Highly Competitive - software industry insights

Industry-Focused Services Deliver Unique Value

 

I often advise my clients (B2B software vendors and professional services firms) to seriously consider well-targeted markets that require extensive expertise that will set the vendor apart. These markets might be a specific industry focus or niche services for distinct industry or business problems. Such specialized offerings provide an important way that vendors can competitively differentiate on real performance that benefits their clients. MSPs are no different in this respect, particularly as traditional IT managed services have become highly commoditized, with an overflowing field of competitors.

 

Distinctive Expertise Means Big Value for Clients and for MSPs

To provide niche or industry-specific services means developing in-depth expertise for that particular service offering, both in terms of the industry or niche and the problems that need to be solved. The MSP becomes highly proficient in understanding the details of a specific industry need - on all fronts: business; technology; processes; practices; external requirements such as compliance; and how the new services will impact client imperatives.

Hands-on expertise is essential. The MSP becomes the "go-to-guy" for certain industries or business specialties because of proven knowledge and ability. This expertise serves to market the MSP naturally through real demonstrations of subject matter mastery and problem-solving. It will require that the MSP directly participate in the world of the specialty, including attending events, user group meetings, training opportunities, and so on. Such events provide excellent access to potential clients, as well as organic marketing through articles, blog posts and news releases written about the events by other parties.

When MSPs specialize, they're able to walk in the shoes of their clients, to better understand what they are facing, and to visualize new ways to help them solve problems. The MSP now walks the walk, as well as talks the talk. Being able to speak the same language as customers and users engenders trust and opens clearer lines of communication. Hands-on expertise in specialized areas allows the MSP to know what matters to their clients and what solutions will make a difference. And their clients will quickly see that the MSP is for real.

Knowing specific industries or niche markets makes it easier to assess the needs of each customer, and to determine the best solutions. The MSP builds a knowledge bank of problems, pitfalls and best practices related to solutions for focused markets. As a result, reusability becomes a competitive advantage for the MSP, from assessing client needs and constructing bids, to basing applications and solutions on proven solution templates. MSPs become thoroughly in the know for the top industry preferences for specific software solutions and the corresponding software ecosystem.

All of this leads to opportunities for unique services that few other MSPs are able to provide.

 

Technology Services Focus for Retail Fashion Industry

New York City-based service provider eMazzanti Technologies has been actively targeting the retail fashion industry with services to improve transactional technologies, such as mobile POS systems, and services for comprehensive cyber security. eMazzanti provides extensive security services for customer and business data protection, including network security solutions and appliances, supplemented by eMazzanti monitoring and remediation services.

To deepen industry expertise, eMazzanti staff now includes experienced retail fashion professionals. eMazzanti sees greater opportunity in serving broad needs across a retail fashion business, beyond the traditional IT services of the past:

Looking to enhance clients' retail revenue growth, the company is continually assessing emerging technologies such as digital mirrors, interactive product displays and customer recognition systems for retail customers. Existing and future technologies depend on reliable and secure network design and deployment, eMazzanti's core strength.

 

Selling Value over Price

Traveling the path of niche and industry services helps smart MSPs escape endless pricing "wars" for commoditized services provided by innumerable MSPs. Value is immediately obvious to clients when focused services are available for unique needs within an industry or niche market.

All clients want top notch technology services providers, and many are on the lookout for services that have a tight fit for their specific industry or niche. Tailored services offer such clients competitive advantage for attaining business objectives. Clients know their businesses can see healthy growth when partnered with MSP firms committed to deep expertise for their clients' specific industry needs.

 

 

Image source: dev2ops.org

 

This post was brought to you by IBM for MSPs and opinions are my own. To read more on this topic, visit IBM's PivotPoint. Dedicated to providing valuable insight from industry thought leaders, PivotPoint offers expertise to help you develop, differentiate and scale your business.

 

About the author: Julie Hunt understands the overlap and convergence of many business processes and software solutions that once were thought of as "separate" – and how this impacts software Vendors and Buyers, as well as the strategies that enterprises implement for how technology supports the business and its customers. Julie shares her takes on the software industry via her blog Highly Competitiveand on Twitter: @juliebhunt For more information: Julie Hunt Consulting

 

 

Why Don’t Midsized Software Vendors Target Mid-Market Companies?

 

Many midsized software vendors adversely fumble the critical pursuit of game-changing market intelligence research and analysis that lead to strong go-to-market strategies. Continuously updated market intelligence is the keystone for understanding what software products vendors should be selling - and why; and to determine which customers and markets are the best fit for the vendor's offering now and in the future.

Midsized software vendors often lack essential experts, especially for solution and customer strategies, and strategic market intelligence. Usually these vendors don't have the resources to continuously update strategies. But just as often it's because strategic decisions aren't based on data and intelligence – they're based on "gut", previous experience or even ego. If any research and analysis are done, the work is often shallow and designed to "prove" what the vendor has already decided to do.

Vendors seem to proceed with no clear indication of how their offerings and go-to-market plans might align to a clearly defined business solution space, or to specific customer and market segments. The main focus of many software vendors is still on feature sets, instead of forging a sharp commitment to delivering authentic and useful solutions for specific industry scenarios and business problems.

Focusing on the right customers and markets simply means the difference between success and failure. There are many adverse outcomes of the failure to fully explore and understand the right target markets and customers. One serious oversight: midsized vendors often neglect a very lucrative market with lots of untapped potential -- Mid-market companies in every industry.

 

Strong Showings for Revenue and Growth

Several organizations have emerged that monitor the overall health of mid-market companies, in the U.S. and world-wide. A remarkable description of the mid-market comes from the National Center for the Middle Market:

If the Middle Market were a country, its GDP would rank it as the fourth largest economy in the world.

That kind of financial clout should capture the attention of numerous midsized software vendors. But here are additional strong stats for those who need more convincing:

National Center for the Middle Market ***

Initial research conducted by the National Center for the Middle Market has shown that the U.S. middle market is made up of almost 200,000 companies with annual revenues between $10 million and $1 billion, as of October 2011.

Employment growth for mid-market firms over the past 12 months was 3.2 percent, which added an estimated 750,000 jobs to U.S. payrolls so far in 2014. If mid-market companies deliver on projected job growth of 3.3 percent, the sector will create 59 percent of all new jobs in 2014.

 

Deloitte

Collectively mid-market generates approximately US$10 trillion of the US$30 trillion of annual gross receipts in the United States... and employ 43 million people...

 

Economist Intelligence Unit

In Japan, for example, the middle market accounts for a small proportion of Japan's total enterprises – 2.1 percent – but employs more than a quarter of total employment and generates about one-third of total revenues. Yet, like its counterpart in other countries, it receives comparatively little attention – arguably far less than it deserves given the middle market employs a quarter of the workforce, earns around a third of gross revenues and has demonstrated remarkable resilience amid the difficult economic conditions of recent years.

 

Gartner

Gartner predicts SMB IT spending this year will reach $901 billion, up from $868 billion last year, with estimates that spending will cross the $1 trillion mark by 2015.

 

The Mid-Market Opportunity for Midsized Software Vendors

Mid-market companies need software solutions that are sophisticated but not costly – and easy to implement and maintain. These companies need vendors who truly understand and support their business objectives for technology, and who provide right-fit solutions. Midsized companies embrace technologies as competitive differentiators and as a strategic means to sustain and grow their businesses. Midsized organizations need the right technology solutions to help them innovate their business offerings and to evolve with market changes to meet the needs of their customers.

And that's where midsized software vendors come in. Companies in the mid-market are interested in all categories of software solutions, from operational excellence to improving customer relationships. So there is limitless opportunity for any kind of midsized software vendor – if they make the decision to purposefully target midmarket customers.

A 2014 Deloitte survey focused on how midsized companies utilize technology both for infrastructure needs and for competitive fuel. The results resoundingly demonstrate that there is a tremendous opportunity for midsized B2B software vendors to provide solutions to their fellow mid-market organizations:

Technology is becoming a strategic imperative. The survey findings confirm that mid-market companies' view of technology is increasingly enthusiastic. Forty-one percent of respondents say their leadership views technology as a "critical differentiator and key to growth," while another 38% view it as "a strategic investment." Fewer organizations now view technology as simply "necessary." As a result, more companies are using technology as a means to increase the top and bottom lines and to meet the needs of both the workforce and the customer. Meanwhile, more than half the respondents report plans for increased spending on technology.

Many companies are embracing change and expressing a healthy appetite for innovation. Thirty-six percent of respondents are dedicating at least half of their IT budgets to implementation of new technology versus maintenance of existing systems.

Technology may become a great equalizer for mid-market companies. Cloud-based solutions, data analytics and business intelligence solutions continue to provide "large corporation solutions" to mid-market enterprises in terms of the operational capabilities, overall productivity and competitive insights.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Deloitte

 

Two Kinds of Mismatched Vendors

All too often, midsized B2B software vendors think that the best markets are in the large enterprise. These vendors are lured by big money and big deals – without considering the real costs of what it takes to thrive in those markets – as a smaller vendor. Many midsized vendors do not survive forays into the turf of larger software vendors.

The high-end enterprise is a very tough place for smaller software vendors. The field of potential customers is very limited, so competition is fierce. Larger software vendors already have established extensive relationships with these enterprises. Sales cycles are longer, which introduces more chances for failure to close deals – and for the squandering of finite resources for the midsized vendor. Even when a smaller vendor wins an initial deal with a large enterprise company, it is usually displaced by a larger vendor very quickly. With much deeper pockets, the larger vendor can easily offer steep discounts and free benefits.

Conversely, when large enterprise software vendors target the mid-market, these high end vendors rarely go very deep into the overall mid-market segment (and seldom into "small business" territory). For the most part, large enterprise software vendors still don't really know how to support mid-market business needs or provide the right-fit solutions. Even though they claim otherwise, many large software vendors miss the mark simply because they do superficial work related to understanding mid-market organizations. In reality, larger software vendors tend to treat the mid-market as one market, failing to see how different the many tiers of the mid-market are.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Forrester Research

 

 

Know Your Customers, Find Success

A 2013 Forrester survey of executive level buyers revealed troublesome insight: the sales teams contacting these buyers usually had very poor understanding of the needs and problems of the buyer or even the buyer's role in the organization. Making things worse, sales teams met with these buyers with very little knowledge not only of the buyer's specific business but the buyer's general industry. Sales teams are meeting with important buyers without intelligent answers to customer questions, or even appropriate case studies to show product relevance to the buyer organization problems and needs. From my experience, this is especially true of sales teams for software vendors.

Many midsized software vendors are missing a huge opportunity to purposefully target midsized and smaller companies for their products and sales efforts. These vendors can find success by understanding how their products relate to mid-market customer needs, especially for specific solution scenarios. Success also comes to vendors that know how to properly serve midsized companies during the entire customer lifecycle. Too often software solutions are designed and developed with limited customer and target industry knowledge.

The decision for midsized software vendors to sell to mid-market companies should be a no-brainer. Midsized vendors are part of the mid-market – they can draw on their own buyer experiences for the software they purchase for their companies. There is also a healthy parity in relationships with fellow mid-market companies – a parity that is rarely exploited well by midsized vendors. Vendors as partners with their customers achieve success by helping their midmarket customers attain their business objectives. But midsized vendors can only do this if they understand how mid-market organizations buy and use software solutions .

