When a distributor is investing in a technology refresh there is often an early decision to make – do we build one ourselves, get a specialist 3rd party to build it, buy a existing package or customise an existing package. Clearly budget comes into the decision process but even some fairly small organisations opt to build their own solutions – why with so many established solutions on the market does this decision persist?

Well I hear a number of reasons used : “My sales processes are unique”; “The solutions on the market are over engineered”, “My Point of sale technology is my differentiator so it has to be different from everyone else”, “I don’t trust the suppliers”, “I don’t want to be held to ransom by suppliers for updates and changes”, “I want be able to change things quickly in response to market trends”. Ultimately it’s about control.

Control is a valid reason but the decision to go it alone needs to be made carefully. Many, many, many companies have tried to build their own solutionss and found it creates a monster which grows and grows within its own organisation. More and more demands for certain functionality comes in and more and more resource is required, costs escalate and as technology changes the solution can’t keep up and falls further and further behind the competitors’ systems.

Of course the choice is more complicated than simply build or buy – you can build the solution in-house or get a third party to build it; you can buy a pure package, or buy a package and tailor it; you can buy a package which comes with a toolkit to maintain it, or you can buy a set of functional components and glue them together. Which one is best depends on your organisation but decision can be boiled down to control (over functionality, architecture, suppliers) vs cost.

The diagram here positions the different approaches against the dimensions of cost and control. The eventual position of any option will depend on the effectiveness of both the distributor and the supplier but a range of likely relative positions are shown.

The pure package is suitable for some but typically those with constrained budgets. A package that the supplier configures on behalf of the client provides an element of control but the costs of doing so – especially with on-going maintenance makes this a brave choice. However where the supplier provides a toolkit to the distributer providing the choice of self configuration the level of control increases often with only minimum or no overhead. This level of control may still not be sufficient for some larger organisations where the choice becomes largely one of self build, build from a set of 3rd party components or getting a 3rd party to build. While this route gives greater control it is high cost and the success is dependent on ensuring the right skills are on the project to help avoid the pitfalls of many, many large projects from the past.

There is no right or wrong approach but distributors must go into the project understanding the issues with there approach and then they can manage them and enjoy the undeniable business benefits of a good system implementation.

I recently attended a corporate seminar on raising finance for new start up companies. The single message that kept coming through is while there are many good entrepreneurial ideas out there, good ideas need good management to become a success and good management is not plentiful. Yet without good management not only will the idea struggle to get to market once funding is received, the entrepreneur will struggle to raise funds in the first place.

The biggest weakness sited is often sales management. Poor sales are always blamed for failure as clearly if more sales were made more revenue would be achieved. However life is rarely that simple and poor sales are often a symptom and not the route cause - which may lie in a poor product or poor delivery or simply bad luck. What is true though, is that better sales management will certainly increase the chances of success. So if its known to be so important why do so many people get it wrong.

Well first, sales as a skill is often under-valued. “Anyone can sell” says the founder, “its common sense”, as he recruits a mate to fulfil the role. Secondly when sales are finally valued, it is seen to simply be a matter of training to sort things out. However it’s my belief that while you can create an ok sales person through training a really good sales person or manager, especially for a high value or consultative sale, is born to it. They are natural communicators, natural managers, able to work in a high pressure role, motivated my money and/or success, commercially astute, driven, quick thinking and of higher intellect than normally (wrongly) considered necessary for a sales …. And to be a successful manager they need to combine all this with assertiveness and strong people management skills. No wonder there aren’t many of them and when you find them they cost the earth!

So what can you do to get one off these mythical beasts on board. Search high and low and don’t take second best – if in doubt don’t recruit! Get external help and guidance – there are some good recruitment consultants out there (as well as some awful ones). If you have people with the traits in other jobs, you can then grow them into the role but you will need to support them and not just give them simple training but ongoing mentoring.

Once you’ve found the right person – trust them, back their instincts, pay them well and don’t lose them. A good sales manager will make the job of the rest of the management a lot easier.

If you would like to discuss sales management or sales mentoring then contact mark.loosmore@at8-group.com

…as our French cousins would say – in more familiar terms change is the only constant and certainly, with regard to the recent output from the FSA, further changes are on the way.

In a substantial u-turn, the FSA has abandoned its push to keep the Menu and the Initial Disclosure Document (IDD) in place as part of the changes for the new EU inspired Markets In Financial Instruments Directive (MiFID). The new regulations are slated to arrive on the 1st November 2007, with a tranche of changes in the way Financial Services companies have to transact business and the way they communicate with consumers.

The FSA wanted to retain their current regime, but aligned to the ‘MiFID way’. The European Commission rejected the FSA’s request as they considered the UK regulator to be ‘gold plating’ the MiFID concept.

In some quarters the news was greeted by loud cheers – the Menu was not liked and many thought it wasteful and irrelevant – we have yet to see what form its successor will take.

So, the end result is that the FSA has published a new Policy Statement, PS07/06, which defines the new conduct of business rules that will replace all the current COBs – but with time running short, the changes to fit in with the new regime have yet to be finalised and should be published later in the Summer according to the mandarins in Canary Wharf.

The upshot of this leaves the regulated advice market in limbo – the FSA has stated that from November the Menu and IDD are no longer mandatory, but firms should consider continuing to use them until the new rules can be enforced. Some commentators have suggested that during the interim period, adviser firms will jettison the Menu and IDD whilst others are less clear and feel their continued use offers a degree of regulatory ‘insurance’.

Once the FSA has re-assessed their position and produce the next set of rules, what is without doubt is there will be a significant impact to the level and nature of the information and processes used in a regulated sale.

What is clear is that product providers, distributors and solution vendors alike must adopt methodologies that are flexible and can react to the ever-changing regulatory landscape – if you think you’ve got it sorted, inevitably you won’t have six months down the line.

And then don’t forget the FSA’s Retail Distribution Review.

C’est la vie!