Episode 8: Rebecca Wetteman of Valoir on Getting the Most Out of Technology Investments
Adam Honig: Hello and welcome to Make it. Move it. Sell it. On this podcast, I talk with company leaders about how they’re modernizing the business of making, moving and selling products and of course, having fun along the way. I’m your host Adam Honig, the CEO of Spiro.ai. We make amazing software for companies in the supply chain, but we are not talking about that today. Instead, today we’re talking with one of my favorite people, Rebecca Wetteman, the principal of Valoir. Rebecca, welcome to the show.
Rebecca Wetteman: Adam thanks, great to be here.
Adam Honig: Yeah, thanks so much for coming on. Now I know what it is, but maybe for the audience, Valoir, what is it, what does the name mean? What is this all about?
Rebecca Wetteman: Sure, so Valoir is an analyst firm, the name literally translates to “value to be worth something” in French. So we help companies understand and maximize the value of their technology investments. And we’re primarily focused on the CX in the EX space.
Adam Honig: Got it. So for companies that are thinking about technology investments, you help them understand what they could get out of it or how does that work?
Rebecca Wetteman: Right, so it’s understanding how they can build the business case for technology investment, but also maximize the value of the technology they already have.
Adam Honig: Gotcha, that’s really interesting. So a lot of companies, I feel like they’re very eager to get new stuff and often they discard what they have. It’s a little bit like fashion, it just kind of goes bad in their eyes, you know what I mean? Oh, that’s last year’s technology, we want the new stuff. Is that a little bit of what you’re seeing?
Rebecca Wetteman: Well there is such a thing as sunk costs Adam, and sometimes you have to move to the next best thing. But it’s always best to do so, not just with a business case to justify a budget, but one that makes sure you really understand how you’re going to get the benefits you expect and what you need to do to get there.
Adam Honig: Yeah, that makes total sense. And I feel like in talking to a lot of people, often they get focused on the very upfront costs, but not on the ongoing costs of technology. And this is definitely something that sounds like you’re keyed in on as well.
Rebecca Wetteman:Yeah, I mean tech is never a set it and forget it thing. And particularly as we think about Cloud technology, the opportunities to get more value are evolving all the time. So it’s not just about deploying once, it’s about making sure users adopt effectively the first time, but then they get more out of it over time.
Adam Honig: Exactly, now let’s talk about ROI for a moment, Return on Investment. I feel like when I talk with people, a lot of them have a very good sense for what the investment is and what the cost is. But often they struggle understanding what the return is or even how to approach that. How do you advise clients in that area?
Rebecca Wetteman: Well people tend to get very numbers-focused when they think about ROI, and that’s okay. But it’s important to recognize that this is not about coming up with a perfect number of what you expect for a benefit. It’s kind of like driving a car, you can expect a certain mileage, but once you get on the road, they’re going to be a lot of different things that impact how quickly you actually get there. So whenever you’re looking at the potential ROI from a new technology project, you want to look about what that expected range is. If I’m expecting a change of productivity, for example, between 5 and 10% for people. What does that look like in terms of hours per week or hours per day saved? And what are the likely barriers to me actually getting there? So do I tend to be at the bottom of the range or the top of the range? And then how do I put those milestones in place, those road markers, if you will, to make sure that I stay on track?
Adam Honig: Gotcha. And do you have a rule of thumb in mind for what’s an acceptable range, like 5 to 10%, that’s almost double right? Is that okay?
Rebecca Wetteman: You know, it really depends on the benefit. If I’m looking at a cost saving, it’s a line item on a budget that I have today, I can have a pretty good handle on what that’s going to be. If I’m looking at something like productivity that’s more indirect or if I’m looking more broadly across the supply chain to benefits that maybe come back from suppliers, for example, there’s a lot more variability there. So I may have a bigger range.
Adam Honig: Gotcha. Now I feel like we kind of get into a little bit of a dilemma sometimes when we look at ROI in the business. What I mean by that is if we go to the CEO and we say hey, we want to do this project, it’s going to get these great returns, of course the CEO wants to hold us accountable to those returns. And sort of the bigger we make the business case, the more we set ourselves up for that kind of measurement and scrutiny. Do you ever see that with your clients?