 

Finding the Right Markets – Providing the Right Solutions

It's critical for midsized software vendors to fully understand the right markets for their solutions. But midsized software vendors often don't have the experienced resources needed to develop competitive and success-building strategies for product direction, customer targeting and robust go-to-market approaches.

Midsized vendors greatly benefit from a consultant who stands outside the company and thoroughly assesses the current vendor state, and then explores potential new directions that help the vendor stand out from the herd. The right independent consultant has the savvy and expertise to help midsized software vendors better identify and serve a strong target market and distinct market segments, as well as provide rich and authentic customer experiences. The consultant looks for innovative business models, new or underserved markets, and competitive changes to how the vendor does business to find a better road to growth, improved revenue and longevity.

Unfortunately midsized vendors many times turn to the large analyst firms for advice. Just as large enterprise software vendors are ill prepared to serve mid-market companies, most analyst firms don't understand selling software either as a midsized or smaller vendor, or targeting midsized or smaller companies as customers for software

Here are some of the jobs that I do to help your success:

• Fully understand target customer markets by segment, including needs and business objectives
• Identify who should use your solution and why – explore the problems your solution can address
• Research and select one or two industries you'd like to work with; then select segments in the industry that work well for your solutions – for now and in the future
• Analyze and build out specific industry scenario solutions that really work – focus on real target customers and real customer problems / needs
• Monitor customers who are using the scenario solutions: fine-tune, improve, evolve into other focused solutions
• Assess the success of the above to make decisions about new go-to-market strategies that will add growth to the company
• Truly support customers throughout the lifecycle of the customer experience – repeat customer business is the most profitable

 

It would be my pleasure to be your partner in making your software company more successful, with current and future solution strategies. I'll help you re-invent your software company: from business model innovation to new services and solutions, more targeted markets, true customer focus, and effective go-to-market strategies. More information – What I Do for Vendors and Buyers

 

*** The National Center for the Middle Market is a collaboration between The Ohio State University Fisher College of Business and GE Capital

 

Drucker graphic source: zenworkz.com

 

Related Links

Why Midsized Software Vendors Need the Guidance of A Generalist Who'sA Specialist

Meeting the Business Technology Needs of Midsized Companies

'Tech Savvy' for Midsized Companies Means 'Customer Savvy'

B2B Software Strategies: Startups, Starting from Scratch, Re-Inventing

B2B WEM / WCM Software Vendors Targeting Mid-Market customers: stay where you are!

Customer Buying Criteria - Applying customer & competitive intelligence to selling tools leads to strategic internal benefits

Three Journeys: Lifecycles of Enterprise Software Buyers & End Users

Symbiosis: Customer Experience and Business Process

Strategies from Top to Bottom - Content Marketing for B2B Software Vendors

The Customer Journey: Content Marketing for B2B Software Buyers

Selling Software Solutions to SMB / Mid-Market Companies – Who and How To Target

The Irrelevance of Porter's Five Forces for the B2B Software Industry

SMB / Mid-Market B2B Software vendors - Findability + web presence + social: attracting the "customer as buyer"

 

About the author: Julie is an independent consultant and industry analyst for B2B software solutions, providing services to vendors to improve strategies for customers and target markets, products and solutions, and future direction. Julie has expertise in several solution spaces including: data integration and data quality; analytics and BI; business process, workflow and collaboration; digital marketing, WCM and social media; and the pivotal importance of user and customer experiences. Julie shares her takes on the software industry via her blog Highly Competitiveand on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Strategies for B2B Software Solutions: Working from the Customer Perspective

Meeting the Business Technology Needs of Midsized Companies

 

Current technology trends are important for all organizations. Most midsized companies have these technologies at the top of their lists: Mobile, Analytics, Cloud, and Security. And each year many midsized organizations dedicate more budget for technology as a strategic investment, as Deloitte noted in a recent study:

 

                                                                                        

Source: Deloitte

 

Midsized organizations gain competitive advantage not just from the technology itself but through the use of third party services that help organizations do more with technology purchases and their current organizational structures. Often services firms help these companies understand faster and implement better the technologies that can set midmarket companies apart from their competitors.

 

Obstacles to Taking Full Advantage of Technology

Of course, midsized organizations have challenges that block the way to fully capitalizing on new technologies. The predominant obstacle comes from a lack of the right IT people with the right skills, since many midsized organizations have constrained IT resources. Technology vendors that want to successfully sell to midmarket companies have to ensure that their solutions require as few IT resources as possible, to get up and running. For this reason midsized organizations are turning more and more to cloud / SaaS services.

Unfortunately technology vendors themselves add obstacles that make it difficult for midsized companies to connect to the right technologies. All too often these vendors and their sales and products teams repeatedly fail to:

• Explore the goals and needs of each customer organization
• Understand the industry and the specific business of a midsized company
• Make sure discussions are realistic for the midmarket
• Clarify overall business impact both for outcomes and for organizational situations
• Connect products and services offered to what they will accomplish for a midsized company

The midmarket is not one big blob of companies, but is comprised of multiple diverse tiers from the high end to the low end. Technology vendors must fully understand the customer perspective for each tier when developing products, and then for how they market and sell them -- if they want to acquire and retain midsized companies. To further attract and keep midmarket customers, vendors should be easy to work with, technology solutions should provide excellent usability and value, and pricing should be realistic for midsized organizations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Julie Hunt Consulting

 

 

Why the Right Technology Investments Matter

Midsized organizations have to put serious thought into their technology purchases and are best served by developing strategies around how these purchases and their subsequent use will help improve the performance of the company. Strategies should also focus on how budget cycles are handled. With constant and rapid changes in technology, midsized companies can't operate solely on an annual basis. Budget cycles are more functional on a semi-annual or quarterly basis, to keep pace with continuous business changes and market volatility.

Successful midsized organizations usually focus investments on the technologies and practices that most benefit their customers – larger enterprises could learn a lot from these organizations.

 

 

This post was brought to you by IBM for Midsize Business and opinions are my own. To read more on this topic, visit  IBM's Midsize Insider. Dedicated to providing businesses with expertise, solutions and tools that are specific to small and midsized companies, the Midsize Business program provides businesses with the materials and knowledge they need to become engines of a smarter planet.

 

 

About the author: Julie Hunt understands the overlap and convergence of many business processes and software solutions that once were thought of as "separate" – and how this impacts software Vendors and Buyers, as well as the strategies that enterprises implement for how technology supports the business and its customers. Julie shares her takes on the software industry via her blog Highly Competitiveand on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Strategies for B2B Software Solutions: Working from the Customer Perspective

 

Customer Journeys Trump the Traditional Sales Cycle

                                Originally published on CMSWire

 

While pointless debate continues in organizations as to who "owns" the customer experience (the customer of course!), the responsibility for nurturing and shepherding the continuous customer experience belongs to all teams that impact customers. At the core, much of the work should be accomplished by strong, continuously evolving collaborations between marketing and sales. Unfortunately in many companies there are still ridiculous and harmful walls between sales and marketing – and a lot of political nonsense, mainly tied to the 'blame game' when forecasts aren't met and deals aren't closed.

In reality marketing and sales have intertwined roles for engendering positive outcomes from customer journeys, whether they realize it or not. But all too often the efforts of these roles are disjointed. Both groups should work together to serve customers in every sense. Sales and marketing teams already have highly complementary activities when it comes to customers – the effectiveness of these activities is amplified when these two teams deliberately work together.

To connect authentically to what customers need and want, customer journeys trump the traditional sales cycle. The sales cycle has been an inside-out process, tied primarily to sales goals and operations. The customer lifecycle with a company comprises an ongoing journey before, during and after individual sales events. Sales and marketing teams need to be part of continuous customer engagement for the entire journey. Persistent nurturing of customer experiences also plays an important role in customer retention and advocacy, and sales has a responsibility here.

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Gary Magnone

 

 

The Customer Journey: Sketching Potential Experiences

There are organizations that still think that they can "design" customer experiences or regulate customer behavior. That's not ever going to happen, and it's a waste of time. The journey - the experiences - always belong to the customer, based on customer decisions. Many customer journeys are complex and erratic. Customer behavior can be unpredictable – journeys take twists and turns due to external influences and events beyond the organization. For one company and its products, there can be multiple customer / buyer journeys – just as there can be multiple customer categories and segments. It all depends on the products, how they are sold, the targets, and how well a company wants to interact with customers.

Customer journey square pegs cannot be hammered into company-desired round holes to fit inward-focused business processes. This is especially true for sales cycles or processes that only care about how a sales team wants to function – without any connection to how customers want to buy products and services. But organizations can design and orchestrate inspired and comprehensive support for customers across all internal functions and interaction channels anywhere. They can make sure that customers encounter consistent experiences anytime and that customers get what they need at any point in the journey.

Deep and broad customer understanding is necessary to: map customer journeys from customer perspectives; segment customers realistically; and comprehend customer needs and wants. Continuous customer intelligence is invaluable for nurturing better customer interactions that will make it easy for customers to buy from a company – and want to come back for more. Many current marketing processes provide what the sales team and others can put to good work: collections of customer action / transaction data, and the results of various analytics such as behavioral, social media and marketing automation.

Organizations also need to do a much better job of constructing integrated customer strategies at all levels, and should designate customer insight as a strategic core capability for the entire organization. Many companies still fall short on customer strategies, including specific customer experience strategic practices, as a recent Forrester study shows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Forrester Research

 

 

Aligning Sales Functions with the Customer Journey

Far too often organizations fail to:

• Understand customer journeys at all
• Connect sales process to customer journeys and to what marketing is doing to improve and nurture customer experiences
• Build content marketing approaches that support how the customer wants to buy and interact – and then interrelate sales process to these approaches

Too many organizations still only think in terms of the traditional sales cycle when considering sales interactions with customers – frequently with revenue as the main goal. There is little acknowledgement of what the customer needs or how the customer wants to do business. Of course revenue matters. But when the main focus of sales efforts shifts to the customer's journey, and the goal is positive customer experiences that can lead to purchases, revenue follows. When revenue is the main focus, the customer seems to disappear along with potential sales.

The customer journey at its core is about people learning about products, finding out how to buy, deciding if they want to buy, then buying or not. The right content plays a key role for many steps in the journey. The customer journey can also include: coming back multiple times, getting post-sales support, recommending products to friends and colleagues, "keeping in touch", and growing a relationship. So sales must be very much a part of all of this, especially in a world where many buyers may be halfway through (or more) their buying journeys before considering talking to sales.

 

 

 

                                            

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: Forrester Research

 

 

 

Content Approaches that Serve Customers, Marketing and Sales

First and foremost content marketing must provide high quality content that potential customers want and need at different points of the customer journey. And that same content can align well with the needs of sales teams. But this will happen only if key elements of sales processes are mapped appropriately to the customer journey. The continuous exploration of customers and what they value throughout the customer journey points the way to the content that will deliver authentic value to customers and help to build trust in the vendor organization, particularly sales.

Sales teams want to take advantage of the same customer intelligence that greatly improves content, especially for targeted, highly personalized messages and information sharing. Intelligence delivered by behavioral analytics, marketing automation, and other customer-focused processes have parallel purposes to help both marketing and sales better engage and serve customers. And for content marketing to deliver timely and relevant information from the customer perspective, continuously updated customer intelligence is critical.

Content that answers customer questions about the business problems they face, or addresses their interests in certain types of products and services, is not only the right content for effective content marketing but also the right content for sales teams. Both sales and marketing will better engage customers with content that demonstrates a deep understanding of the customer's business, particularly when that content explores how to solve problems, improve operations or expand business reach. Content that pushes the current customer mindset while teaching new ideas for the business is highly effective.

