Vishal: Welcome back to session two of our podcast, Winning Moves. Again, this is myself, Vishal Reddy, accompanied by Padmanabh Rao. Paddy. So coming back to our conversation from our last week’s session, Paddy, I wanted to talk more about the sales and operations today. And one of the first few thoughts that came, questions that came to my mind is well, in typical companies we see that is a huge difference in how the sales function operates and how the operations function itself, you know operates and the people that are involved. What do you see? And now what is interesting, what we have found out is there is quite a bit of similar, there’s a good amount of in terms of you know the activities or the strategy, there’s a common, there’s a commonality right between the sales and operations in AP backed platform company.

Paddy: Sure. That’s interesting.

If you, if you recall what we discussed in our last episode, which are the one of the key features distinguishing marks of a PE business is that it’s highly dynamic. It’s almost a daily, daily thing. You know, they are constantly adapting at a daily level, at a weekly level to what’s going on in the market versus the thesis they are working towards. Now if you take a step back and then try to see exactly what happens inside the PE business, you know, on the floor, right, in the various functions and departments that might be there in that company, in that business, you can actually take a bird’s eye view as to what is going on there, right? On a daily level, you are asking about sales and operations to begin with, right? So typically in a regular business, a sales department that has own inside people, field people, has own tools processes, right and skilled people who are experts in selling whatever is the current catalogue of that business, right. And they will have all their territory concepts, each one is specializing.

There is a whole art and science to managing sales.  In fact, even there is a whole art and science to the selling process itself. You of course have rock star sellers and you have the regular average sellers. So that is the typical situation in any business. So that is the world of sales in a regular business. And then you have the operation side where largely operation is about fulfillment. It is about fulfilling whatever contracts have been sold. Operations is just fulfilling those order. It is order management fulfillment and then eventually leading into the building side of things. So that is your operation.  So this is what you will find and that too it is a separate world in itself, people taking an orders and doing all the motions and processes. There are tools and technologies to do the fulfillment. But now if you look at the actual floor of a PE business, you will see this distinction between sales and operations is constantly breaking down in a PE business.

Why PE Like I said, the focus of PE business is the opportunity that PEs towards which is working and and that is all that really matters. Frankly, that’s all that really matters, right.  So what happens as a result of that is that there is no really good reason to say this is my catalogue, that this will be my product catalog for the next six months, for the next two years, for the next one year. There is really no valid good reason, logical reason whatsoever to say is going to be my, my, my territory management. This is going to be my sales process that they are going to do for the next, you know, one year or two years. And you will see what is the, you know what, what works and what doesn’t work and what tweak it. There is no good reason in a pee business to make, to believe, to have those beliefs to operate in those fashions. And again, on the building side they cannot. On the fulfillment side, they can say we’ll only have these kind of contracts. We will not have those kind of contracts, no, right. So those types of contracts, yes, we will have these, yes, we won’t have those. This is how we are going to fulfill them, right?

This is the kind of catalogue these so-called black and whitish language of a business, which is normal in a regular state business, right. PE Firm will never will never subscribe to that way of working because the main thing for a PE business is the opportunity that therefore that they have identified whatever it takes, whatever is required to, to accomplish the opportunities. What is the business. If you don’t do something which is required, which is which is part and parcel of accomplishing that opportunity, then you’re not doing what needs to be done. So a good sound PE business, every PE business is good and sound, right?  Will not subscribe to those terms. And therefore we look in the ground, you’ll find it very hard to say, oh, that is a sales department, that is the operations department, that is the sales process or that is the standard process they’re doing, they’ll continue to do. No, you’ll find things that are a bit more fluid, right? It’s not just about roles and job descriptions.

It’s also about processes, how the business is organized. It has very few hard and fast boundaries among people, right? Everybody needs to be intelligent, more informed, highly collaborative, right? Processes are more enterprise level, more corporate, more business level rather than departmental level. The concert departments are very, very weak in a PE business because what matters is the opportunity, right? That’s what we say. And therefore from that everything else derive, everything else is fluid. Your tools are different, even your people’s skills are different. So the whole that whole universe there is very different versus a non PE business that’s where. So one might well say, yeah, sales and operations are almost combined in a PE business. You might find that right quite often. Not every case, but certainly, as I said, the boundaries are more blurry. They’re not.

Vishal: Sure.

And yeah, again, adding on, you know, another thought that I was having is, is this particular to do with say Platco’s operating in the high tech industry where there’s subscription revenues or is it, do you see that happening in other industries as well? Just try to understand.

Paddy: On the contrarya, I would say it’s easier to be a bit more regimented, a bit more structured in the so-called high tech or technology businesses where you can still somewhat force fit sales department away and separate from an operations department, right, Because that is the nature of the animal nature of the software stuff. Quite possible, right? You can do it. It is feasible at least whether you want to do it or not, it is a different story, but it is relatively feasible to the nature part of such. But if you are dealing with discrete products, you know, services or hardware businesses, that is almost impossible in a PE business which is dealing with say hardware, I do not know furniture may be or TV’s or construction example or services.