Rebecca Wetteman: You know, I think people also tend to get overenthusiastic sometimes about overstating benefits, particularly when it comes to thinking about productivity. If we think about the CRM space, the one exception to that is generally around Salesforce automation, where the VP of sales will say, I’m going to air on the low side of what we expect so that I don’t have that target on my back. But again, I think it’s important for people to say what’s a reasonable range for us to expect, and then what are those key things that I need to think about? Like training, usability, and other factors may be completely outside of the technology that I need to address to make sure I get there.
Adam Honig: That makes total sense. So in other words, for people who are looking at ROI out there and even how to justify a project, don’t get too hung up on the one number, think of it as the range. And maybe be moderate in your expectations because you are going to be needing to be accountable for that down the road at some point.
Rebecca Wetteman: Well, and recognize too that coming from the IT side, we tend to be very binary. So that’s very different from the way a financial decision maker makes decisions where they’re looking at a potential project. There are always going to be factors that they’re not sure what those inputs or outputs are going to be. What they do is use the data to make the best decisions.
Adam Honig: For sure, and I think that’s so important in today’s environment where we have a lot of data, right? We have more data than we’ve ever had before and now you can use that data to make good predictions about what’s going to happen in the future. Not that it means it’s going to come true, it’s just like you said, a range in idea of what you expect to happen. And there are a lot of factors that people can’t control. So tell me Rebecca, a lot of our listeners are in what we call the supply chain manufacturing, wholesale distribution kind of companies, what trends are you seeing in these types of organizations?
Rebecca Wetteman: Well obviously we’ve seen a lot of changes in the past couple of years Adam, and concerns about supply chain still are important for a lot of manufacturers that we speak with, both in terms of ability to promise and ability to plan for longer development cycles, longer product innovation, and more forward-looking areas. I think the other big area that we see is around talent, understanding not just on the IT side, but broadly across the organization. How do I not just attract appropriate talent that fits with the culture of my organization, but how do I retain them, engage them, and keep them on track to be as productive as they can be?
Adam Honig: No doubt. I want to dig into the first topic a little bit because we had a guest on the show a couple of weeks ago who said that the key to their business success was building up a lot of inventory. And being a supplier who had a lot of inventory, so when other people didn’t, they were able to make inroads into a lot of new customers that way. Then we had another customer who was all about having nothing in inventory. And I feel like there used to be a consensus around the best way to operate a supply chain company, I feel like that consensus is now just completely gone.
Rebecca Wetteman: It’s been completely turned on its head. And as you think about the cost of capital, that’s going to make a lot of decisions for those changes as well. So as we look at changing interest rates, the cost of carrying all that inventory, boy I’ve got to manage that carefully as I think about the supply because that supply gets more and more expensive.
Adam Honig: Right, and then what I’ve also been reading a lot about is companies have now kind of over-ordered based upon expected demand that they’re not necessarily seeing, especially in consumer areas where trends in the fashion, if you will, can be pretty fickle. And so it’ll be interesting to see how that kind of ripples through the supply chain as the environment changes. Do you feel like from a software perspective, you’re seeing more people investing money in software to try to manage this? Or is it more kind of personnel that they’re looking at, trying to make it easier for themselves?
Rebecca Wetteman: If we talk about the overall talent picture. There are lots of interesting investments going on, particularly as we think about the hybrid work environment. How do I manage talent at a distance? How do I support collaboration and culture when everybody may not be in the office at the same time? And that’s where we’re seeing the adoption of technology, like virtual coaching, that can be not just for the top 20% of management, but for the whole organization to help bring them forward. I think we’ll see more about coaching and learning investments as a way to not just engage employees, but continue to make them more productive and support better succession planning that goes beyond the C-suite and down to other aspects of the business.
Adam Honig: Can you tell me a little bit more about this virtual coaching? I just have this image in mind of a cartoon AI thing popping up, telling people what to do during the day, but I’m sure that’s not the right way to think about it.