Many customer journeys begin well in advance of an active search for solutions. Potential customers are often more receptive to exploring new thinking long before they have defined a problem or need. Content marketing opens the door to planting ideas in the back of customer minds, regarding potential business issues and opportunities, and new ways to handle them. Content that addresses topics of interest to specific customer segments has the strong potential to deliver unique value and increase meaningful engagement.

In many companies, sales teams don't put much time into current customers – until they want to sell them something new. Content marketing is a means to keep sales teams in touch with customers continuously after the sale, without having an overt ax to grind. Sales teams can make use of quality content to interact with customers and find out real information about their ever-changing needs and desires. The right content can be a great conversation starter – as long as sales teams sit back and listen to what customers have to say.

 

The Engaged Customer is the Glue of Marketing and Sales Success

It could be said that everyone in a company is in sales and marketing. But the better notion is that everyone is in the business of improving customer experiences to make it easier for customers to purchase and make use of products and services. Personalizing the journey before, during and after the sale needs the involvement of all levels of the organization, driven by a hierarchy of customer-focused strategies.

As with responsive marketing approaches, sales teams must abandon one-size-fits-all "sales cycles" and personalize interactions with prospects using continuously updated customer insight and sophisticated content marketing approaches. By truly interacting with customers throughout the customer lifecycle, sales teams should have a better understanding of when a customer is ready to purchase and what it will take to help them make the buying decision.

 

About the author: Julie is an independent consultant and industry analyst for B2B software solutions, providing services to vendors to improve strategies for customers and target markets, products and solutions, and future direction. Julie has expertise in several solution spaces including: data integration and data quality; analytics and BI; business process, workflow and collaboration; digital marketing, WCM and social media; and the pivotal importance of user and customer experiences. Julie shares her takes on the software industry via her blog Highly Competitiveand on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Strategies for B2B Software Solutions: Working from the Customer Perspective

 

Why Midsized Software Vendors Need the Guidance of A Generalist Who’s A Specialist

 

I love the software industry, particularly the continuous change and innovation, the unexpected twists and turns, that lead to new trajectories. I've worked in this industry for quite a while, starting off as a developer in the IT group at Texas Instruments. Over the years, I've had the pleasure to take on a variety of roles, all of which has given me a unique perspective when looking at technology and how it's used by businesses.

The world has been turned upside down for most software companies: increased and unexpected competition, uncertain global economy, customers constantly morphing, volatile and disruptive solution markets, customer-driven sales, and constant technological change. The strategic capabilities to effectively differentiate and position a software vendor are in constant flux.

Often software vendors need outside advisors and strategists to help them take on new perspectives, call out current wrong turns, and put together new competitive direction – with guidance for how to make it all happen. An outside consultant brings the advantage of not being embroiled in company politics, "drunk" on the company kool-aid, or blindly enamored of the company technology.

To truly make a difference for midsized software companies, an outside consultant should be first of all a Generalist, to pull together the optimal end objectives, and then a Specialist, to understand how to get there. The generalist meets the challenge of connecting the right dots across many domains to construct a valuable new 'big picture' of possibilities. The specialist makes sure that strategies are rooted in reality for a particular software vendor and its customers, and understands logistical issues that could impact execution.

 

'Master of Many Trades': The New Generalist

It's tempting to label today's generalist as "jack of all trades, master of none". But this clichéd phrase doesn't come close to the strengths embodied by the category-bending generalist. My generalist strengths draw on the mastery that I have in many areas – all of which come into play for upping the game for my clients. Generalists help companies do a better job of meeting customer needs, developing useful and forward-looking products, and going to market with the right mindset by understanding how these different elements have to work together to achieve success.

Generalists are driven by an insatiable curiosity: we quickly understand new ideas and concepts, continuously consume information, and usually go after research and analysis in hyper-drive. The generalist's broad diversity of perspective and experience is key to achieving innovative and creative thinking. A wide variety of knowledge combined with intelligent questioning of the status quo open new ways of seeing and doing things. As a generalist I'm wired to provide strategic context for my client projects, deliver the key points, and lay out clear guidance for actions to take and why.

The means to solve large problems and create the basis for new value usually run across multiple disciplines, lines of business, and even industries.Innovative thinking comes from connecting concepts, technologies, practices in ways not previously envisioned – with components often coming from outside the vendor's current solution domain and comfort zone. Innovation results from associative thinking or idea mashups:connecting known but frequently disparate concepts or constructs to create something new that can take companies in advantageous directions on less-traveled paths.

 

And Then There's the Specialist in Me

It's very important to develop good strategies. But it's also important to help software vendors with the execution of those strategies, with high level planning based on the realities that exist for a particular company. To give my clients the innovative ideas and strategies that will work for them and their customers, I draw on my specialist background to provide a pointed focus on how software should be developed, marketed and sold for a particular purpose that will solve real customer problems.

The specialist in me comes from:

• Hands on work in multiple software solution domains
• Different roles: technical, customer-facing, go-to-market
• IT team experience
• Entrepreneurial business experience
• Detail-oriented analytical skills (analytical abilities relate both to specialists and generalists)
• Creative bent
• Advanced communications proficiency
• Customer interactions of many kinds -- related to software solutions, specific industries and solving business problems

 

Devising Strategies for B2B Software Companies is Multi-Layered

Software solution spaces started off as silos. But it's no longer possible for software technologies to exist in a vacuum within any company. Enterprises need better integrated systems and processes. Over recent years, solutions have developed more overlap and convergence with one another. Software vendors had better understand this new playing field, as well as the endless number of new innovations for different kinds of solutions and how they are delivered to customers. The convergence of software solutions means competition can come from any direction. It also means most solution spaces are commoditized.

Software vendors and buyers alike need strategies and expert guidance to optimize how they support today's integrated enterprises: how different software applications fit together, how to evolve practices and processes for users to best take advantage of new technologies – even how to evolve cultural changes for the internal enterprise. Changes in how enterprises function affect software vendors as much as buyers.

Readers of my writing here in my blog and other publications may wonder what I do professionally, since I cover a wide variety of business technology topics. To provide real and actionable advice on strategies, I have to understand the many layers of creating, marketing, selling, and ultimately using B2B software solutions. I bring a great deal of value to the work I do for my clients because of what I know and what I have experienced from real world implementations of various software solutions and working with buyers and users.

I constantly keep tabs on:

• Specialized knowledge of many customer industries, to understand how technology makes a difference for these industries and customers
• Multidimensional knowledge of the Customer and the customer experience: how and why customers research, buy, use software solutions
• What vendors need to do to offer the solutions and experiences that best benefit their customers
• Optimal target markets and customers for various B2B software vendors
• Deep knowledge of many software solution spaces and how they fit together for most companies
• Focused insight that plays well for midsized and smaller vendors
• Activities of the overall array of B2B software vendors

 

Strong Authentic Customer Focus is Everything

Your customers are your company – period. Whether your company sells software or your company uses software, your main strategic goal should be Successful Customers. To focus on what customers need, the people of the enterprise and their technologies have to work well together. The customer-focused enterprise can achieve growth and competitiveness -- by delivering what their customers want and need, for now and the future.

But software vendors continue to struggle with prioritizing the Customer over their business-as-usual, ingrained product and self-focused strategies. I provide the guidance and expertise to help vendors look at technology solutions from customer perspectives, and build connections from their software solutions to the problems customers want to solve.

 

Why You Need Help from the Generalist and Specialist That I Am

If you're reading this article, it's likely that you work in the software industry. You may already realize that software vendors often put too much focus on technologies and features, and fail to connect with the right potential customers to meet their needs. Vendors must transform product and go-to-market strategies to focus on how their solutions help their customers improve their businesses, meet critical objectives, and work more effectively. 

Business growth strategies start with customer insights. Customers are changing, very quickly – as are solution markets. Vendors must keep up. Software companies need to get better at creating and growing the right solutions, that work they way users work. Realistic competitive differentiation comes from meeting the needs of the right target markets and customers with high quality products and services, and from making a commitment to outstanding customer experiences for every interaction.       

It would be my pleasure to be your partner in making your software company more successful, with current and future solution strategies. I'll help you re-invent your software company: from business model innovation to new services and solutions, more targeted markets, true customer focus, and effective go-to-market strategies. More information – What I Do for Vendors and Buyers

 

 

Image source: creativegeneralist.com

 

 

Related Links

B2B Software Strategies: Startups, Starting from Scratch, Re-Inventing

Internal Disruption–No Longer Business As Usual

Customer Buying Criteria - Applying customer & competitive intelligence to selling tools leads to strategic internal benefits

Three Journeys: Lifecycles of Enterprise Software Buyers & End Users

Symbiosis: Customer Experience and Business Process

Strategies from Top to Bottom - Content Marketing for B2B Software Vendors

The Customer Journey: Content Marketing for B2B Software Buyers

Selling Software Solutions to SMB / Mid-Market Companies – Who and How To Target

The Irrelevance of Porter's Five Forces for the B2B Software Industry

 

 

About the author: Julie is an independent consultant and industry analyst for B2B software solutions, providing services to vendors to improve strategies for customers and target markets, products and solutions, and future direction. Julie has expertise in several solution spaces including: data integration and data quality; analytics and BI; business process, workflow and collaboration; digital marketing, WCM and social media; and the pivotal importance of user and customer experiences. Julie shares her takes on the software industry via her blog Highly Competitiveand on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Strategies for B2B Software Solutions: Working from the Customer Perspective

 

 

B2B Software Strategies: Startups, Starting from Scratch, Re-Inventing

 

I write a lot about different B2B software solutions and try to provide lots to "chew on" about the good and not-so-good aspects of software offerings in different solution spaces. I constantly look at new thinking and work out my own thoughts and recommendations. Beyond the solutions themselves, I also explore other aspects of providing software solutions: new directions, challenges, internal and external factors, and especially a strong focus on the Customer. Making software that benefits the Customer means creating solutions that work the way customers / users work, adopting more effective customer-focused approaches for marketing and selling, and changing from being tech-centric to solving real customer problems. I suppose I want to help software vendors go into "hype rehab", to be able to do things for real, particularly from the customer perspective.

What I write comes from my direct experience working with software vendors, customers and end users. How I gain that experience comes from what I do for a living: consulting with and advising all kinds of B2B software vendors on product strategy, better sales and go-to-market strategies, the right target markets and customer segments. I want to help vendors create software that really benefits customers and end users, and performs well (you may say I'm a dreamer, but I'm not the only one…).

Over the years I've worked with many different kinds of customers, both for software solutions that I've developed and for packaged solutions from vendors. I respect customers and end users – I also know that customers aren't always right, and don't always have clear motives when it comes to acquiring software. As a solo consultant, I work mostly with startups, and small and mid-sized vendors. I like the mindset of these not-so-large companies and the energy most of them bring to creating software -- but not all of these companies fully understand how to function well as a software vendor that meets customer needs. Just like large software vendors, these companies can get lost in the technology and lose sight of what really matters – if you're in the business of selling software.

    

                                                                                                                         Source: watirmelon.com  

 

 

Software Vendor Strategy

Software technology vendors are challenged more than ever to evolve if they are to survive – this may be even more the case for smaller vendors. Larger traditional software vendors are being challenged by SaaS and cloud offerings, and by customer dissatisfaction with bloated, overpriced monolithic software stacks. Evolutionary pressures are also hitting the software startup world, although many regional start-up communities aren't prepared to recognize such pressures. New ways are emerging for creating new companies that don't adhere to the "old school" startup way of thinking.

