 decision. Yeah. And and some of the ways that organizations can don't trust or but solution fighter that that analysts can build for us is by using the organization's own numbers. And, and like, you mentioned that, I have this big long spreadsheet. That's impossible to wait through at least from the Report perspective, have a very clear, very simple Justified where you can track numbers. We, when we do an analysis, when I do an analysis, my objective Always be able to have my customer stand before the CFO or the board and tell them what these numbers are real. They're conservative. You know, there's no way we don't hit them. So that's all part of building the trust. You know, another question that I get asked a lot is what happens if the customer doesn't know their numbers doesn't know the cost and the challenge there is that if you try and wait till you can Ascertain, the cost of everything from a legacy environment standpoint. The nozzles will never happen, never get complete agree. But what I started doing was adopting actually learned this from Professor Malhotra of Harvard probe. Perhaps the world's top negotiation expert and he's written some books and he usually had a fiction book came out to which is really good. But anyway so what Do is just, I think you mentioned anchoring is used as constant anchoring, will say, well, you know, your legacy, Stan, you're using it a lot. You're pretty big user. We find that typically they go for between six hundred thousand a million and based upon your usage, we think 900,000 would be reasonable place. Or can we use that? And then we always go back and change it later. That's, that's the way I always like to push through these unknowns funny thing is that sometimes people become really Stood in those placeholders and they start really defending them other. Internal people Scott. It's Kind of a Funny concept, Speaker 1 I know. But a lot of times we do find that they don't know the numbers, they don't know where to find them and you don't want to have this. Be a endless data collection exercise where you never get there down to the decimal point of validity in the analysis. So having good smart defaults that are research-based I think is keeping it clear and simple and transparent is Good. Try not to have it be too complex, whether it be the presentation of the results or even the calculations themselves, and then their own numbers, where, at least they validated every one of the assumptions that you're making and also have put in their own numbers. When they do know them is important and I think the Final 14 trust is evidence where you know, in Steven you mentioned. This is a key part of the group where you do look back analysis, you know, being able to point to customers that have Achieved those results in similar Industries, similar locations, similar roles to them, where you can hold up these Heroes that you've analyzed. I think that that goes a long way towards building that trust in the decision as Speaker 2 well. Absolutely, a lot of times customers won't want to usernames that with analysis, they considered all pretty confidential but wherever possible to point to names and the success and same thing internally. Like I mentioned talking to sales people that have had great success in using it and that kind of builds because a lot of salespeople are Jaded by all these manufacturers are always out there that at least appear to be. Toward their solution and and sort of kind of jaded and seeing internally, the success that other sales people can have whether that's at an end user or Solutions provider. Then generates the trust that, wow, this is this really works with a valid processor, it's not just out there to sell our solution. It's out there to help the customer make the best decision for her organization. Speaker 1 Yeah, and Steven hopefully we are moving beyond those, you know, magical Black Box calculators that you see on So many websites, she put in three numbers and out pops, seven hundred percent ROI, and oh, magic, look, let me buy 10 of these today just doesn't work that way. I think part of it is you need to have the transparency and build the trust. And then the second is is that although you can certainly have a calculator on the web, you need to be able to drill into it. Make sure it's transparent show where the numbers came from. Be able to have the buyer Change any of the assumptions in there and even produce a negative result, if they want, that's trust in their decision-making and their capability. And then, I think a big part of it with sellers is, it's part of the Journey, of doing the analysis, that could be sometimes, as valuable as the ROI analysis, that pops out the end. Talk about that a little bit and how you think it helps the seller and building that trusted advisor Speaker 2 relationship. No, I think my own story as I mentioned, in my transition from Channel partner to janek's really exemplifies that that through the analysis. I did over the years, I have many clients that trusted me and even though they didn't know anything about because they call it a new, the next it figured. If I join that, it might be worth taking a look at and obviously didn't buy it on site, you know, they said hey doing analysis for me. And in fact, the first one I did at D tax was for a company called Fairway, Independent Mortgage company and the CIO I work with are two different companies before that. Before you join them back. In those days, there were quite small today. Their last, I heard one of the top three largest private mortgage companies in the United States. But doing this analysis for him of this time detached very small tiny company with new technology. But we showed them. Well, you know, you can say all this money by moving to this technology and they did and now they run all their applications on hundreds of botanics nodes and been extremely successful. So yeah, I think that like you said going through the analysis process, you become much more of a consultant than a salesperson asking for po learning about the pains and the environment aspirations of the customer and and working. Feminine lot of times, a bond forms, in that whole process. I remember the fortune 1000 company, I meant, I've mentioned when I was had my Citrix business, I would work this show together in those days before Zoom. You know, 10:00 11:00 at night, Cisco working on his analysis because he wanted to be really good and so you can't almost help but form a bond when you go through that type of exercise Speaker 1 absolutely I've had a few of those. Workshops that have gone on for days and a couple at Microsoft that we did for clients train McDonald's for weeks to the point where I had enough McDonald's hamburgers. I think, in two weeks her for a lifetime but that's that's a different story. So what is the one piece of advice? The ROI dude would like to leave her father's Community with today. Stephen Speaker 2 make a really brief, do the math and tell a story. Speaker 1 That's great. Do the math and tell a story? Steve, how can the evolvers community find and reach you online? Speaker 2 I'm on LinkedIn on Twitter at Roi, dude. Acts the flow.com. Those were probably the best place. Speaker 1 Awesome reach out to Stephen. I know that he has a lot of advice and stories on the application of Roi and value. And thank you, again, Stephen for joining us to make the evolvers, a great and growing Community. Speaker 2 I really appreciate the opportunity Speaker 1 until next time, evolvers keep evolving.