Posts Tagged ‘Monday’s Musings’

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Recent Conversations With Executives Confirm Demand For Social CRM
Order gleevec no prescription, Good news. Massachusetts MA Mass., Organizations see an opportunity to tap into the proliferation of social networking channels for their CRM initiatives.  Speaking with 23 business leaders over the past 10 days, it became obvious that Social CRM initiatives were top of mind for a few reasons:


  • Pressure from the boardroom. Social networking achieves top of mind status.  Board of directors have asked their executives to "look into the issue".

  • Success through internal pioneers, billig kaufen gleevec. Buy cheap capecitabine online, In every organization, a few Social CRM pioneers have emerged, ordering arimidex no rx. Cytoxan for sale, They kick-off small pilots, test the waters, billig kaufen casodex, Arimidex without a prescription, and fund new projects from their successes.

  • Fear of falling behind. Organizations that have survived the past two business cycles know that they need to respond to change or be changed.  e-commerce provided good lessons learned in how channels could transform business modes.


Social CRM Must Move Beyond 'Just Another Channel' Status

Bad news!  Most executives believe that Social is just another channel and often liken Social CRM to e-commerce.  Others felt this was just an extension of CRM with a social flavor.  Those that take this point of view miss the point because Social CRM:


  • Reflects a customer driven cultural shift, cheap evista without prescription. Organizations should realize that customer behavior has changed and social networking puts the power into the hands of the customer.  Conversations occur unfettered at a peer-2-peer level and proliferate as each new social medium emerges.  Organizations must influence not control.

  • Requires an internal transformation. Existing customer facing processes must adapt to these rapid changes.  Staff must be trained.  Management teams must build a good socialgraph and foundation (SCRM Use Case F1 - Social Customer Insights) to constantly reassess where to allocate and reallocate resources.   Organizations will have to invest in training and change management to tie back to existing CRM processes.

  • Realizes the limitations of and synergies with existing CRM solutions, order gleevec no prescription. Goedkope gleevec apotheek, Without accounting for new behaviors, patterns, ordering gleevec pill, αγοράσετε iressa, and processes, legacy CRM solutions lack a social design.  Built for automation, epogen without a prescription, Wisconsin WI Wis., most lack social relationship management features.  Social CRM will have to integrate back to legacy systems and master data management to succeed.  However, existing CRM solutions will need an upgrade.


The Bottom Line - All Social CRM Ecosystem Players Must Do Their Part

Social CRM requires significant organizational transformation for success.  In fact, Rabatt kaufen cytoxan, αγοράζουν online capecitabine, Social CRM projects can fail in the same manner as other CRM projects have in the past (via Michael Krigsman). However, the customers and the industry can ensure success through better ecosystem coordination.   Each side must describe and balance the holistic dependencies required for success.  For example:


  • Customers. With the most at stake, order gleevec no prescription, Rhode Island RI R.I., customers must acknowledge the upfront risks.  As pioneers, they must invest in the change management required for success, För arimidex online, Cheap gleevec, challenge the vendors on their promises, and push their system integrators to close the gap between vendor promises and customer requirements.

  • Advertising and marketing agencies, order epogen overnight delivery. Kjøpe zometa, Because the creative teams have mindshare with the CMO and line of business executives, care must be given to highlight the technology dependencies to existing systems and the constraints in today's technologies.  Many have been burned by previous promises from CRM.  Advertising and marketing agencies should partner with the social CRM vendors and system integrators to ensure that expectations can be fulfilled.

  • System integrators (SI's), Wyoming WY Wyo.. Order arimidex no rx, Often close to the CIO and IT side of the house, system integrators need to enable the requirements from the advertising and marketing agencies.   SI's should partner with the agencies to coordinate on proposals to deliver the technology that supports business vision and value.  Partnerships with the Social CRM vendors should focus on understanding road map, αγοράσετε arimidex έκπτωση, Ordering evista, direction, and vertical opportunities.

  • Social CRM vendors. Most vendors start with their purpose built best of breed solutions.  Over time these solutions will evolve into suites. In the meantime, social CRM vendors need to stay close to meet customer requirements, partner with system integrators on vertical opportunities, and work closely with the creative teams to understand emerging requirements.


Your POV

Share with us your successes in the Social CRM ecosystem.   You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity or better yet, join the community.