Another segment of the software industry that is on the rise relates to companies that re-invent themselves. As companies re-invent themselves, especially smaller vendors, benefits can come from thinking somewhat like a startup, especially when creating a new vision for the company. But these re-inventing companies can also think too much from the startup perspective and forget that they are in a different category with different advantages and challenges.

There are a lot of small software companies that are starting from scratch. But these companies may not exactly fit the "classic" definition of a startup either. Certain "old school" VCs and entrepreneurs only consider a startup to be a company intended for rapid growth through highly disruptive services or solutions intended for a large market, and frequently, to be sold as soon as possible. With today's economic volatility this approach has less effectiveness. The approach is also riddled with subjectivity and ambiguity, and gives rise to endless - and usually pointless - debates about whether certain companies are truly startups.

Whether reinventing or starting from scratch, this question needs to be asked: are your efforts meant to result in flipping the basic company as soon as possible, or do you want to grow into something more? If there are investors, they may push for a quick sale so they can reap their rewards sooner rather than later. So the company should decide early on if the core strategy includes evolution into a mature company. That decision impacts: who should be selected as backers, how to handle employees, who the real target markets and customers are, and many other critical aspects of running a software company.

Focus on Customer for Real Competitive Differentiation

It still eludes many companies (startups, starting from scratch, re-inventing, or well-established) that the "competitive" factors that matter most when it comes to winning and keeping customers center on: solving customer problems; providing ease-of-use for the tasks to be done; creating software that works the way customers work; and ending up with a product that is cost-effective to buy and maintain. A significant competitive edge can come from delivering on the promise: our software will help you and your business in real ways (and won't be a pain to use).

I worked recently with two smaller software vendors: one in the process of re-inventing itself, and one that has been "starting from scratch"…for three years. For this article, it doesn't matter what kind of software solutions they offer, although both are working on SaaS offerings. What matters is how they are going about building their businesses, and whether what they are doing will be effective or not. The two vendors are taking very different approaches to how they are going to market and how they consider the Customer in the equation. It's not a question of which approach is "better" – it's a question of figuring out strategies that will work, and why a lack of strategy usually goes badly.

 

Re-Inventing A Software Company – Lots of Hard Work

My client, the re-inventing vendor, is making a big and very deliberate transition from providing on-premises software to building a fresh SaaS version that truly takes advantage of the SaaS solution delivery model and the notion that software should work the way customers work. A lot of the work that we have done together centers on the fact that going SaaS will transform almost every aspect of the business, from business model to pricing to marketing and sales – and particularly how customers interact with the software and the company.

These following points are at the heart of how my client is going forward:

Necessity: The Mother of Reinvention

A majority of respondents (53 percent) say they have reinvented their business "to stay afloat or competitive." This strategy is reinforced in the current competitive climate that 38 percent of respondents describe as "extremely intense."

"Small-business owners are especially adept at reinvention – whether because of obstacles or new visions for growth," Veltre said. "Change is never easy, but neither is starting and running a business. We see our small-business clients embracing change and reinventing themselves to secure a rewarding future."

As part of the reinvention process, small-business owners say they focused on overhauling the products or services they offered (47 percent).

If small-business owners aren't reinventing their business, they stay sharp and evolve to keep up with the competition. The following steps were cited as ways they kept business thriving:  

88 percent kept updated and knowledgeable about their field

70 percent increased face time with customers

 

It has been exciting to see a company that really understands its original software business now embrace the SaaS platform and build an offering that takes advantage of what works best for customer-focused SaaS, particularly around clean design and usability from the end user perspective. It's also real work to alter management mindsets and help the company realize that it is leaping into a whole new world. The change to SaaS will likely lead this company to increased innovation in what it does for customers.

There seem to be a lot of articles about how traditional vendors often fail at creating SaaS offerings but these articles are generally talking about large companies who obviously come with a lot baggage. Smaller vendors are usually more agile and open to new thinking. They are much more in touch with their customers, and have the real-world experience to avoid certain pitfalls and to hard-earned credibility to a new SaaS solutions platform

To a certain extent, having a startup mindset is useful, especially when taking on a new solution delivery model. The mindset is necessary to be strongly open to change and some very new concepts of doing business. But the re-inventing company must keep in mind that it is not starting over. The company needs to see that many years of experience, lessons learned and a diverse customer base are invaluable, and catapults the re-inventing well beyond a "startup".

This re-inventing company is hungry for real intelligence and insight to be able to formulate good strategies, to understand the new SaaS paradigm, to know how to market to customers, and who those new customers may be. Getting a good feel for the vendor landscape is also essential. For SaaS, web presence and pull marketing escalate in importance; well-informed and well-crafted strategies and tactical implementations for marketing and sales must be based on the right intelligence.

Brand identity is a focus for the re-inventing company, not for competing against larger vendors, but to make clear to customers what the company does, that it does it well and can be counted on as a partner. This company is crafting core concepts around the customer and end user. As to lessons learned that are being applied to the SaaS offering: which current solutions have done well; what customers have indicated they liked and didn't like; unexpected use cases from customer implementations that open doors to niche solutions.

This company has a real commitment to customers and solving problems. This company is learning how to see from the customer perspective. As a step in that direction, they are revamping the current website not only to accommodate a SaaS offering, but to make sure that the website responds to the way customers want to navigate it.

 

"Starting From Scratch" Gets Off on the Wrong Foot – and Stays There

Unfortunately the client that started from scratch is not an inspirational story, but more a cautionary tale. Both from my brief advisory tenure and what I continue to know about the company, this is a company with no focus and no strategy, and apparently no concern that these two essential ingredients are missing from the plan (if there is a plan). "Starting from scratch" is entering its fourth year of existence.

What's the problem? "Starting from scratch" seems to be a vanity creation of the founder, with decisions running on his ego. The founder had previous experience with starting and growing a couple of other small software companies, and has elevated himself to "I can do no wrong". Generally rude and self-involved whether dealing with employees or outside consultants, this founder is a control freak. The final fatal flaws: changing direction constantly, no cohesive vision, and no ability to stick with a solution direction long enough to develop it. These are not pivots – there's simply not enough structure in place to pivot from. More like meanderings.

On face value there is a good idea for the SaaS offering. But it has never been given enough time for definitive development and execution. In fact, very little has been built. A rather large list of vaporware inhabits the corporate website, with a hidden "we will build it if they come" agenda. The company basically waits for a single customer request something that will then be developed as the next app. The flaw of this approach - creating an app for a market of one - should be obvious. Beyond that, the "model" doesn't scale. All the company has is a series of one-off custom apps, just like a developer for hire would do. Brief flights responding to "whim" do not add up to a long term strategy.

Remember, this is a SaaS offering. But there is very little available for subscription. Kind of defeats the purpose. There is no process of testing apps with potential customers for feedback, since there are no apps to test. There is little research on target markets, customer roles and problems to be solved – simply because the founder already "knows" what should be done. Yep.

Marketing efforts are of course scattershot, following the lead of the founder. For example, efforts related to social media are not part of an overall marketing strategy, but are random self-promoting blasts that totally miss the opportunity for interaction on social media. There's no on-going plan, no engagement with potential customers, little creation of useful or high quality content. Just a lot of disjointed activity with no overriding purpose.

With no brand identity or real goals for the development of the offering, this company is playing at business. The founder has failed to define a real solution space, target markets/customers, go-to-market strategy, a business model – and then stick to them long enough to get anything done. For "starting from scratch", a real customer focus is non-existent as far as defining target markets and problems to solve, and then providing a well-developed SaaS offering to do it. Surprisingly this company has VC backers. These backers are in the game because of the founder's previous companies.

There wasn't much that I could do for this company simply because they don't understand what a mess they are in. They had no interest in comprehensive market and customer intelligence, so I simply completed the requested tactical project for them – the end.

 

Devil's Advocate and Tough Love

While my consulting practice officially involves terms like market intelligence, future trends and customer strategy, I frequently think the better phrase is "Devil's Advocate". Most companies, whether re-invented, starting from scratch or a "classic" startup, need a devil's advocate. Partly to counteract all that kool aid drinking so many software companies tend to do. The devil's advocate is needed to dish out a certain amount of 'tough love' to help companies find and navigate a good path for growth and success.

Unfortunately many new companies, or re-inventing ones, rarely budget for in-depth assessments for determining the right strategies for products, go-to-market, customers, and vendor landscapes. These companies need outside perspectives to determine if the company is truly solving customer problems, providing a product that customers want to use, or even for understanding whether the software has value for any customers.

A devil's advocate asks all of the "so what" questions: does the solution matter, is the offering really a solution, who would buy it and why. The devil's advocate helps companies keep an eye on the future, understand the present, and keep looking in the rear view mirror to catch a glimpse of which unexpected vendor may be their next main competitor. B2B software vendors have specialized risks and competitive factors. All too often these vendors are too rooted in the day-to-day to look in any other direction, no matter what stage of development the company is in. Keeping pace with change is critical; change will be constant and sometimes brutal.

Those companies who ignore the coaching of the Devil's Advocate, or don't think they need one, many times achieve these negative distinctions:

• Lack of real innovation – more "me too" masquerading as "new tech"
• Short-sighted approach for employees – now and for future direction
• Too enamored of the tech itself – no sense of why a customer would use it
• No real markets or customers
• Failure to continuously monitor solution space, markets, customers, other vendors
• Failure to constantly test strategies for change, good and bad, and then figure out what actions to take

To prevent bad outcomes, software vendors of any size need real intelligence, real analysis and realistic strategies.

 

 

Related Links

Three Journeys: Lifecycles of Enterprise Software Buyers & End Users

The Irrelevance of Porter's Five Forces for the B2B Software Industry

Customer Buying Criteria - Applying customer & competitive intelligence to selling tools leads to strategic internal benefits

Perception: The Customer Journey and Business Success

Symbiosis: Customer Experience and Business Process

Strategies from Top to Bottom - Content Marketing for B2B Software Vendors

Internal Disruption–No Longer Business As Usual

 

About the author: Julie Hunt understands and sees the overlap and convergence of many business processes and software solutions that once were thought of as "separate" – and how this impacts both software Vendors and Buyers, as well as the strategies that enterprises implement for how technology supports the business and its customers. Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Strategies for B2B Software Solutions: Working from the Customer Perspective

The Irrelevance of Porter’s Five Forces for the B2B Software Industry

 

For the software industry the use of strategic market and competitive intelligence has not been particularly well executed by many vendors. MI and CI for software vendors differs greatly from the more established practices for CPG, Pharma or manufacturing – often what works well for these other industries has little relevance for software vendors. The main difference: the intensely fast pace of constant change for most of the software industry. "Time" is measured in nanoseconds. As such the software industry requires a greater focus on MI and CI, but often actual practice does not include the most beneficial aspects.

Market Intelligence is essential for creating strong product strategy and for fine-tuning that strategy as industries, markets, customers, the product space, and competitors evolve over time – again usually very small windows of time. Core decisions for businesses must be based on reasonable understanding of significant and likely future events – what the potential impact could be, good and bad. Market intelligence is the dynamic means for uncovering the right future-pointing intelligence as early as possible, averting "nasty surprises" and discovering new opportunities.

