Why Study Your Client's Business Model?

Not spending time to understand client's business model is a single biggest mistake a consultant can make when embarking on a software implementation project.

Many times software implementation teams with limited experience start a project with the intention to finish the project within the budgeted timelines by taking for granted the knowledge required to understand their client's business model. Deeming it a lag on the schedule; but to their surprise it takes them longer to finish the projects. I have seen teams are left to deal with following issues (not an exhaustive list but common symptoms) when they do not spend time to learn clients business model and key processes.

• First and foremost, you cannot gain client's trust which is the axis of the entire engagement.
• You cannot reason back with client requests by asking relevant questions.
• You cannot differentiate between what is important vs. a wish list
• You cannot control the outcome of any of your deliverables since you do not know what client is really expecting.
• You cannot negotiate a cost effective alternative if client did not like your original idea or solution. Hence you end up agreeing on whatever the client is asking which may not be the best solution for either of the parties.
• You become afraid of the failure because if you know the business model you take valid assumptions before recommending a solution.
• You never really spread your wings to recommend something which is innovative because you do not have the foundation knowledge necessary to back it up.
• You cannot advise the client when not to use a certain functionality because it might increase their operational cost or introduce errors into the operational data which in turn results in wrong reporting insights when planning and making decisions. For example, introducing Item Unique Identification (IUID) system can multiply the store staff workload to disproportionate levels but only if you have done a good job weighing the benefits of tracking at UID level against the costs of introducing this activity. Another example can be handling customer returns in an omni-channel environment that requires understanding of the retailer's overall fulfillment strategy plus including a) customer refund mechanism b) store inventory layouts c) staff training and d) logistics costs for processing return to warehouse or supplier before advising and setting-up any customer return policies.
• You cannot recommend and choose the reporting KPIs as it depends on the industry the client operates in and not because everyone else is using it. Quite often you end up developing and providing the same outdated reports and measures that client had been using historically lacking any fresh perspective into their data.
• Knowing what other players are doing in similar situations is a quick way to agree on practical solutions without having to reinvent the wheel. However without any knowledge of the tried and tested business practices you do not have this leverage.

Bottom-line; learning about your clients business and operating dynamics should not be left for your competitors to explore who may come up with an idea or solution that you fail to recognize earlier. Numerous times I have seen implementation companies losing the client not because they fail to deliver the project within the agreed time or cost constraints but because their consultants were not aware of the model. Hence did not succeed in gaining necessary trust with the clients business teams resulting in producing poor quality deliverables.

So for your next implementation; make yourself responsible for the end to end delivery of the project and start by allocating time & effort to understand your client's products and services, revenue channels, important events e.g. mega sale, costing, margins, know who they are sourcing from and why, how effective is their distribution network and infrastructure, how trained is their staff from head quarter to shop floors, are they able to give their customers a memorable shopping experience, what is their competitive landscape, sources of receding margins, key process inefficiencies and growth opportunities. These are a few quintessential considerations that will go a long way not just for the current implementation but positioning you for repeat business and overall credibility in the market.

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