Please let us know if you need help with your Social CRM efforts.  Here’s how we can help:


  • Assessing social CRM readiness

  • Developing your social CRM  strategy

  • Vendor selection

  • Implementation partner selection

  • Connecting with other pioneers

  • Sharing best practices


Related resources and links

20100305 A Title Would Limit My Thoughts - Mitch Lieberman "Is Business Culture Required To Find Value in Social CRM?"

20100305 Research Report: Social CRM - The New Rules Of Relationship Management

20090831  Monday’s Musings: Why Every Social CRM Initiative Needs An MDM Backbone


Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

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Order cheap iressa online, Apps Users Seek Third Party Maintenance For Cost, Value, and Service

Updated surveys from inquiries, client conversations, and user group meetings show a 113.8% increase in interest in third party maintenance (3PM) services from Q3 2009 to Q1 2010 (see Figure 1).  Key factors stem from (see Figure 2.):


  • Continuing cost pressures. Louisiana LA, Budgets continue to be at flat or have been reduced.  Organizations must do more with less.  Add pressures to innovate, CIO's must find fat without trimming bone.

  • Gaining minimal value in maintenance services, West Virginia WV W.Va.. Buy arimidex online legally, Most felt they were paying too much for too little.  An 8 point jump reemphasized the issue with a lack of tiered offerings.

  • Declining plans to upgrade. Worsening economic conditions from Q3 2009 to Q1 2010 led a 27 point increase in interest in 3PM.  Expect many respondents to change their point of view (POV) as economic conditions improve.

  • Expecting better service, cytoxan ordine on-line. Kjøpe billig epogen, Service continues to play a key factor in decisions to go to 3PM.  Over 60% of respondents had experienced poor levels of service.

  • Slowing pace of vendor innovation. Greater than half of respondents believe their vendor has been too slow to deliver new capabilities, order cheap iressa online. These include SaaS deployment options or key functionality in areas such as strategic HCM and social CRM.

  • Disliking the vendor, Maryland MD Md.. Buy iressa, About 1/3 of the survey respondents have bad experiences with their vendor.  Many times it comes from sales person or support rep experiences.

  • Delivering self support. Almost 30% of respondents already provide their own support.  These organizations have no need to pay maintenance when they are doing all the work.


Figure 1, order arimidex without prescription. Order capecitabine online cheap, Interest in 3PM grows 113.8% over 2 quarters.

screen-shot-2010-02-20-at-44436-pm


Figure 2. Order cheap iressa online, Cost Pressures, Value, And Decision Not To Upgrade Drive Current Trends to 3PM

screen-shot-2010-02-20-at-44448-pm


Limited Options Exist For Most Enterprise Apps Customers

Of the 101 respondents in Q1 2010 interested in 3PM, Oracle (88.1%) and SAP (76.2%) users expressed the greatest interest in seeking independent services (see Figure 3).  Over 80% of the users were from large companies greater than 1000 employees across the globe.  Most SAP users surveyed have mixed environments with Siebel, JD Edwards, and PeopleSoft joint installations.  Unfortunately, very few public options exist for sole SAP users (see Figure 4).  For example, SAP customers can only turn to Rimini Street.  Oracle customers on PeopleSoft, JD Edwards, and Siebel also have limited choices with Rimini Street, netCustomer, and Spinnaker among the options.  IBM, Infor, Lawson, Computer Associates, Epicor, Microsoft Dynamics, Oracle E-Business Suite and database customers have no options.  (Note: This data may not be completely statistically significant given the sample size of 240, but hopefully it provides some directional input.)

Figure 3. Oracle And SAP Users Drive Interest In 3PM

screen-shot-2010-02-20-at-44457-pm


Figure 4, Illinois IL Ill.. Cheap zometa online without prescription, Very Few Public Options Exist For Customers

screen-shot-2010-02-20-at-100912-pm


The Bottom Line For Users - Users And User Groups Must Band Together To Guarantee 3PM Rights. Don't Take These For Granted, buy evista online. αγοράζουν online arimidex,