Strategic market Intelligence differs from business research (and traditional business intelligence) through context -- a certain mindset held while the research and analysis phases are done. The market intelligence professional always has in mind the organization, its business and product space, the industry, customers and target markets, and the drivers behind the need for intelligence. It's an ongoing sense of the impact of what could be uncovered -- the ramifications of what seemingly unconnected items of intelligence could mean for the company. It ensures that business decisions and product direction are customer-focused, market-driven, and reality-based.

Where software companies go wrong with MI and CI efforts is limiting activities to directly supporting sales in tactical ways, focusing only on pointless programs for "killing the competition", and endless feature/function battles that are meaningless in today's commoditized markets for software solutions. Another wrong turn has been the adherence to Porter's Five Forces as a model for product strategy and for market and competitive intelligence, undoubtedly influenced by MBA school curricula in the eighties and nineties, much of which has now proven useless to many enterprises.

 

 

                                                PORTER'S FIVE FORCES 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Porter's Five Forces: The Magic Model that Doesn't Work

I recently read Steve Denning's article on the demise of Michael Porter's Monitor Group consulting firm. Porter invented a model for corporate "strategy" based on 'Five Forces' that has been treated almost as a reverential artifact for many years. Denning's article brought me back to my own thinking years ago on why Porter doesn't work for software companies. I never have really used Porter for strategic market intelligence for the software industry – instead I developed a matrix that holds more relevance to the needs of software companies.

I refer to Porter's model as an "artifact" because it is no longer relevant to today's markets, if it ever really was. It's linked to a business context set in the Eighties, when corporate strategy focused on inside-out objectives such as beating competitors and sustaining profitability with no connection to value delivered to customers – chest-thumping instead of serving customers. There was a great deal more market predictability and regularity. Today's markets obviously have become volatile and not so predictable; businesses are now challenged to create new business models multiple times during the life of the enterprise to survive and thrive.

 

Five Forces Model Fails the Software Industry

Because Porter's Five Forces model is based on non-changing market conditions, it is limited or even harmful for dealing with dynamic, ever-changing industries and markets. Well, the software industry never sits still, and this has intensified in recent years. And the customers of software vendors are also facing uncertain and fluctuating markets, which adds further complexity when seeking insight for future trends regarding customer needs and wants.

Professionally, Porter was not experienced in any industry, in any hands on sense, when he created the Five Forces model, so he didn't have practical experience to fully explore or prove out his model. If you don't understand the software industry, how people interact with software and rely on software to improve their own enterprises, then any indirect models will likely have little relevance.

Under Porter, competitive intelligence is not about going to market competitively to meet customer needs and desires - it's about "beating" everyone including the customer. The customer is not a partner but a conquered spoil of war. Not exactly the best path to engendering customer experience excellence – perhaps Porter's model is one of the reasons that many enterprises have done such a bad job of focusing on the customer. MI and CI better serve a software company when its purpose is to understand the competitive landscape well enough to seek out paths that diverge from the "herd" so that the company carves out underserved markets and better understands customer needs. Porter's aggressive modeling around "competition" has misguided organizations into becoming obsessed with destroying the competition.

Other areas where Porter's model comes up short:

• The value of partner ecosystems including supply chain
• Predicting future trends
• Identifying new customer segments
• Understanding that software solution spaces are commoditized
• When it's time to sunset solutions and markets

These are all essential to growth and evolution for sustaining success.

 

Defining and Sizing Markets – Another Porter Failure

For software offerings, market sizing used to be a fairly straightforward task, when technology problems and solutions were seemingly distinct and silo'd from other technology areas. Market sizing is important but many software vendors don't consider all of the parameters that actually define the markets and the customers that are the best fit for software offerings.

An example of market sizing that has become more complex – and that certainly would be poorly served by using Porter's model – is the software market for what used to be called Web Content Management and is now frequently called Web Experience Management. The use of websites and web presence by organizations to promote and sell their products has evolved to sophisticated levels where multi-channel customer experiences have greater importance and often involve Internet venues that are not controlled by the organization.

WEM is actually a composite of a solution ecosystem – understanding this leads to a better calculation of the overall market size. Although some market forecasts from analyst firms are stretching to include more of this ecosystem, often multiple market forecasts must be considered and added into the final market potential for WEM solutions. The overall solution ecosystem becomes compellingly relevant when taking the customer's point-of-view for the desired end-to-end solution.

Porter's model is ill-equipped to handle such converging markets or ecosystems. Often Porter's model is used in business school in simplistic calculations of market size where the 'profit potential' is the real goal, unfortunately without considering the many variables that go into real market potential. And of course such simplistic calculations also lead to the allocation of 'market share' – once again focusing on competitors rather than customers.

The complex variables for real market potential primarily center on the customer: meeting customer needs and desires, improving customer experiences with the organization, understanding who the customer is through useful segmentations mapped to solution scenarios, addressing usability and problem-solving effectiveness for the software offering, from the customer perspective. But these are harder variables to try to quantify and often are left out of the 'equation'.

Another aspect of WEM markets is the fact that there are two sets of customers to be considered: the customer who buys the WEM software, and the target customer for the web properties that will be built with the WEM software. Since WEM solutions impact two levels of buyers, the technology exists as a means to an end – it is the "end" that really matters and must be foremost in the minds of vendors and solution buyers. Porter's model has little to account for the complexities of 'customer' in this scenario.

 

So Why Am I Concerned about Porter

As many have pointed out, Porter's Five Forces seemingly didn't save Michael Porter's own high-dollar consultancy, so how can it have relevance to the needs of other organizations. Even Porter's consultancy wasn't part of the simple market construct that is the best fit for gaining benefit from the Five Forces model.

Steve Denning asks in his article:  

Had Monitor tried to implement Porter’s strategy and executed it poorly? Or had Monitor implemented Porter’s strategy well but the strategy didn’t work? If not, why not?

Denning further explains what was greatly lacking from Porter's model:   

There was just one snag. What was the intellectual basis of this now vast enterprise of locating sustainable competitive advantage? As Stewart notes, it was “lacking any foundation in fact or logic.” Except where generated by government regulation, sustainable competitive advantage simply doesn’t exist.

What’s gone wrong here was Porter’s initial thought. The purpose of strategy—or business or business education—is not about coping with competition–i.e. a contest in which a winner is selected from among rivals. The purpose of business is to add value for customers and ultimately society. There is a straight line from this conceptual error at the outset of Porter’s writing to the debacle of Monitor’s bankruptcy. Monitor failed to add value to customers.

 

For strategic purposes alone, a lot of time has been wasted on trying to align an organization's management with Porter's model when it just plain wasn't useful for most software companies. Many industries have spent way too much time and resources on building complicated and non-scaling frameworks that never really help the organization with strategic decision-making and don't provide real-time responsiveness to market changes. And if the model is applied only to particular segments of a complex corporation, important aspects will be missed by working without the context of interrelations across product groups and segments, as well as across organizational functions.

 

                                                                                                        Source: Julie Hunt Consulting

 

 

Customer-Focused Strategic Market & Competitive Intelligence

Many software companies continue to think of market and competitive intelligence as tactical methods to attack competitors, to convince a customer not to buy from a competitor, instead of: developing their own strategic solution offerings, building strategic relationships with customers, and understanding how to help customers really solve their problems and support their business initiatives with reliable solutions.

Focusing on Customers should be the starting point for MI and CI initiatives for software vendors. It is essential for software vendors to attract customers, and eventually sales, through true ROI and through differentiation other than feature/function minutiae. Market Intelligence programs, in collaboration with product marketing, are important sources of comprehensive research, analysis and recommendations for providing the elements of a software solution that can set it apart, from the customer perspective.

Strategic MI makes a significant difference for the competitiveness of software companies:  

• New opportunities – identify new trends that will matter to target markets and customers; how to get there before the competition (whenever possible)
• Enhanced customer interaction – understand customer POV, goals, needs, strategic direction
• Stronger target market selection & positioning – research, validate go-to-market and positioning; locate under-served markets for target customers and solution space; guide how to articulate positioning well for customers, analysts, industry
• Strategic view of competitive landscape – figure out true differentiation, figure out where competitors are not operating; understand the issues that matter to customers and the solutions they seek from competitors
• Early warning of industry and/or competitor changes – take advantage of opportunities and leverage/deal with threats and risk

 

Related links:

Software companies still fail to tap into top benefits from market and competitive intelligence programs

Market Intelligence – Making Better Business Decisions at the Core of the Company

Shallow Thinking Ensures Bad Business Decisions

Provocation-based Market Intelligence in a Market-Driven world

Moving beyond WCM - Web Experience Management software solutions and markets

Internal Disruption–No Longer Business As Usual

Customer Buying Criteria - Applying customer & competitive intelligence to selling tools leads to strategic internal benefits

In Pursuit of Customer Experience Excellence

Achieving the Social Business, Inside and Out

 

About the author: Julie Hunt understands the overlap and convergence of many business processes and software solutions that once were thought of as "separate" – and how this impacts both software Vendors and Buyers, as well as the strategies that enterprises implement for how technology supports the business and its customers. Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Strategies for B2B Software Solutions: Working from the Customer Perspective

 

 

‘Big Data’, Intelligence and Multi-faceted Innovation

 

I’m using this diagram (below) in two posts – this one and one to be published shortly. Why? The impact of what this diagram is communicating is big, and affects many aspects of enterprises that want to innovate, to be competitive, to grow, to stick around for a long while. So it deserves the extra exposure.

While the use case for this example of multi-faceted innovation is Consumer Products industry, all industries have a stake here, especially as more and more technology offerings are becoming “consumerized”, and as cloud services and mobile usage for business grow. Multi-faceted innovation has great potential to transform enterprises into agile social businesses.

 

 

IBM: Enabling Multifaceted Innovation 

 

More teams in enterprises need access to more data, information, content, and many kinds of analytics to better perform their functions, to find more ways for the business to deliver what customers want, to be more competitive, more responsive in volatile economic times and in dynamic markets. Reliable, relevant information delivered at the right time impacts how strategies and goals are realized, how innovative a company can be, or even how long a company will be around. Information does no good if it languishes in silos, whether in the cloud or behind the firewall. Sophisticated and business-oriented technologies are needed to process information from diverse distributed sources, to analyze it, and then share the results for further refinement or even disputation.

The enterprise that has truly implemented multi-faceted innovation in as many aspects of its business as is appropriate is more likely to understand how important it is to tap into as many information assets as possible, whether they are ‘owned’ by the enterprise or sitting in cloud repositories for social sites. Information-driven insights are a significant aspect of multi-faceted innovation in the enterprise.

 

Business and InformationTechnology

Early in October I had the opportunity to attend an event sponsored by the Teradata Partners User Group (TDPUG). Teradata Corp. is a global vendor of software solutions for data management and governance, data warehouse capabilities, and for a wide array of analytics offerings. Obviously user group presentations usually show the positives of using vendor offering. But beyond that, the presenters usually talk fairly honestly about how they accomplished work for their companies that made a difference. The presenters are usually the hands-on people who know the ins and outs of their projects, as well as the impact on the business.

Part of my focus at the TDPUG conference – or Partners, as many call it – was attending business-oriented sessions (rather than technical deep dives) that might help with the following: 

“Big Data’ is a major topic for Teradata, and for recent acquisition Aster Data (‘big data’ analytics).  So I wanted to see how end users are able to connect highly varied and frequently complex Data to business outcomes that matter and to innovation.

