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Is Over-selling Harmful?

October 7, 2015

Sometimes, software vendors will oversell their LIMS or ELN product. What this means is that they deliver many licenses to customers but don’t have enough staff to actually implement that software. So, how much of a problem is that? As usual, it depends.

First of all, when the market is hot, it’s not necessarily easy to prevent over-selling. Here are some factors to consider:

  1. Multiple sales channels. When multiple divisions or sales people are out selling, they’re doing their best to perform well. They want to keep their jobs for another year and under-selling doesn’t help them in that effort. Thus, it sometimes happens that several channels are selling so much that there are just too many projects when each of them closes their sales books, for the year.
  2. Poor planning. Some vendors actually do think they can just stretch the people they have to work more hours and get the extra work done which doesn’t necessarily work.
  3. Overoptimism. Related to (2), some sales people are just overoptimistic on what their company can do in a crunch. They truly believe get more services finished is merely a matter of hiring more people (where do you find them in a pinch?), working harder (as if everyone isn’t already working hard) or “digging deep” to solve the problem (whatever THAT means).
  4. Changing estimations. When software vendors start estimating projects to customer who might purchase their product, those estimates are really that – just estimates. Once the sale is made and the software vendor starts to work with the customer, they often unearth needs that weren’t necessarily mentioned in the initial sale or they find that some of the sale items are much more complex that initially thought, which increases the amount of services needed to be delivered, meaning that more resource time is needed.
  5. Greed. Let’s face it – there are some vendors out there who do just want to sell as much as they can. Even if they can’t fulfill all the services required, they still get the licenses and maintenance fees.

Recently, I wrote in this blog about the issue that there are some areas of our industry where there is probably no real shortage of resources but there might be for the actual software vendors or for specific services vendors. For those of you who think that these vendors will bring on any of those other resources in the industry, that is not the case. There might be some vendors who will do that, but that is probably not the norm. Most vendors will cross their fingers, hope they find more people to hire, or just let the extra work slide if they can’t get to it. By the way, some of the software vendors carry millions of dollars of backlog work. Some of that work will NEVER be done. Some customers lose their budget at the end of their budget year that they wanted to use for that work and cannot justify it, again. Also, new projects and projects with large customers take precedence.

If you’re a customer who is waiting for resources, just beware that they probably don’t have a 50/50 chance of being delivered and adjust your project plan, accordingly.

Finally
No-one wants to under-sell and have their people sitting around without enough work – that hurts the software vendor. Over-selling hurts the customers, significantly so when there’s a huge amount oversold. As such, in the choice of who to hurt, the choice is to hurt the customer.

With that said, it’s not always avoidable. Additionally, there is probably some amount of work that really shouldn’t be finished, ever. In some cases, pruning back on the amount of work done in these systems might be good (and we’ve all been on THOSE projects).

Additionally, it’s not as if the customer will know the over-selling is going on. You can’t avoid it. You will find out about the time your project starts without all the resources promised (or doesn’t start, at all!).

Gloria Metrick
GeoMetrick Enterprises
http://www.GeoMetrick.com/

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