By G Joslin Vethakumar
Feature parity across all solution hues is not some delusional hype. It is happening in every area of business, though with differentiation going beyond product functionality. So, value still sells! Just that it may not have to be confined to features.
- Design can be a point of difference for one (Apple, for instance) and price for another (one example is Huawei, going by the aggressive discounting that was clear during its early stages of competition with Cisco though with 5G now it has taken on a new dimension) with dependability/credibility being a key non-functional area of strength for many with a brand value built over the years.
Yet, I have my own misgivings on feature parity and am compelled to bring up some posers:
|The Posers on Feature Parity
|1. If feature parity is the industry norm, why do product companies end up with RFPs containing thousands of technical and functional questions to be respond to?
|2. It is not uncommon to see more than 3,000 questions in tender documents even for a single-platform offering. And we have market reports screaming that the RFP instrument is being trashed for a nimbler pursuit strategy with short bid cycles! Do exceptions become a trend?
|3. There has always been a steady flow of RFPs that consume months of deep war-room focus and resource costs. If every product has every feature that businesses need, doesn’t it negate the RFP process?
|4. What purpose do demos and Proof of Concept (PoC) sessions serve if every product in the market delivers a largely similar set of features? Just for validation of vendor claims?
|5. If the above is taken to be true, shouldn’t some marketing / business pitch and price benchmarking suffice for decision-making? Cannot businesses, both issuers and responders, simply skip the arduous RFI/RFP journey Why do businesses, both issuers and responders, have to spend months and years on RFIs / RFPs? They can jump straight to commercial negotiations with a few hand-picked vendors, can’t they?
Winning Purely on Price, a Pipedream
That brings me to the crux of this piece, it is a fallacy to imagine that bids can be won purely on price, which can only be a part of the criteria for prospects. Teams can get carried away with the impression that if they can just match the offer of the bidder with the lowest price, the deal can be theirs.
- That will be a mockery of the pursuit process itself, with some opportunities even taking more than a year for closure.
- Selling on value and selling on price are both key elements of a bid strategy, one cannot be compromised for the other.
- Yet, price is upperpost with most teams in particularly Asia. With proximity to decision-makers on low-value opportunities, quality takes the backseat. If mediocrity sells, it will be infantile to make it a core part of a larger strategy.
- Price becomes a determining factor during final negotiations involving two or three down-selected vendors who have demonstrated compliance with a prospect’s core requirements.
A cost-centric prescription may work with Government entities in some countries that mandate “100% compliance at the lowest price”!
- On a broader canvas, businesses look for value and vendors have to sell that first before they can move to the final evaluation phase. The earlier phases are, therefore, more important than the final stretch.
Notwithstanding any feature parity trend, solution vendors do need some unique selling points (USPs) that will distinguish them from their challengers and catch the buyer’s attention.
Any value proposition for market positioning need not be elaborate. Just a few points of differentiation that are in alignment with a prospect’s mandatory requirements will sell the value enough.
It is futile to count on perceived boilerplate value proposition with little relevance for businesses looking for a technology transformation with a clear future-state vision or with individual consumers seeking a premium product for a rich user experience.
iPhone – Android Feature Parity?
The new iPhone versions are a case in point. Since they are not 5G-enabled, the market is rife with Android comparisons.
Yet, any impetuous conclusion that Apple is one step behind Android will be way off track.
Apple may have stayed out of the 5G realm with valid business reasons. Possibly because it was conscious of timing as 5G is not expected to be pervasive anytime soon in most countries. Why saddle consumers with higher costs when they will not get to experience the power of 5G from their day of purchase?
Likewise, Microsoft has generally followed an “embrace-and-extend” culture. That is, embracing innovations from other entities and building them to create its own offering. Be it Microsoft’s flagship operating system or the Internet browser, they were improved versions of products that were developed by other companies.
Having spent more than 20 years in bid management with industry giants (Cisco, Lucent, BT and, currently, Genesys), I had often heard the clichéd drumbeat that:
“We can do all that our competitor can, but at 50% of their cost.”
That is a claim of feature parity with price as the USP! Unless 100% compliance is backed up by irrefutable evidence, it will not pass muster. Lofty promises are often hard to keep!
If the accent on the convergence of Artificial Intelligence (AI), Cloud and Digital is gaining market traction, that can be a value proposition for innovators with an early-mover advantage.
All vendors in the industry can be expected to claim having made forays into that evolving trend. However, they will have to come through evaluator scrutiny for proven and demonstrable expertise.
Such points of differentiation will continue to hold value even as increasing feature parity is a phenomenon that cannot be wished away. The winners in an intensely competitive environment will be those who stay focused on R&D and on continuous innovation to meet evolving requirements.