The decision on Solution Provider transformation depends significantly on your business model and its ability to stay competitive in today’s market. If you’re facing intense price competition, encountering customer demands for more tailored solutions, or struggling to stand out, this shift may be the right path. Since the path forward isn’t always obvious, this article explores the critical questions every organization should consider before committing to this strategic business model transformation.
First, it’s essential to recognize that there’s no universal approach to becoming a Solution Provider. In some cases, enhancing the existing product range or adding complementary services may be sufficient, while in others, more significant changes in the business model or strategy might be needed. Additionally, making this shift can be challenging, time-intensive, and costly, leading many to question whether it’s truly worth the investment. Below you’ll find a practical guide – self-assessment for transformation – to help you address these uncertainties.
Becoming a Solution Provider: Self-assessment for transformation
In my previous article, “Solution Provider Transformation Part 1: Get on a path to a Solution Provider now or regret it later” I explored who should consider the Solution Provider transformation and why. If, after reading that article, you feel that the insights align with the challenges your organization is facing, then this continuation will be valuable to you. In this follow-up, I focus on practical ways to assess if this transition suits your business.
To support this evaluation, I’ve developed a self-assessment for transformation – a tool designed to guide you through the initial stages of this shift. It will help you better understand the preparation phase to decide if this shift warrants further effort and investigation.
While every transformation strategy must be customized to fit the unique needs of each industry and company, there are key universal components to consider during the process. I’ve summarized these into five steps and 25 essential questions.
Step 1: Find out more about your current and potential customers’ needs
A deep understanding of your customers is essential to successfully designing a Solution Provider transformation. You may have conducted similar exercises before and feel confident about your knowledge. However, whether or not you decide to move forward with the following steps, gaining more in-depth knowledge about your existing and potential customers is rarely a waste of time or resources.
Key questions to be asked:
- What do I know about my customers – their situation and their challenges?
- What are the main issues that keep them awake at night?
- How are their customers performing?
- What are the key challenges faced by their customers?
- Is there a way we can support our customers in helping their customers?
Step 2: Know how your current and potential customers purchase your products
You likely have a good understanding of how the purchasing process works. But do you? The details are critical in the highly competitive environment that most commodity suppliers face. A deeper understanding of the process allows you to gain a competitive edge by reacting more effectively. Whether you transform your organization into a Solution Provider, this knowledge will help you sell more effectively.
Key questions to be asked:
- What does the purchasing process look like?
- Who are the stakeholders, both decision-makers and influencers?
- What are the specific needs of each stakeholder?
- What are they truly seeking when they purchase my product?
- How do they make decisions, what factors do they consider, and how important are these factors?
Step 3: Understand how others are dealing with challenges similar to yours
If you’re facing specific challenges, rest assured you’re not alone. Most of your competitors are likely dealing with the same issues, as you’re all operating in the same market. Understanding how they address these challenges and where they stand on their journey to becoming Solution Providers is crucial. They might not have started yet, or they could be well ahead. The companies you’re competing with today may not be your direct competitors once the Solution Provider transformation is complete.
Key questions to be asked:
- Who are our current competitors?
- Who will our competitors be after the transformation?
- What makes our competitors successful, and where do they fall short?
- How far along are they in their transition to Solution Provider?
- What differentiates them from the rest of the competitive landscape?
Step 4: Find out what you already know
The knowledge within your company is often much more significant than you might realize. While top management views this knowledge from their perspective, they don’t know everything. A substantial portion of internal expertise is spread across various positions and departments with direct, ongoing interactions with customers and the market. This isn’t just limited to sales and marketing. It extends to production, R&D, supply chain, and even legal functions. Therefore, gathering this information shouldn’t be restricted to casual conversations with the sales team. It requires a formal internal audit, focusing on the market, customers, and their needs.
Key questions to be asked:
- Is the feedback we receive from the market consistent with our internal knowledge and perceptions?
- Where are the gaps or discrepancies between these two perspectives?
- Who are the key stakeholders we interact with on the customer side?
- Do we have sufficient connections and exposure beyond the procurement team?
- How easily could cheaper (or better) suppliers replace us?
Step 5: Dig deeper, talk honestly
If you think you’re the only one – or one of just a few – pushing for change and the Solution Provider transformation, I have good news: you probably aren’t. Despite differences in how a Solution Provider is defined or how to tackle the current challenging market conditions, there is likely a wealth of knowledge across your organization about what needs to change and how to do it. Your task is to create a safe environment where your colleagues can openly share this knowledge, without judgment, names, or dismissing ideas.
Key questions to be asked:
- What is working well in our organization, and what isn’t?
- What would your top priorities be if you could change anything in the organization?
- What does being a Solution Provider mean to you?
- Do you believe our customers and potential customers want us to become a Solution Provider? Why?
- In your opinion, what steps do we need to take to become a Solution Provider?
Solution Provider transformation: next steps
Whether you decide to pursue the path of the Solution Provider transformation with internal or external support, you likely already have an opinion on whether this is the right direction for your organization. Even if, for reasons such as lack of support, shared vision, or resources, the answer is “no” or “not now,” following the process we’ve outlined will still bring valuable insights.
If you opt not to proceed with Solution Provider transformation, I recommend focusing on gathering feedback from both internal and external sources to improve processes within your existing framework. This approach can drive meaningful improvements and may pave the way for a future business model transformation when conditions are more favorable.
If you’re committed to moving forward, it seems you share our perspective on the importance of this shift and are prepared to invest the necessary resources. The best starting point is to summarize critical insights into your business environment you’ve gained so far during the self-assessment for transformation, focusing on three key areas:
- Customer needs assessment (covering both current and potential customers)
- Competitor analysis (covering both current and future competitors)
- Your own company (organization readiness)
With these insights, you’ll be well-prepared to embark on Solution Provider transformation. For detailed guidance on the next steps, see my previous article, “Solution Provider Transformation Part 1: Get on a path to a Solution Provider now or regret it later” where I outline how to make this shift effectively, step by step.
Wrapping up
Solution Provider transformation is a highly strategic decision that demands significant time, effort, and resources. That’s why I firmly believe that investing in a thorough self-assessment is invaluable. The 5-step approach outlined above (self-assessment for transformation) can help you determine if this shift aligns with your organization’s readiness, though it may not always be crystal clear.
At EMBS Group, we support companies through this complex transformation process. If you’re considering it and want to weigh the pros and cons, let’s have a conversation. Our experience could clarify some of your key questions. We’ve observed that once companies embark on this path, there’s rarely any turning back. The question is not if but when and how best to prepare. From our discussions with clients, it’s clear that this transformation isn’t just an option anymore. It’s becoming a necessity.