Looking at processes working with data and analytics: are enterprises combining Business, Technology, Analytical, Creative, Collaborative activities to lead to good results for the business? If yes, how are they doing this? 

New directions for Teradata: how is the company changing from promoting its offerings mostly to very tech infrastructure-oriented target markets to adding strategic focus on the impacts of BI and analytics on business goals and needs – and how is Teradata connecting to roles related to the purpose of the business itself?

From the user presentations and those from Teradata: what kinds of roles are emerging, in biz and tech, that will make a difference for enterprises when it comes to data / information and analytics? 

  

A Case in Point: Strategy, Innovation and ‘Big Data’

A few sessions showed how to connect a strategic competitive intelligence core to analytical processes. A session with Vodafone (España) revealed a model for deriving real value from ‘big data’ that feeds into processes for competitive strategies that lead to innovating consumer products and business outcomes.  Instead of falling into the trap of “battling” competitors in feature-function wars, Vodafone shows that companies should be on top of what their current and desired customers want and need.  Otherwise, the risk is falling hopelessly behind customer expectations for new and important changes in the market and products that address this market.

Vodafone bills itself as ‘customer-obsessed’ and in the highly competitive mobile phone business the company has to be. The strategic Competitive Intelligence (CI) group at Vodafone works with continuous analytical processes to feed intelligence into differentiation and competitive edge – from the customer perspective. Vodafone sees a lot of opportunity in understanding distinct customer segments and from quickly providing what each segment wants and needs. Many Vodafone target markets are highly volatile, so daily data updates and analyses are de rigueur to derive “next best actions” for Vodafone to take. Decision-making results from a convergence of analytics and intelligence in key areas: sales, marketing, competitive landscape – but revolving around deeply understanding each customer segment. This Vodafone CI approach illustrates the great payoff when business data silos are eliminated to achieve real integrated intelligence, leading to effective product and business innovation.

The Vodafone session also epitomizes many of the Partners stories: when considering ‘big data’ analytic processes, the focus is not just the data itself, but what it’s used for. The data must be reliable, timely, right sources and integrations. Vodafone ‘big data’ analysis means many sources, high volume, fast intelligence leading to fast actions, and a daily reiteration of it all. Complex EDW and analytics infrastructure are aligned to business strategy and important outcomes, with a twist: the game changes constantly.

An additional layer is the continuous re-analysis of methodologies for competitive and market intelligence processes, and of the validity of selected data sources, as well as context and the inclusion of new factors. To keep the intelligence efforts relevant, the dance steps are: change, iterate, stay agile (while knowing their competitors are likely taking similar actions as happens in highly commoditized markets).

What Vodafone is accomplishing with its market and competitive intelligence core is a move to derive from an “unexpected” and innovative use of analytics the sorts of offerings that should be made available to target customers.  A new perspective on what should be the significant issues for target customers is essential to capture customer interest.  Competitive and market intelligence can also be leveraged to ensure that the customer’s perspective is maintained as a “reality check”. It’s an ongoing sense of the impact of what could be uncovered, the ramifications of what even the smallest pieces of information could mean for the company.  It ensures that business decisions and product direction are market-driven, reality-based, and actionable.

  

Information Technology Underpins Multi-faceted Innovation

When people think about what Teradata offers, most think of a very intense technology infrastructure. But Teradata and its new acquisitions, Aster and Aprimo seem to be working hard to make clear to the business users of an enterprise how that tech infrastructure connects well to what the business needs to accomplish in every part of the enterprise. These ideas were found in many of the Partners sessions:   

Every business session that I attended continued to emphasize people (roles), process, practices -- and positioned tech in context of serving the first three – very focused on real business outcomes

Real collaboration permeated the projects described in the sessions – not called out as such but well exhibited in descriptions of what was done and why – shared passion for getting real things done in effective ways, teams working cross-departmentally

Natural collaboration happens mostly in enterprises where the company ‘culture’ is open to cross-team collaboration and working to effective goals

Purposeful and constant communication across teams is very important for the success of the projects presented

Sessions drove home that data is only valuable in context – context that is comprised of many aspects of the business and how the data is to be used

It is more and more essential for people to take time to understand their data sources and the data itself, before trying to use it, before integrating it and so on >> certainly before analyzing it and using it for decision-making

The need for excellent information flow, reliable data, accurate analytics permeates every group in the enterprise, and can help these groups find more ways to innovate internal activities, as well as innovating products and services, and relationships with customers and partners

  

Multi-faceted innovation is the basis for transforming companies into innovative, dynamic and social businesses. Most companies focus innovation activities on products and services, and on finding new markets. But to survive and thrive, companies need a strategic multi-faceted commitment to innovating throughout the enterprise, how it does business, and how it interacts with customers, employees and partners. Once such a commitment is in the works, enterprises then need to understand how information technologies play significant roles for the success of multi-faceted innovation.

  

Related Links:

Information, Intelligence and Process:  Combining Forces to Better Answer Business Needs

The Ever-Expanding Importance of Analytics–True Intelligence for Business

Goals and Metrics – Measuring Customer Engagement on the Web

The incongruous worlds of “data integration” – Making data accessible for any-size companies

Custom Code or Data Integration software tools: Strategic Use of Technology for Company Competitiveness

Levels of Social – and Integration – Cut Across Enterprises 

Market Intelligence – Making Better Business Decisions at the Core of the Company

Shallow Thinking Ensures Bad Business Decisions

Software companies still fail to tap into top benefits from market & competitive intelligence programs

Connecting Data Governance to Business Outcomes That Matter

Data Management: Reaching into the Cloud

 

Disclaimer: Teradata Magazine sponsored my attendance at TDPUG, since I am doing some consulting with them.

About the author: Julie Hunt is a software industry solution strategist and analyst, providing market and competitive insights. Her 25+ years as a software professional range from the very technical side to customer-centric work in solutions consulting, sales and marketing.  Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt   For more information: Julie Hunt Consulting – Strategic Product & Market Intelligence Services    

 

Internal Disruption – No Longer Business As Usual

Tapping into periodic business model renovation to refresh competitiveness

 

Not too long ago, a tweet from Hutch Carpenter @bhc3 caught my eye:

First step in disrupting an industry: identify the "business clichés"

The tweet linked to an article by Luke Williams, known for his work on ‘disruptive thinking’ for transforming businesses through seeking the unexpected and through adopting proactive disruptive behavior and strategies. The article elaborates on what is meant by business clichés:

In other words, what are the clichés - the widespread, hackneyed beliefs that govern the way people think about and do business in a particular space… inverting or denying industry clichés can often lead to significant business breakthroughs

Williams’ notions of ‘business clichés led to a couple of tweets from me that boil down to:

…apply internally to tech co’s biz model > question assumptions, status quo, disrupt business as usual…to move to new possibilities, competitiveness, new solutions & markets

As with the Social Business, starting internally with change frequently is a better route for companies when faced with the need to disrupt current business models for survival and success purposes. Software companies are especially prone to stand on old business models well past the expiration date. And many software companies are surprised when strong competitors emerge, based on fresh business models.

  

What is a Business Model?

Business models focus software companies on target markets, customers, the solution space and, somewhat indirectly, the competitive landscape, the same matrix that underpins market intelligence. When companies seriously embrace the selection of a business model, the process introduces good and rigorous strategic thinking into decisions about company direction, as well as definition of company scope. Through the business model, the focus is holistic and interactive in terms of how the company will proceed to achieve success.

Of course there are many definitions and concepts about what comprises a business model. A lot of MBA school, entrepreneurial, and VC hours have been spent on not only deciding what is the optimal business model for a particular undertaking but on the strategies to carry out its intentions.

  

The shortest definition that I’ve come across is in a post by Tim Berry: A business model is a description of how your business intends to operate and make money. Berry then goes to the next level:   

But innovative business models go beyond this simple formula to create customer loyalty, make value in unusual ways, and define new products or services that people didn’t know they needed.  

This dovetails somewhat with a business model definition put together by IBM:

• What value is delivered to customers: Customer segments, the value proposition, the specific “job to be done,” what is sold and how it is sold

• How revenue is generated: the pricing model and forms of monetization

• How the company positions itself in the industry: the company’s role and relationships across the value chain

• How the value is delivered: Key internal resources and processes as well as external partnerships.

There is lots of disagreement, lots of vague notions regarding whether business models matter or not.  Some consider the business model almost a sacred object, carved in stone. More and more, many see each iteration of the business model as disposable. A new class of thinking sees the business model not as an end but an ever-evolving means to success as a company.

 

Articulating New Direction - Most Companies Not Very Good At Doing This

Intriguing idea: the disposable business model. But how many companies pull off such an approach?

From my experience in the software industry, not many. Particularly bad at changing direction are mid-sized software vendors that are publicly traded. While being a smaller company would suggest agility for change, often these companies are ham-strung by boards of directors who seem to want growth without risk. There is no growth without risk for most companies. One piece of advice to mid-sized software vendors is to never go public and thus retain a healthy ability to reinvent the company without the inertia of boards of directors and Wall Street expectations. Another piece of advice: learn to embrace risk: that is, the good kind that can lead to growth and new success.

But no matter the size of the company, many software vendors usually wait too long before assessing the health of the current business model and even then, are slow to articulate change, even slower to act effectively. As a result, core markets increasingly stagnate, management still tries to work with the old way of doing things, and fails to work genuinely on a new business model, or as Williams advises, to identify and then deny the business clichés that are dragging down the company.

In 2008 Mark W. Johnson, Clayton M. Christensen, and Henning Kagermann published the article “Reinventing Your Business Model” in the Harvard Business Review, an article that went on to receive second-place honors for the 2008 McKinsey Award. The article culminates research into the difficulties many companies have with pulling off success through business model innovation. The authors contend that these companies have such poor understanding of the current business model (really disturbing! but explains a lot…) that they can’t relate the current model to new opportunities, nor can they be confident about ejecting the current model for something new.

(Clay Christensen) also underscores the fatal flaw that managers make when trying to reinvent their business in the face of a disruptive competitor. Their solution is often to leverage what the company already has in place at marginal cost rather build an entirely new business model with heavy investment.

If you are trying to create a new business model because the world is changing, then you don’t want to leverage what is already in place. An entrant doesn’t have anything to leverage, so just creates what needs to be created.

 

When It’s Time For Reinvention

A 2005 survey by the Economist Intelligence Unit reported that over 50% of executives believe business model innovation will become even more important for success than product or service innovation. A 2008 IBM survey of corporate CEOs echoed these results. Nearly all of the CEOs polled reported the need to adapt their business models; more than two-thirds said that extensive changes were required. And in these tough economic times, some CEOs are already looking to business model innovation to address permanent shifts in their market landscapes.

 

Insanity: doing the same thing over and over and expecting different results 

-- Albert Einstein

  

Of course, there’s no point to changing the business model if the company isn’t innovating its software offerings, which must come about by “disrupting business as usual” internal to the company. Not all product innovation demands a reinvention of the business model. Perhaps the salient question is: how does this new innovation impact the proposition articulated for customer value? Companies that find success with business model reinvention also possess clear understanding of their customers and the value to those customers that comes from innovations.

Identify When A New Model May Be Needed:

An opportunity to...           

• Address needs of large groups who find existing solutions too expensive or complicated
• Capitalize on new technology, or leverage existing technologies in new markets
• Bring a job-to-be-done focus where it doesn’t exist

 A need to . . .

