The inimitable Tim Bray has an interesting little two-part musing titled Business Ignorance. Part product placement, the main concern of the article are thoughts and ideas on how to market and sell yourself in today’s business climate if you are a small, largely unknown software company. Tim happens to be in the business of managing information, but that is almost irrelevant to the arguments: there is a need, he has a product, so why isn’t it flying off the shelves?
He hits the issue on the nail when he says that
the problem is that right now, nobody wants to buy software. Right on. But, Tim, why do you then insist on selling them software? You can tweak your sales strategy all you want: you are still selling software. And as you say, nobody is buying software in this climate.
I would so hate to be a software vendor right now. You can give your software away, you can pay people to take it, and they still refuse. Why? I think there are a couple of reasons.
Businesses are much more focused on business problems than Tim maybe remember from the happy dot-com days. Then, it was about adding buzzwords to your corporate CV: yes, we are 101.7% Java, yes, we use XML since 1942…. Now its about how I retain my existing customers, how I launch new product faster….
It is very hard to convince a CEO, say, that the answer to his customer retention problem is a neat visualization tool. Why? Because it isn’t. The answer is a much bigger change, one that involves the business strategy, the organization and its people and their skills, and which affects the way the business operates across all its departments. It is about marketing and customer service, about product development and distribution, about culture and profit…. It is about the whole way the enterprise operates.
There may be some software components there to enable a new ways of working. There may very well be very large technology components required to make it happen. But Tim faces the hard sell of associating his software—which I’m sure is neat and useful, though I have no direct experience of it—with this much larger change. And that is hard. Very hard. You are working at the wrong level in the organization and your sponsors are not responsible for the over-all change, the change that the board would understand and be comfortable talking about.
I prefer to work at solving the business problems, brining in the technologies as and when needed. It seems to work better fro me, and better in the current climate. One strategy for Tim would be to try and align himself with some of the large consulting organizations—Accenture, KPMG, IBM, et al.—and use them as the sales channel. It has been done before, but I wouldn’t really recommend it. I have yet to meet a software company that was really happy with that approach and the large consulting organizations anyhow seem to be suffering more than most in the current climate.
Tim identifies a trend toward smaller, faster answers. Answers that score high on the 80/20 rule, that avoid
the deadly disease of completism. Answers that you can put to work fast, before the business landscape changes.
SAP, not a company famous for this, calls it “business agility”. That may be useful term, but what I’m thinking of here is a trend toward specialization and containment. The solution is increasingly a portfolio of solutions. Examples:
In the past, large change management projects, say a CRM or ERP project, would have been planned along the lines of “hire lots of consultants, go away for 18-24+++ months, then a miracle occurs and everything is wonderful.” Now, they tend to be structured as a portfolio of projects, each of short duration (1-3 months) and tackling a specific and identified business issue, but – and this is key – all tied together in a program of change so that each project is, and is seen to be, a step on the road to the long-term goal. Each project may be run by a different team or organization. Managing such a portfolio is more difficult than the old large projects for several reasons which I may make the subject of another article, but it works, it is accountable, and it is aligned with the way that businesses operate in the current climate
In the past, companies have often purchased a single solution. SAP is my ERP system, Siebel does CRM, everything runs on Oracle while Microsoft Office rules the desktop. Sun and EMC provide the Unix servers and Dell the PCs. There is one version of each operating system, one version of Office, and everybody runs off the same SAP and Siebel installation. Sorted! Partly because the big software vendors hasn’t really woken up the portfolio approach to projects, and partly because businesses are now scrutinizing their capital investments much closer (and realizing that the large solutions have traditionally been rather poor value for money), we are now seeing companies increasingly adopt a portfolio approach to their technology spending.
It is an interesting trend, a trend toward artisans—specialists doing one thing well, whether it is creating software or managing change. But it does leave a challenge that Tim does not go into in his article. For lack of a better word, it is a challenge of visibility. If the trend is to use smaller, specialized companies, then how do you find them? Yellow Pages (tm) will only take you so far.
SAP, which I mentioned earlier, has an obvious answer to the problem: slap a SAP logo on a lot of products and be a one-stop solutions house. Fair enough, as far as it goes, but is that really where the market is heading (Tim must hope not).
The industry analysts—Gartner, Forrester, Datamonitor, et al.—are all struggling: apparently nobody wants to buy their services. There are undoubtedly a lot of good reasons for this and I could mention a few but might get sued for slander. Let’s just observe that taking your solution recommendations from somebody who has zero stake in implementing those solutions is a difficult proposition.
The vendors could come clean and be honest and realistic about their products, but that’s like saying pigs may fly. There is probably a gap in the market for an independent forum or guide, maybe an annotated dmoz. But despite Tim’s optimistic assessment that “whenever there’s something that businesses need to get the job done, someone will figure out how to build it and sell it to them,” I have my doubts that this will happen. How can you be sue it is both independent and useful? How can you make money off it?
The best solution for the moment is probably to build relationships between specialist companies. Relationships that are about sharing honest information about products, solutions, business problems and -issues. One of the companies that I am advising has relationships with a number of other specialists, whether they are software companies, marketing organizations, designers, or provides other services or products. The key is that these relationships are completely transparent and non-commercial: we do not take any money from these companies, ever. But we do share information about the latest product developments, marketing trends, and issues that our customers face, and while we do sometimes end up working together on projects, that is a completely transparent process driven by the needs of our clients.
The downside is that maintaining many relationships is work intensive but that is the way of the future: it is all about how you are linked. Good luck to Tim and to all of us.