In some ways, software products, salespersons and customers have always been like the people who design, sell or buy luxury houses or exotic cars.
The customer wants their big-ticket item delivered quickly and already customized and personalized for their needs and tastes. The builder likes standardization and uniformity to leverage scale. The engineer in the middle can build it all.
The compromise is modularity, where, to achieve scale, nearly all customers order 80 percent of what they need in the basic product and configure the rest with preferred options -- that hopefully exist. Big customers face a high cost of entry and exit by committing to own assets for a long time in order for them to pay off. Sometimes you just inherit these investments with your job.
This may all look obvious now, but it took a lot of enterprise-scale train wrecks for us to reach the maturity that enterprise software now works to improve on.
In a big business landscape, it works best when customers co-develop with their enterprise vendors. I had a sensible chat last week with Tom Peck and Rich Peters, who are respectively the CIO and the Global Director of BI at Levi Strauss Co. I was following up on SAP's announcement of a line of applications solutions they'd built up with many customers, Peck and Peters among them.
Levi Strauss's business has morphed into a three-channel beast of retail, wholesale and online, and already runs a lot of SAP for retail, supply and demand management along with some Business Objects and legacy SAP business intelligence.
Peck wants to see SAP build more integration with wholesale applications. "Very few companies like us don't play in retail and wholesale nowadays so we're giving them input and pushing them to go into sales in general, agnostic of channel."
Peters wants more sales analytics across all three channels and not just retail. The solution that Peck and Peters collaborated on allows SAP to bolt on point-of-sale information from non-SAP systems POS from other systems, "and that's where there's tremendous value," he says.
Mature vendors have to and want to be open-minded to collaboration with customers, as Peck says. "SAP does it as well as anyone, but they also shrink their cycle time of requirements testing and are more likely to hit customer needs the sooner people like us get involved."
Levi Strauss invests time and resources, gathers speed to market and maybe, a first right of refusal or a head start on competitors. "Maybe we'll get a software development kit early or maybe a discount point," Peck says optimistically.
It's a maturity model in part. Managers like Peck and Peters don't worry much about leaking intellectual property in the process because they know that's likely to be an algorithm or set of data they can easily sidestep. Probably 80 percent of what a vendor is going to deliver is going to be a commodity across competitors, something any collaboration-minded manager would be wise to keep in mind up front. "Give me a fast start I can use for my business and I'll innovate alone on the other 10 or 20 percent that will give me competitive advantage," says Peck
It took years for big vendors to overcome their initial reluctance to modularize platforms for consumption around a commodity chunk of capability at the center. It's still a temptation to oversell, but now sales has also gotten the memo.
"Partners like SAP or Teradata have been responsive enough to say where their roadmap and products fit or don't," says Peters, "and salespeople are starting to understand that customers are not going to buy everything in the world from one vendor." If they're smart they also know Levi Strauss doesn't want to work with 100 vendors and interfaces either.
"That's not cost effective or supportable," Peters says. "But the modular world, where you can pass information easily in a unified model, that's the line you're always walking."
It gives big vendors like SAP a reason to think about crossing borders, perhaps into POS, but no longer at the cost of underdelivering to customers. An SAP or Oracle can't merely promise middleware. Deliverables improved because companies are far more scrutinous than they used to be and there's a high probability that bad things will happen if customers are oversold or forced into cumbersome seat licensing agreements or denied options like hosted models.
"Sales folks are still rewarded on the size of the deal, says Peck, "and it is a shift in thinking. But for people like me and Rich, it's about the journey, and if I'm a vendor it's about the recurring cash flow, not the big deal, but the long-term relationship."
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