Rebecca Wetteman: Well it’s certainly part of it, and the ongoing coaching that obviously you guys do and we’ve talked to customers about on the Spiro app is that sort of tactical day-to-day. But in reality, a lot of organizations have historically invested in coaching one-on-one for the top-level executives. And what we found is that employees learn best when they learn from mentors. So having those mentoring-coaching relationships that scale can be important for delivering value throughout the business. And that’s where we’re seeing companies look at coaching applications that help match people with coaches, help identify objectives, help streamline the coaching process so that coaches can take on more responsibility for more coaches or mentees, and really enabling technology and AI to drive more data into the process. So rather than just having those conversations with a coach, I’m getting that ongoing update information and data about how I’m doing.
Adam Honig: Oh that’s really cool. I mean working in the AI space, I think a lot about data and models and stuff like that, but we often kind of gloss over the idea of needing to have rapport with somebody to deliver effective coaching or communication and stuff like that. And I could see how it was coming from somebody else who, with a little bit more tenure in the organization, could really make a much bigger impact than just some random cartoon avatar popping up and saying something.
Rebecca Wetteman: Well too, coaching at a distance is different, right? If I’ve never spent that much time one-on-one with a person, it’s going to take me more time to build that rapport. I think the other thing we really see in the Salesforce automation in the CRM space is how do I have the data available so when I do have those one-on-one interactions, I can spend time on talking about what matters rather than digging through numbers, trying to understand where things are going, trying to understand how one deal may be progressing or not. So with technology and with the AI piece, I get more intelligent forecasting.
Adam Honig: Right, that’s kind of the dream. I always say making more calls for the sales team won’t increase sales, but making less calls always will decrease it. And so if you can get the team out of that nonproductive time and spend more time with customers, generally good things should be happening. So I know you wrote a recent report, Rebecca, Predictions for what’s going to be coming up, and one of the sections I found really interesting was about The Battle of The Back Office. First of all, that’s a great phrase, it sounds so dramatic, sucked me in right away, but can you talk a little bit about that? What do you mean by that?
Rebecca Wetteman: You can just see the grenades being lobbed over the cube walls, right? No, that’s not actually what’s happening. What we are seeing is there are so many things that we’ve done with automation and AI that affect the front office, you know, the sales team, those folks that are out there directly interacting with customers. And there is so much data and intelligence at the back end that those primary customer-facing folks still can’t tap, that still they don’t have access to. So the average company has 23 different systems which contain customer information. Sales may have access to a few of them, service may have access to more, but there’s inevitably still a lot of swiveling going on as we look for how do we pull all that data together. So a big part of the battle for the back office is saying how do I extend those processes? How do I use things like low code, for example, to be able to pull that meaningful data out of systems and enable everyone.
Adam Honig: Yeah, that makes total sense. We have a customer who’s in the refrigerated truck business. So they get custom orders, they come in from Budweiser and people like that who need refrigerated trucks to drive things around. And what happens is occasionally the salesperson who worked with the customer will get a call from the customer and say hey, where’s my truck? And then the salesperson has to go running all around the company and try to figure out what’s going on. Is it on time? Is it late? You know, just to get back to the customer. And that’s a lot of time that can be wasted doing stuff like that. So is this the kind of information that you’re talking about, bringing it more out to the field folks?
Rebecca Wetteman: Yeah, it’s bringing that information out to the field. The same is true on the sales side and enables sales to actually service clients without necessarily escalating in the way they traditionally have. I think the other thing too is the ability to promise is a big part of sales morale and sales excuses, frankly. So the more that you can provide visibility into that supply chain, into what’s out there and what’s happening from a process perspective, the fewer excuses sales have, but also the greater opportunities they have to promise to seek out those opportunities that might manifest in some other ways.
Adam Honig: You know, sales morale, I feel like is something that we don’t talk about enough. And of course, your sales team, your service team as well, the way that they’re feeling and the way that they present themselves to your customers is so critical. It can really change the whole dynamic of a relationship. We’ve all been there when we met a salesperson who was having a bad day and we were like oh, I’m not doing anything here, like whatever, right? So yeah, I never really thought about the impact of providing the team with good insights and making them feel like they really know what’s going on to help them with morale. That’s super interesting.
Rebecca Wetteman: Well and too, sales wants to think about what is my next sale be on today. So if I’m really building a relationship with a customer, it’s not just about today’s deal, it’s about building a pipeline over time. And the more visibility I have about my ability to execute on that pipeline, the more ability I have to hand that customer off to customer service and customer success without it escalating back to me, and the more time I can spend on building my top-off.