• Fend off low-end disruptors.
• Respond to shifts in competition

 

To determine whether a firm should seek to reinvent its business model, Johnson, Christensen and Kagermann advise these steps:

• Articulate what makes your existing model successful. For example, what customer problem does it solve? How does it make money for your firm?
• Watch for signals that your model needs changing, such as tough new competitors on the horizon.
• Decide whether reinventing your model is worth the effort. The answer is yes only if the new model changes the industry or market. 

So the new proposition for staying competitive may be that many companies will need to adopt the strategy of continuous business model reinvention. But to do this, tremendous internal change will have to happen, particularly around the management of the company. Reinvention, new directions, continuous competitiveness -- all are only possible in companies that embrace change and innovation in the corporate cultural DNA.

 

             
                              Source: IBM CEO study – Capitalizing on Complexity

 

Comprehensive Market Intelligence is Key to Business Model Disruption

A lot of what can make a software company more competitive – and can contribute to innovation of business models, markets and products – comes from well-executed Market Intelligence activities and processes. Excellent Market Intelligence is essential if business model reinvention will be an on-going initiative. Understanding customers, markets, channels and competitors is based on better information to create advantage in new and unique ways:

• New opportunities – identify new trends that will matter to target markets and customers; how to get there before the competition (whenever possible)
• Early warning of industry, market and/or competitor changes – take advantage of opportunities and leverage/deal with threats and risk, and always look over your shoulder…
• Enhanced customer interaction – understand customer POV, goals, needs, strategic direction
• Stronger target market selection & positioning – research, validate go-to-market and positioning; locate under-served markets for target customers and solution space; guide how to articulate positioning well for customers, analysts, industry
• Strategic view of competitive landscape – figure out true differentiation, figure out where competitors are not operating; understand the issues that matter to customers and the solutions they seek from competitors

 

 

Reinvention: Brand Equity / Brand Perception

I want to open up the question of how business model reinvention impacts Brand, both in terms of brand equity (value and general recognition built from the former business model) and brand perception (how current and potential customers – plus media, competitors, analysts, etc. – view the company). In the not-so-distant past, it had been considered near suicide to make business model changes that could negatively impact Brand. But in the digital age, when information is quickly disseminated through endless media, most people are easily educated about changes in a company. The Internet itself is all about constant change, and many have grown up in that environment.

I’m not going to explore the Brand aspect in this article but it is an issue that must be considered when reinventing business models and enacting innovation that impacts customer perception and receptivity to the company’s offerings.

  

Smaller Companies With Disruptive Genes – Better At Business Model Reinvention?

>> JackBe – Customer-Driven Disruption

JackBe started off as an Ajax tools vendor in 2001. After a while the company began targeting enterprises with a mashup platform that connects to all sorts of data sources. Responding to what JackBe customers wanted, the next development was to provide capabilities for ad hoc data integration mashups by end users.

Recently JackBe has been calling itself ‘the Real-Time Intelligence Company’, specializing in situational awareness, and is promoting the idea that the company may have a new way to provide business intelligence for enterprise end users. Real-Time intelligence for JackBe first of all means self-service BI, extrapolating its mashup services for end users. Real-Time also means fast, easy access to existing data sources, without concern about the freshness of the data. Essentially, the JackBe approach supports instant decision-making in certain scenarios.

A significant challenge entails the validation of data sources and value of the resulting mash-ups: do the end users understand what they are doing and are they intelligently combining the appropriate data? Is the intelligence that is pulled together relevant and accurate, and how do end users know or test the intelligence to provide validation?

By stepping into the larger arena of BI, JackBe now has invited in scrutiny from a well-established solution space. However, traditional BI is not without its problems and has suffered low adoption and success rates over time. It may be that JackBe is pioneering a new approach that could make a significant change to how BI is practiced or even what constitutes “business intelligence”.

JackBe has found itself moving into a new business model, seemingly a case where business model reinvention continues to be customer-driven, and where a company listens well to its customers and acts on their needs and wishes, to achieve competitive positioning and success. But with the new business model comes new challenges to ensure the validity and accuracy of its product directions.

  

>> NewsGator – One Business Model Dies Out, Another Adopted to Thrive

Starting in 2003, Newsgator focused on developing RSS usage for information and content consumption.  A business model shift occurred when NewsGator changed from a consumer focus to targeting enterprises. Even though NewsGator still provides RSS, access is now free.

In 2007, NewsGator reinvented its business model by launching Social Sites, community / collaboration software that also provides tight integration with Microsoft SharePoint. NewsGator was already a SharePoint partner for its RSS capabilities, so its business model shift pivoted on a strategic, and rather significant, partnership already in place. NewsGator acquired Tomoye community software in 2010, mainly to enter new markets. Tomoye also had the SharePoint connection.

The move to a communities / collaboration platform that extends SharePoint has proven to be successful to date. The new business model includes a deep commitment to Microsoft and SharePoint – and active cultivation of an ecosystem of Microsoft partners around “making SharePoint social”. Social Sites is built directly on the SharePoint platform, is SharePoint cloud certified, supports multiple versions of SharePoint, including mobile and Office 365.

NewsGator has selected a niche for its social solutions in that it is dedicated to complementing the SharePoint platform and to making the experience of using Social Sites with SharePoint a seamless and smooth experience for end users. With this business model, NewsGator success is highly dependent on continued SharePoint success. The up side is that Microsoft makes available an extensive ecosystem that can greatly benefit NewsGator.

One aspect of business model reinvention for NewsGator tracks back to the impact of reinvention on Brand. Does the company name still make sense, shifting from RSS/aggregation services to social media platform? Or does the brand recognition of NewsGator’s name trump any confusion about what the company now does? Frankly, considering that a good many software company names are obscure, this really shouldn’t be an obstacle for NewsGator, particularly with such a targeted solution in conjunction with SharePoint.

  

>> Stone Bond – From Services to Software Vendor

There are many cases where professional services providers for IT solutions will either productize services work into a software offering or purposefully create new software solutions that eventually evolve into a packaged software business for the services company. A key change in business model comes when the company must decide if it is to be a dedicated software vendor or a services company – or even, perhaps, the company decides to split into two organizations.

Stone Bond’s consulting services began in 1993, providing IT solutions for the worldwide oil and gas industry. Among the services was data modeling projects, working with oil company engineers as end users. Many in the oil and gas industry have long understood that their data is a very valuable asset.

In 2002 Stone Bond Technologies launched a software solution called Enterprise Enabler for data and business integration projects. Enterprise Enabler presents as a single environment for EAI and ETL capabilities and is somewhat geared towards end users / business users through out-of-the-box “codeless” data integration capabilities. Stone Bond has developed several technologies such as AppComs (for connectivity) to innovate how integration projects are created and executed. BPM and workflow based on SOA utilize end-to-end shared metadata.

While Stone Bond still targets the oil and gas industry, and obviously has a great deal of expertise for that industry, the company has already taken Enterprise Enabler into other markets, such as financial services and government. The solution also straddles target customers by offering a solution that can appeal to business users and/or IT teams. Enterprise Enabler may be blazing a trail for bringing together IT and business to better execute data integration projects as collaborative partners.

The company is now working on showcasing Enterprise Enabler as a software product independent of the original consulting business, with work going into raising brand awareness. Enterprise Enabler already has a solid customer base, but also seems like a “best-kept secret” in the data integration vendor space. In some ways, Stone Bond has an interesting clean slate when it comes to marketing to and educating the world on what this solution has to offer.

 

Related Links

Market Intelligence – Making Better Business Decisions at the Core of the Company

Software companies still fail to tap into top benefits from market and competitive intelligence programs

Provocation-based Market Intelligence in a Market-Driven world

Shallow Thinking Ensures Bad Business Decisions

B2B WEM / WCM Software Vendors Targeting Mid-Market customers: stay where you are!  

 

About the author: Julie Hunt is an accomplished software industry analyst, providing strategic market and competitive insights. Her 20+ years as a software professional range from the very technical side to customer-centric work in solutions consulting, sales and marketing.  Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt   For more information: Julie Hunt Consulting – Strategic Product & Market Intelligence Services

 

Disclaimer: Julie Hunt is not affiliated with any of the vendors in this article.

 

The Ever-Expanding Importance of Analytics – True Intelligence for Business

“Intelligence” is a word much bandied about in enterprises. Frankly few enterprises use it properly to denote what constitutes authentic intelligence.

"Intelligence is nothing if not an institutionalized black market in perishable commodities"

Master spy novelist John LeCarré

While the above notion is intended to refer to information gathered by spies regarding enemies, this sort of thinking has colored how enterprises view intelligence: the secret information that will solve all problems and kill all enemies. It doesn’t matter if you’re talking business intelligence or market / competitive intelligence. The apparent allure of the military and spy industries for enterprises has badly skewed how many companies view intelligence.

The kind of intelligence that truly benefits enterprises derives from classic definitions of the word: learning, understanding, applying knowledge and experience to new situations to make better decisions. For both business intelligence and market/competitive intelligence, the frequent catchphrase is “making better business decisions”. Both involve data, analysis, recommendations. Both can have strategic and tactical applications. Both benefit from qualitative as well as quantitative dimensions. And both should strive for authentic INTELLIGENCE, not just resultant collections of information.

Business Intelligence methodologies and tech solutions have been used to generate actionable views of a company, frequently rooted in business operations. Until recently, BI outputs have been primarily reports – some might say too many non-contextual reports, many of which may be trivial, pointless, or worse, misleading. The BI world includes analytics, data mining, text mining and predictive analytics.

And sometimes BI is considered to be ‘competitive intelligence’, hence my references to market intelligence. Market/competitive intelligence and business intelligence should be complementary, but are not the same thing. In my view, a certain amount of BI output contributes ‘intelligent data’ for market intelligence initiatives. Overall, market intelligence gleans from many ‘data’ sources from many disparate sources inside and outside the firewall, both qualitative and quantitative, while filtered by specific strategic contexts. Until recently, BI has mostly derived from practices and technology that address structured data and business processes inside the firewall. BI will now have to include unstructured or content sources in analytics, to add in missing subtleties, context, and insight that cannot be pulled from structured data sources.

Analytics Everywhere

In addition to overt BI-style analytics, many other analytics solutions have been proliferating to help make better business decisions. Web analytics were silo’d for a while as relevant only to website usages. But web analytics now have many forms and have become very sophisticated. Data captured by web analytics is now important to many teams across the enterprise and is now becoming more integrated into other “business intelligence” endeavors.

With fast-growing social media applications, SM analytics are now emerging – again the data generated is essential and must be integrated into the overall intelligence base of the enterprise. Content analytics have become even more important as unstructured content proliferates from many sources.

These seemingly diverse analytics cannot be confined to individual silos in enterprises. “Intelligence for the Business” that results from all analytics is needed at LOB / department levels, as well as at the über-enterprise level. And mid-market enterprises need such business intelligence capabilities as well. So all kinds of analytic tools need to become more accessible to many roles and organizational segments that have not necessarily been targets of such solutions before.

Unfortunately, keeping pace with the enormous proliferation of data, and even with the various analytical outputs, is overwhelming many enterprises. More integration between what began as silos of analytics must now happen. Enterprises have to get better at the behind-the-scenes / get-your-hands-dirty work that is essential to make realistic and effective use of all the data (structured and unstructured) pouring in from so many sources. The Semantic Web will likely contribute overall to the integration of structured and unstructured data to add to intelligence relevance.

