White Spaces in Enterprise Software
The second morning of the Enterprise Software Summit kicked off with a discussion of white spaces in enterprise software. At the turn of last century, Charles Duell, the Commissioner of Patents, urged President McKinley to the close the patent office because "everything that can be invented has been invented." Some delegates had felt the same way about enterprise software before the session.
That feeling was laid to rest by Ad Nederlof, Chairman of Genesys Telecommunications. Ad gave what I thought was one of the best
presentations in the four years of the Enterprise Software Summit. My takeaway from his presentation was that as long as
customers remain dissatisfied with the services they receive, there will be white spaces in enterprise software.
Ad is truly a global technology leader who feels equally at home in multiple countries and companies. By birth he is Dutch,
but lives in Belgium and works for a French-owned company headquartered in the United States. He sits on the boards of multiple
organizations, including a professional soccer team in the Netherlands and a Chinese technology
company. In between running these companies he has found the time to author a book, Customer Obsession, and the soon to be
released Customer Frustration. A tireless traveler, Ad only spends 10% of his time in the office.
At the Summit he presented his analysis of the results of a survey of 2,500 companies. The picture he presented should give
everyone in the industry pause, as there is much work still to be done to reach an acceptable level of customer satisfaction
and minimize the current high levels of customer frustration.
What Ad found doing research for his book is that even while 80% of CEOs claim customer service is top priority,
only 40% regularly survey their customers. Most executive managers do not ever visit customer service centers and
the average customer service agent gets only five hours management attention a month. So how much of a priority is
customer service? In the discussion that followed Ad's presentation, the group concluded that for the most part,
companies organize customer service for their convenience - not for the convenience of their customers.
For example, Genesys developed a product that gives a customer the following voice message: "The wait time today is approximately 15 minutes. We think this is an unacceptable amount of time for you to hold, so please hang up and we will call you at that time." Rather than waste the customer's time by putting them on hold, call centers can initiate the call. Yet only 10% of Genesys' customers have purchased this software.
Ad then moved the customer service conversation into a broader discussion on white spaces by remarking on trends he has noted, including the following statements.
While IT spending is still slow, the recovery in Japan and the U.S. is creating grounds for optimism. However, growth is primarily based on services, not license revenue.
Customers do not want to pay for what they will not use and up until today, companies were forced to purchase packages that contained many more features than were necessary on an individual basis. Ad also sees a disruptive business model growing out of experiments based on shared risk - one where the vendor is paid a percentage of cost savings.
With the problem of unused seats, unwanted features, and subscription models, it is evident things have changed in enterprise software. As Ross Mayfield, the CEO of SocialText, commented at the session, "You can't lock in customers any longer. That has become intolerable."
Cost containment pressures have led customers to look to other models, and offshore outsourcing and hosted services are booming
as a result. China today is developing a dozen major IT centers to focus on business process outsourcing.
What kind of role should governments play in outsourcing? According to Ad, the view outside the U.S. is that companies
must not be prevented by taxes or legislation from outsourcing. But more proactive involvement may be called for.
One example is provided by the Prime Minister of Latvia, who personally meets with IT investors to encourage their interest
in his country. Is this a role a U.S. President should play? In an increasingly competitive global IT marketplace, the answer
is clearly "yes."
Given the disruption in the enterprise software business model, where are the greatest innovations and opportunities in
enterprise IT? Some Summit delegates believe in the social networking model of computing is one area.
Advocates of social networking believe a fundamental shift in the nature of systems is occurring. Ross Mayfield explains
this shift by explaining how people reject traditional enterprise software and its rigid business rules. The top-down
approach of algorithms imposes more burden, not less, on customers.
On the other hand, business processes can become outdated almost as soon as they are implemented. When customers can't
change a process, they turn to an unstructured information network - which today is 99% email. New business practices
are being created by this approach. Social network has its origins in this bottom-up, organic approach to information
exchange. Blogs and wikis become the new pillars of the information network. The dense link structure provides a source
of knowledge in its own right and allows the best expertise to be identified more easily. Ross said,
"The biggest phenomenon is this bottom-up approach is in how the media has been upended by blogs."
An example, Google's social network Orkut was the fastest growing web site within five days of launch.
Ben Smith, Chairman of Spoke Software, echoed Ross on the power of this trend. In eighteen months, Spoke has secured 13 Fortune 500 customers, who are for the most part using the technology to leverage relationships in sales situations. Putting it in a nutshell, Ben said, "This ends the problem of cold calls."
So what are the limits to social networks? For one, Ben offered, privacy issues. "We allow users to discover a lot of data. We mine whatever you let us mine: email, IM, contact files. The real issue is we discover access to a lot of people who didn't want to be accessed."
So far, the privacy concerns seem to provide some limits to social network growth beyond the U.S. Privacy is a particularly
sensitive cultural and legal issue in Europe. Ad remarked that Americans' penchant for networking is not replicated
elsewhere, so social networks must be adaptive to gain traction globally. Nevertheless, copycats have already sprung up in
China, Russia, South Korea and elsewhere. And as the session moderator Bambi Francisco of CBSMarketwatch pointed out,
today's digerati teens will take to this to software quite naturally when they become professionals in just a few short years.
The hosted applications market is already recognized as one of the brightest lights of the enterprise software market.
As Mark Sunday, Siebel Systems CIO, pointed out, 95% of issues a CIO faces are either governance or legacy. A hosted
solution can eliminate those management burdens.
Furthermore, he explained, people today don't want a CRM system. They want dealer management, wealth management,
integrated content to cash capability, in other words solutions specific to their markets. Targeted vertical apps
represent another white space in enterprise software.
First 90 Days of Service is Free for Siebel CRM OnDemand
Siebel Systems and IBM are offering the first quarter of service free for customers subscribing to Siebel CRM OnDemand.
During the 90-day period, customers will receive free gold-level support, including 24x7 help desk access.
Siebel CRM OnDemand is the hosted version of the Customer Relationship Management System that enables companies and members
of their partner ecosystem to manage contacts, sales opportunities, marketing campaigns, and customer service requests.
"This offer represents a one-time opportunity to benefit from a solution delivered by the industry leaders in CRM and hosted
applications," said Keith Raffel, vice president, Siebel CRM OnDemand.
Novartis Canada Goes Live with Siebel Pharma
Novartis Pharmaceuticals Canada, a subsidiary of the Novartis Group, has standardized on Siebel Pharma Sales.
Working with systems integrator Skura and a Siebel technical account manager, Novartis completed the deployment
in just five months, rolling the system out simultaneously in both English and French. Since going live with Siebel
in October, sales force satisfaction with the system has risen to 90 percent.
"With Siebel, we've taken a huge step in making our vision of becoming one of Canada's leading pharmaceutical firms a
reality," said David Rylett, who served as the Director of Field Operations, Novartis Pharmaceuticals Canada at the time of
implementation of the Siebel system.
"We now have a common platform across all our sales units," said Daren Wilson, Manager, Sales Force Automation, Novartis
Pharmaceuticals Canada. "Everyone who touches the customer has a complete customer view."
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