Adam Honig: No, that totally makes sense. So for the back office, are you predicting an upgrade cycle of back office technology to deal with this? Or are you seeing more integration with existing back office systems or a mix? How do you see that happening?
Rebecca Wetteman: I think there are two key things we’re seeing, first is integration, how do I pull data out of systems that may be running almost on life support, which is fine, if it’s not broken, don’t fix it. But also looking at how do I take those industry best practices? How do I build more from a software perspective that has industry intelligence so I can make that lifting happen in the back office?
Adam Honig: I really like the idea, and we were talking about this a little bit earlier about not replacing things that are working. And I was speaking to somebody who still had an AS 400 for their ERP system and I was like wow, I haven’t heard that term in a while. I think IBM retired that whole line ten years ago and it was working fine. They were like, you know, we know how to maintain it, everything’s working fine, we’re just going to keep it, but we need the data. And that’s often the critical thing for a lot of these businesses, is how do they get the data out of these different systems?
Rebecca Wetteman: Sure, and as we think about customers who still have the memory, who went through that initial ERP deployment that was long, costly, painful, distracting, really a challenge from a culture perspective. Nobody wants to do that again for fun, right? What they do want to do is be able to innovate. We’re seeing more and more companies say how do we streamline the management of those applications that are maybe still running on an AS 400? Or how do we move them to the Cloud in a non-disruptive way so we can focus on the Edge applications that really matter. And by Edge, the ones where we’re seeing big investment would be around AI and analytics, around mobile and increasingly around supply chain. And finally, human capital, those things like talent coaching that we talked about.
Adam Honig: And by Edge applications, just tell me what that means in your terms?
Rebecca Wetteman: Sure. So those are applications that sit outside of that core backbone that’s financial and operations. So beyond the core CRM and the ERP, what am I looking at for things like talent and incentive comp, for example, which may not be in the core of the ERP system. Around supply chain planning, control towers, and then as we said on the HCM side, often around talent coaching.
Adam Honig: Gotcha, that’s really helpful. I’m not sure everybody immediately knew what an Edge application was, to me, it sounded like somebody that might be playing with the red hot chili peppers or something like that, I don’t know. Anyway, I know part of your business as well, Rebecca, is doing customer surveys and getting insights about what people really think about products that you’re using. What kind of feedback do you hear in that kind of approach?
Rebecca Wetteman: So surveys are a little bit garbage in-garbage out, right? It seems like every time you go on Twitter today, somebody is doing a survey to ask you to rate something or talk about something. It’s a very sophisticated methodology there and process. And what we find is that surveys are interesting and helpful, but beyond understanding the data, it’s kind of like ROI. Beyond understanding what the average number is, you need to understand why, and you need to understand that in context. So typically what we do is if we do a survey at all, we do it by validating either a virtual focus group or in-depth interviews with some of those folks who respond. So if I tell you a customer, on average, achieves a 41% increase in visibility, I can tell you what that range is. I can tell you who sits at the bottom and who sits at the top. And I can give the decision maker, who’s trying to understand where they sit, the example so they can see. The guy at the top sort of looks like me or the guy on the end looks closer to me.
Adam Honig: I think a lot of people, when they think about surveying, the first question that comes to mind is how many people do we need to get to respond to make it worthwhile? What’s your view on that?
Rebecca Wetteman: So statistical significance is a term that gets bandied about a lot and few people have a good handle on it. Some people say there’s this sort of magic rule, and if you’re really into statistics, yes, there are certain degrees that you want to look at. But what we find is that qualifying the survey population makes a big difference, and also being able to take that virtual focus group approach. If I’m talking to 20 people to validate a broader set of survey data, I can understand really quickly how the data clusters. Meaning how many people are closest to the average, that gives me a better sense of how big that range actually is and how valid the data is.
Adam Honig: That makes total sense. And I feel like we’re kind of living in an age of perpetual survey as you mentioned before. I was reading something recently about how the Net Promoter score, you know the thing that pops up and says hey, would you recommend X, Y or Z to a friend or a colleague? People are just so tired of that, like the data is getting really muddled just because it’s too much already. Are you seeing any of that in your research?