You know it is much harder to to maintain those boundaries between sales and operations because the kind of contracts they made, the kind of markets they are constantly evolving and then trying to serve the territories and even defining what is the product. You know, in one market they might say they might start up with the services as this and then when they want to expand two weeks they are trying to the adjacent market, they may have to renew just that product service offering itself definition itself a bit. So now you you end up having so-called 2 products. If you start saying, OK, I have two now and then six months on, then you will end up with eighty of them. You cannot start counting these things. You have to have a different way of running these things, right? It is not going to be 80 in that example. It is going to be just one product with a different way in which you build and deliver and contract these things. So yes, definitely I would say in high tech factory question Vishal, in high tech it is probably easier to draw some boundaries, but definitely in the non software it is much harder and you will really find.

Vishal: Yes, yes, there are problems and there are ways to tackle them.

And coming from again from some of the experience that you’ve had with some of the engagements with platform companies, how do you see strong fluid grade infrastructure CRM easing out some of these activities from a sales and operations perspective as well for a platform company?

Paddy: OK. So we’re not talking about tools that these PE businesses might need to support their various business processes, right, such as CRM for example, which is which is close to our home, right.   So, so the demand, the question was what is the kind of demand a PE business will have of its tools of its tooling and tools, right.   So just as demands its people and processes, just as its people and processes are highly fluid. When you say fluid, they are more complex. They use the word fluid to mean as a synonym for complex, right? The JDS are a bit more elaborate. They are more you will find multi dimensions to it, right? They are not fixed to a particular, you know highly specific narrow jobs.

There are multiple jobs in one, one role, right? They are more role based in that sense, right? In IT we talk of role based accesses. They are really implemented in the PE businesses, right? So it is more of roles that people that you will find people playing in PE business, right? So and the processes too are more complex, right. You will probably see a few processes which have wide implications. They probably cover half or 3/4 of the whole enterprise. One process unlike in a regular business based, some process are you know department level or function level. They are much more smaller processes, unlike that in a PE business, you may have just a small quantity of process and each of those processes, you know, end to end capture some 2/3 of a whole company because it is a long processor. It runs around multiple functions, multiple roles. So that is the nature in a process and people, the tools you know, we talk in our in our IT world, we talk of PPT, you know, people process and tools and tools are simply tools and tooling are derived from the processes and then written people.

So the tools to have to be equally capable of of meeting these complex requirements, fluid requirement. So that’s why we talk of standard platforms. Again, there is an ideal to this, there is a, there is a, there are two parts to this. You can have some tools that are extremely simplified. We have seen some PE businesses where the tools are highly simplified because that that keeps the distractions away. It just gets the job done, right. And then you have the other end where the PE business requires very tools which are which can easily quickly, not just easily, quickly adapt constantly to this fluidity in their processes and people, right? So you need really platform scale, platform grade tools, right? Where we where you can change things rapidly, right? Rapidly, easily, right. So we see the the demand for both of these highly simple tools, highly maybe even simplistic, but that is what it solves the problem.

It is good and then really strong platform scale tools which can what is the platform school where the tool can be constantly adapted, change modified to meet what the process and people need. Not a slow going change, but rapid changes. So all the school which fall in the middle range, which are neither too simple or not platform great tend to become very expensive. And then the sharp teeth business will always try to keep away from those tools and tools.

Vishal: Sure, yeah. And that that’s interesting and also coming you know looking at the whole providing can help platform companies, feedback platform companies by enhancing the post merger integration by and help them achieve you know sales and operational excellence. You can again recall a past project that we have done. You can always talk about that as well.

Paddy: Sales and operation excellence, that’s the name of the game for a PE business as we understand.

And in the context of post merger, Vishal, post merger integrations, we are talking of a scenario where the PE firm, the platform company is acquiring businesses to merge into itself and be consolidated market or consolidated technology or product market, whichever, right, different opportunities there.     So the first problem there just to highlight what first to define the problem that the PE business is facing there, right? As it merges these acquired businesses, right? These acquired business will come with their own culture, their own sales processes, their own operating processes, right? So it’s a company that is being bought and then start to be merged, right?  And this has to be done speedily. The merger has to be done speedily. And typically the merger can, there is no one way to merge things there, you know, depends on what the what is the reason this company was bought, right? And then what is thought to be accomplished with that with that acquisition, right.

So for example, for example, it may well be that the platform company expects expects the current processes operations of that acquired company to continue as is undisturbed.

Vishal: As a separate.

Paddy: Entity as a separate entity and maybe collaborate with this platform Co, but really continue as this and they’ve only acquired it for some some other purpose. I mean technology normalization in the back end or just acquiring customers and so on. But they don’t want to disturb the actual operations of that of that acquired company. That could be one could it could.