Predictive Analytics – The Bold New LOB Tool

Considered a subset of BI, but also present in other categories of analytics solutions, predictive analytics may become much more in demand than traditional BI solutions, especially with the new directions of innovative predictive analytics solution vendors.

Eric Segal of Information Management on predictive analytics – citing a marketing use case:

Predictive analytics is data mining technology that uses your customer data to build a predictive model specialized for your business. …The real trick is to find the best predictive model.

…a careful combination of predictors perform better customer prediction by considering multiple aspects of your customers and their behaviors. Predictive analytics finds the right way to combine predictors by building a model optimized according to your customer data.

Predictive analytics builds models automatically, but the overall business process to direct and integrate predictive analytics is by no means automatic - it truly needs your marketing expertise.

Predictive analytics can be part of “traditional” BI offerings – it’s also part of the web analytics world. Baynote provides ‘Adaptive Web’ solutions that include analytics, personalization and social search for customer-focused relevance on websites, to help optimize engagement and retention. Baynote’s Collective Intelligence Platform provides companies with predictive analytics based on the implicit patterns of customers visiting their websites. Omniture, WebTrends and other web analytics solutions also provide capabilities for predictive analytics.

Content Analytics, Content Intelligence

Enterprises have been challenged for years on the content intelligence front – it has been very difficult and very messy to extract meaning (and thus retaining context) from unstructured content to be used as “data”. The amount of enterprise content is enormous, with geometric expansion in play. For enterprises that publish content on the web, content analytics also offer the means to better connect with target markets and customers:

"Content analytics" can be seen as business intelligence (BI) for/from content, as text (rather than number) crunching that generates insights to improve business outcomes. The two practices, content analytics and BI, certainly share motivations. If you don't analyze your content/data, you may be missing opportunities and running risks.

For content publishers, analytics drives better targeted content delivery, expanded audiences, and secondary uses and new distribution channels. These outcomes add up to profit. On the flip side, they are matched by reduced risk and cost avoidance given possibilities for more complete, more accurate compliance screening, e-discovery, and storage management.

Analytics also boosts value for users. Semantic search, faceted navigation, and content annotation/enrichment create findability and improve user experience and value for users. They also let users treat content like data. Call the goal "content intelligence," enabled by "smart content."

Seth Grimes on Content Analytics

 

“Intelligence” Hits The Wall

Stephen Few’s graphic for “BI Has Hit the Wall” is quite expressive of where BI – and all analytics - need to head to deliver evolving value to enterprises. Stephen Few is a leading expert in creating effective data visualizations that communicate real intelligence and don’t just function as “eye candy”:

Contained in these early definitions was the seed of an inspiring vision that caused people like me to imagine a better world, but the business intelligence industry has done little to help us achieve the vision of the people who coined the term. When Thornton May was interviewing people for his book “The New Know”, he asked a prominent venture capitalist known for his 360-degree view of the technology industry what he thought of when he heard the phrase business intelligence. His response was “big software, little analysis.”

For information to be useful, we must explore it, analyze it, communicate it, and monitor it, but the BI industry’s attempts to support these activities with few exceptions have been tragically comical. The technology-centric, engineering-oriented perspective and skill set that has allowed the industry to build an information infrastructure is not what’s needed to support data sense-making. To use the data that we’ve amassed, a human-centric, design-oriented perspective and skill set is needed.

New World Focus on BI and Predictive Analytics

Some of the significant changes to analytics solutions relate to how final artifacts are “formatted”. There has been a growing transition from traditional report formats to interactive visualization tools, and to collaborative processes that enhance the final artifacts. More companies want BI to help with current and future needs and goals, rather than measuring the past. And these companies should be inviting in more and more individuals (via collaboration) to help refine the accuracy and contributions of analytics outputs. Newer on-demand BI / analytics solutions are providing “right now” intelligence, though still these are still works-in-progress, for the most part.

A number of articles lately have made the point that BI initiatives have not been highly successful for many customers, while making another important point: that “failure” actually is part of the BI refinement cycle. But for costly enterprise-style BI solutions, “failure” can be quite expensive. Gerry Brown of Bloor comments:

However, there is little doubt that the number of BI users overall is increasing. With low-cost operators such as QlikTech, Tableau, LogiXML, Pentaho and Jaspersoft you get an awful lot of BI software for $25,000. Conversely, most enterprise BI vendors don't traditionally get out of bed for deals of less than $50,000. Low cost (or 'free') BI software encourages trial and experimentation with little risk, and this is what most enterprises prefer. After all, BI project 'failures' are common.

Referring again to the graphic for “BI Has Hit the Wall”, Stephen Few sees that “the traditional BI software vendors and most of the industry’s thought leaders are stuck on the left side of the wall” – while the future of BI will come from more non-traditional BI solutions:

The software vendors that are providing effective data sense-making solutions—those that make it possible to work in the realm of analytics on the right side of the wall—have come from outside the traditional BI marketplace. Vendors like Tableau, TIBCO Spotfire, Panopticon, Advisor Solutions, and SAS tend to either be spin-offs of university research or companies that have ventured into the BI marketplace from a long history of work in statistics.

In a very interesting and thought-provoking Gartner Magic Quadrant for BI platforms, the analysts see significant changes in the solutions sought by enterprises:

…there is significant, if not euphoric, satisfaction with, and accelerated interest in, pure-play BI platforms. This is particularly true for smaller, innovative vendors filling needs left unmet by the larger vendors. To understand this paradox, it is necessary to consider a number of factors that are driving the BI platform buying decision today.

Other vendors to watch for new ways to perform and use BI / analytics include Lyzasoft, Predixion Software and GoodData. Lyzasoft and Predixion recently became partners for cloud to cloud analytics-as-a-service. GoodData provides BI PaaS to help speed up solution deployments.

BI SaaS adoption, while very low today, will grow steadily as maturing BI SaaS solutions are delivered in private and public clouds and in on-premises and off-premises configurations by trusted vendors. …innovative, pure-play vendors offering highly interactive and graphical user interfaces built on alternative in-memory architectures to address their unmet ease-of-use and rapid deployment needs. The perceived benefit is so compelling that business users are making this choice, despite the risk of creating fragmented silos of applications and tools.

Business users in particular showed a growing impatience with the time to deploy and complexity of traditional enterprise tools, which led to a rise in departmental buying of alternatives.

Collaboration and the Human Element

One newer area of interest for BI / analytics solutions is the inclusion of collaborative activities to add contextual and qualitative layers to the output of BI processes. To achieve authentic intelligence, contextual / qualitative layers can provide strong basis to test, fine tune and filter the artifacts of analytics. Analytics can benefit greatly from human filters that bring experience, knowledge, creative thinking. Context has a big role here: context for sources, context for outcomes, context for usage with other data points to achieve the best Intelligence for “making better business decisions”.

Collaboration is far more than distributing and sharing documents. It is interactive, inclusive, cross-enterprise. If collaboration is to be part of analytics, then iterative collaborative processes should be established throughout analytics cycles. Collaboration for analytics means bringing in disparate people to test assumptions, validity of data sources, accuracy and relevance of the outputs. These additional participants should provide a wealth of experience, complementary concepts and other essential data and perspectives. Having to prove the relevance and accuracy of analytics results to sympathetic as well as less sympathetic individuals should strengthen BI / analytic processes and projects.

The possibilities for new applications of analytics increase with collaboration. Inviting in many-to-many interactions also opens up processes to new ideas from participants. Gartner found that social venues and collaboration help to track and capture outcomes of the decisions made based on BI / analytics:

Gartner's user surveys show that improved decision making is the key driver of BI purchases. However, most BI deployments emphasize information delivery and analysis to support fact-based decision making, but fail to link BI content with the decision itself, the decision outcome, or with the related collaboration and other decision inputs. This makes it impossible to capture decision-making best practices. Solutions are emerging that tie BI with social software and collaborative tools for higher-quality, more transparent decisions that will increase the value derived from BI applications.

Vendors embracing collaboration as an essential part of BI / analytics include Lyzasoft, Predixion and Tibco Spotfire. Keep in mind that these vendors are all in early stages of building in collaboration as a significant aspect of their analytics solutions.

Analytics Aren’t Always Fun and Games

While there are very interesting analytics solutions that are “friendly” to business users, it is essential that safeguards are in place to ensure that business users understand what they are doing with analytic models and whether the resulting “intelligence” artifacts are correct, meaningful and useful. Collaboration with others who know the data, understand analytics, visualize the big picture, and so on, is one safeguard to ensure reliable analytics outcomes and correct usages.

In a particular enterprise, do enough people know what to do with analytics, both to start processes in meaningful ways and to audit outcomes to validate accuracy and relevance? Are users chasing the right problems or questions, providing the right data sources, including enough pieces? Do they have the understanding to work in a “big-picture” sense? Yes, analytics vendors should build in methods for validation, testing, guidance, but is that enough? Bob Warfield addresses this concern:

Few enterprises have the right analytical talent.

I was musing not long ago with VC and fellow EI Evangelos Simoudis that very few people actually know how to ask questions in a way that solves problems. It is something of a Sherlock Holmes conundrum. All the data is available. It is shatteringly obvious once someone connects the dots. Yet, very few know how to step across the stones that peek above the raging torrent of data to get to the other side where the answer lies without falling in and getting wet.

“You see Watson, but you do not observe.”

Beyond the traditional users of BI / analytics, there is an additional “challenge” to vendors to reach potential users who “need predictive analytics but don’t know it”. The challenge comes in two parts: first to find them and connect meaningfully with them; and then to provide guidance for every step of using the analytics solution to ensure proper outcomes. To connect with these “new” analytics users, vendors have to help them understand why they need analytics and how to use it. Self-serve training modules must be available for using the solution but also for understanding what analytics mean to the user’s role, industry and business needs. Detailed templates and best practices organized by industry scenarios are also important for success. It will be interesting to see how successful various vendors are for empowering such non-traditional users.

The Elephant in the Room: Reliable Structured Data

Although I’m not addressing data warehousing in this article, I do want to point out the need for basing any data-driven intelligence / analytics processes on reliable data. While it’s the right direction to provide analytics tools that work well for business users and increase ease-of-implementation and ease-of-use, diligence must be exercised to guarantee that data sources fed into analytic processes are trustworthy. Otherwise GIGO.

Teams comprised of IT and business must collaborate to create and maintain excellent processes for data profiling, data cleansing / quality, and data integration. The business users know how source data is used and the context for analytic processes. IT is the partner to help with the data profiling, data quality and integration steps. Data profiling tools can be used by business users to audit data sources, test for errors and/or for the lack of the right data, and to understand different data sources.

"Intelligence is nothing if not an institutionalized black market in perishable commodities"

A lot of data and content that matter for better “Intelligence for the Business” come with a short shelf life of significance. The new direction for many analytics solutions should bring this information more quickly into intelligence processes. When enterprises succeed in achieving richly integrated knowledge and context, authentic INTELLIGENCE is likely to result for “making better business decisions”.

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Disclaimer: Julie Hunt is not affiliated with any of the vendors in this article.

About the author: Julie Hunt is an accomplished software industry analyst, providing strategic market and competitive insights. Her 20+ years as a software professional range from the very technical side to customer-centric work in solutions consulting, sales and marketing. Julie shares her takes on the software industry via her blog Highly Competitive and on Twitter: @juliebhunt For more information: Julie Hunt Consulting – Strategic Product & Market Intelligence Services