Rebecca Wetteman: What we’re seeing is particularly around NPS, it tends to be either self-congratulatory or self-flagellatory, but not much that the business is actually doing with it. If I’m doing a Net Promoter score, I’m always getting backward looking information. What we’re seeing much more interesting companies doing and innovating is saying “How do I mine the data about interactions that I have with customers today, without asking them do you like me or do you not like me? How do I use things like NLP and sentiment analysis to understand if a customer sounds unhappy from the email interactions, for example, they’re having with service, so I can be more proactive and understand how I keep them, and how I avoid those expenses of escalations.
Adam Honig: Yeah, so that’s super interesting too. So natural language processing (NLP), of course, is an area that Spiro focuses on. And we definitely see a lot of value about just getting the raw data of email, for example, and looking at the NLP on that, analyzing what the words are and what they mean and how they’re received by people. Because I think people are a lot truer when they’re just writing you an email than when they’re filling out a survey. There isn’t that extra step that says oh, I got to fill out a survey because I like these guys or don’t like these guys, you’re just shooting at an email. So I think I think you’re right, I think that’s a big value add in addition to the survey as well.
Rebecca Wetteman: I think too, there’s an ongoing sense to it. If I’m asking you at one point in time, maybe after I just had a very positive or very negative interaction with you, I’m going to get a very different response. Whereas if I can use the technology to understand over time, is Adam getting happier or less happy? Is he more satisfied or less satisfied with the way he’s getting value for my company, I can act on that in a much more meaningful way.
Adam Honig: You know, this is very practical advice for people Rebecca, I mean surveys have their place, but actually talking to people and validating what they say, I mean, a radical concept, I know, but still something we should think about. We have all this technology at our disposal, but still just talking to people turns out to be super important. So that’s really great advice for people. Well we talked a little bit about the human capital space, and we talked about coaching, what about, I know there’s a lot of concerns for companies in the supply chain because they have a lot of workers that are reaching retirement age. Are you seeing any technology solutions that can help with that institutional knowledge that these folks might be leaving when they leave the companies?
Rebecca Wetteman: That’s been a challenge that’s been growing, and certainly we’ve seen that explode in the past two years. There aren’t a lot of companies, frankly, that are doing it well yet. I think what we are seeing is more of how do we do that knowledge capture, and how do we do that coaching when those folks are in the business before they retire? But also, how do I think about creatively keeping them on whether it’s as a coach, as a mentor, or maybe as a part time collaborator to be able to continue to contribute that knowledge back to the business and bring those folks up along with them. That’s where the area of coaching becomes really important too because again, it’s not just planning about succession for the C-suite, it’s about planning for succession at the middle management level.
Adam Honig: I think this is a really great topic, too, one that, again, I don’t feel like I hear a lot about, talk about non-binary solutions, right? Like just because the sales people are retiring that know the customers really well, doesn’t mean you can never talk to them again. How about having them on as a coach or having them on as a part time advisor to the business? They’re probably going to be looking for something to do between rounds of golf and stuff like that anyway.
Rebecca Wetteman: It’s amazing, and what we’ve seen is that if the enabling technology is there to support that culture of knowledge transfer is something that can be a very popular option.
Adam Honig: Right, especially with the whole work from anywhere kind of situation that people are now in as well. I mean, just because you were servicing customers in Wisconsin and you moved to Florida, you can still be in touch, it’s super easy these days. Yeah, that’s great. Well Rebecca, this has been a real pleasure, I’m so pleased that you were able to join us on the podcast here. Really, there are so many great nuggets here. Looking at technology in a non binary way, taking the most out of it, understanding how to get a range of the return in the ROI and understanding how to do that. And just some really great tips on how to think about some of the technology investments that people are making. This has been super, so really thank you for joining us today.
Rebecca Wetteman: Thank you so much Adam, it’s been a lot of fun.
Adam Honig: So as a reminder for our audience, you can find every episode of Make it. Move it. Sell it. at spiro.ai/podcast. And you should really try to say that three times fast. And if you like the conversation that Rebecca and I were having today, I strongly encourage you to like or share the podcast, maybe write us a review. I don’t know Rebecca, you think that’s a good idea?
Rebecca Wetteman: Sure.
Adam Honig: So thank you everybody for tuning in and we’re looking forward to speaking to you on the next episode.