Vishal: It could also be from branding perspective.

Paddy: You know, exactly, Yeah. They don’t want to change the brand and they want to maintain that, right? Absolutely. The second one could be that they want to do the opposite of it, which they want to do with the brand. They have acquired the company for the actual competencies. Maybe they have very strong operational competencies, right? Or maybe they have a strong sales people, sales people, the sales organization, right. So they may have bought it for the talents and competencies. They do not want the brand. In fact, they want to do with the brand too. That is another side of a goal and objective the acquirer might have with the acquired business, right? So depending on what the case is, right?

And again, importantly, it may with each acquisition, the goal may be different. The same platform core with acquisition one today might have the goal of saying maintain it as it is. And then three months down the line when they acquire a second business, then my goal might be to the other other goal, right? So these are not just one goals, one type of goals of PE business has. These are just adaptations to the thesis and what’s happening in the market, right? So now if you take a step back and see what are the requirements of sales and operations, use the right word, how can a PE business of this in this situation? What should it do to constantly excel at sales and operations at the people level? Just out of the most complex part, the people level, they really need to have a team, say people organization where who can adapt, who can think on these lines and then adapt themselves. That’s the first thing, right? So there’s a whole people layer to it. That’s the first thing, right? And then follow the people. You have the processes to the processes to constantly adapt, right? It is not as people will get stuck, you know, with the process.

I’m going to stick with this part for the next two years, three years. We cannot change this. No, I will just explain. You may have to constantly tweak and change this based on what’s incoming, right? And then the third one, tools, if the people processes are going to get so complicated and complex and so fluid, the tools are even of the three things at some level, you know, we tend to dismiss this quite often, Vishal, but actually IT is very hard. IT is very hard compared to, yes, you can, people can change because the human brain, you know, people are resting to change. That is for a good reason. IT is a risk management. But all that aside, human brain is heavily flexible at the last time. So we change. It’s a team, we work towards a goal, we change, we do whatever it takes to achieve goals. In that sense, relatively easy in terms of work required communication. But processes are just agreements among people. That too is more or less changeable. It is just protocols. But tools are hard in one sense, I say hard. They’re physically hard, right? A hammer is a hard tool. A computer is a hard tool. A software is hard. The software is not. Software is a particular set of ways in which something is done and not done in that sense. So all tools, by definition, they’re actually hard. They’re meant to fit to a particular process. Now, if your process is so mobile, it’s moving your tool and tooling tool have to have their capability and it is not easy to make tools that are that mobile, right? So to excel to that’s your question, how do you excel? You need to not just have tools which can do this right, where you can build these tools. You also need tool makers, tool suppliers, tool makers, tool maintainers, tool redevelopers, right, tool developers, tool developers, tool who can do these things right. So one, yeah, again, it probably comes back to the people itself, even the tool developers, your partner who your tool partner is also another company. They too have people, they too have processes, they too have tools, right. So it goes down to that level.

You need to really evaluate and have those partners who understand these dynamics of your business and who can actually deliver what you need to run your business, your PE business, right. So, yeah. And so there at some level, yes. So usually it goes down to that low level. You know who are your tool partners? Are they like you? Yeah, right. If not you you are saying.

Vishal: You don’t have your own. Or can they adopt to things like?

Paddy: You exactly, right and then you know, and the platform, great tools, you know, and there again, if you go to that, perhaps your question, right, to get your question on how do you exist in operation, you really need sweets, you need these tools which can accomplish these things constantly, right? And there we look at what is the current offerings in our product market, tool market, right, packages and so on, right? Again, in the last 30 years, the industry has moved towards packages, right? More products and software as in customs software, customer ID custom software is probably a nice thing, but it’s expensive, it’s almost complicated. It doesn’t really suit the PE market in any way, right? So you look at packages again, we don’t want to go into history of IT industry or package in the last 30-40 years, 50 years.

But nonetheless some you know the best packages too, either they are very expensive, in which case you need to make the cost case for them. And then you need to have the tool makers and tool developers maintenance. We can work with them and get the right value out of it. Or you end up with some sub optimal tool choices and then that can harm your long term objectives and goals. So yeah, to to your question, how do you excel if you sorted out your people and process that well, which I’m sure the business will need to sort out on the tool side? Yeah, it can actually become quite a challenge in many cases. The tools might become the the the showstopper. It can become the blocker. It cannot be up to the task of your processing people and.

Vishal: That’s why you’re going on to invent, yeah, more from the existing tools, right? You’re almost acting like to sort of meet the whole customization, the requirements of the platform company. Yeah.

I mean we can go on talking forever, but I think we’ll take a pause on today’s session and in the next weeks session, you know, we’ll be talking more about marketing and service in a platform company

Vishal: Thank you.