Although the latest surveys show a 17 point increase in the belief that 3PM is a right, this right is under fire by big vendors such as Oracle who have taken legal actions against 3PM providers for improperly (i.e, farmacia evista barato. TomorrowNow) and allegedly (i.e, order cheap iressa online. Um casodex online, Rimini Street) violating intellectual property rights.  If providers have violated such laws, Oracle rightfully should defend its positions and those providers be punished.  However, cheap gleevec tablet, Epogen pill, there's a lot of money at stake.  For most vendors, maintenance represents 50% to 80% of their revenue stream.  Consequently, iressa without a prescription, Nebraska NE Nebr., users and user groups have a responsibility to:


  • Demand that their contracts include provisions that protect their right to 3PM

  • Require vendors to work out rules on how 3PM providers can deliver services without violating software IP provisions

  • Seek anti-trust class action with the US DOJ (i.e. Christine A, cheapest zometa price. Washington WA Wash., Varney) and the EU Compeition (i.e. Joaquín Almunia) against software vendors who hinder 3PM providers from providing services


Users and user groups must vigorously defend their positions in contracts and legal action or lose this right.  Failure will result in a continued software maintenance monopoly.  Success will ensure market competition and renewed innovation.  Attention: OAUG, District of Columbia DC D.C., Order epogen online, Quest, and SUGEN leadership your members need your help, Hawaii HI.
Figure 5.  A Growing Body Of Users Believe 3PM Is A Right

screen-shot-2010-02-20-at-44509-pm


The Bottom Line For Vendors - Proactively Address The Issue Or Expect A Groundswell Of Activism
Order cheap iressa online, SaaS, subscription pricing, 3PM, and the economy provide a confluence of forces that will continue to attack maintenance revenue streams.  Many legal cases have been fought over this issue including IBM vs Amdahl and Geac vs Grace ConsultingSAP's failed attempt to convince customers on the value of Enterprise Support led to a public relations disaster and a factor in the resignation of their CEO.  The result - many vendors considering price hikes held back.  In fact, some savvy software vendors retooled and restored the client -vendor relationship by:

  • Offering more entry points and tiers to support options. Ostaa halvalla evista, The three pillars of software maintenance and support policies still apply.  However, several vendors are now offering more tiers of support as lower entry points.  Two vendors have finalized plans to offer just the bare bones legal and regulatory updates.  Other vendors have made it easier to come back with maintenance amnesty plans.

  • Providing flexible maintenance policies. Vendors who change rigid policies have experienced success among customers.  Some Both Infor through Infor Flex and Micrsoft Dynamics allow like for like swap credits to migrate between existing products.

  • Renegotiating existing terms. Some vendors are helping clients meet the realities of the current market conditions. Big on the list is helping clients address shelf ware without repricing of contracts.  For clients who paid full maintenance on software that’s at least 4 years old, some vendors are offering to reduce up to 20% of the overall licenses not in use.  This leads to lower maintenance revenue but engenders good will among key clients.  Further, several vendors have allowed clients to apply credit towards another module as an alternative.

  • Delivering amnesty programs. Several vendors have allowed customers to return to maintenance programs after years of not paying.  Such programs play a key role in helping customers upgrade but should be used sparingly as customers may become accustomed to this practice.

  • Creating better peer forums to share information. Almost every vendor surveyed has a program to improve the online support capabilities.  Applying Social CRM use cases,  user generated content in peer forums tops the list of initiatives.  Other plans focus on sharing data on benchmarks, operational metrics, and best practices.

  • Assisting with vendor financing, order cheap iressa online. Clients seek access to financing, especially many in the mid-market who’s credit lines have been zapped.  Microsoft has led the charge by providing 0% financing for its Microsoft Dynamics ERP and Microsoft Dynamics CRM Customers.  Other vendors such as IBM, Infor, Oracle, SAP, Sage also offer vendor led financing programs that include hardware, implementation, training, and other services.

  • Lowering cost of usage and ownership. Though tops on the list as a conceptual practice, most vendors will need to roll out such initiatives over the next 24 months.  A few notable exceptions include Agresso with its VITA architecture which allows customers to rapidly make business and UI changes, Microsoft Dynamics customers who report back significantly lowered implementation and training costs compared to most vendors, and Epicor customers who report significant productivity gains with Service Connect.  SaaS customers already experience such gains.


Your POV

Take the new and improved survey on 3rd party maintenance and let us know if you need help with your enterprise apps strategy by:


  • Conducting an ROI on 3rd party maintenance options

  • Identifying cost reduction opportunities

  • Renegotiating your software contracts

  • Improving innovation via SaaS and other deployment options


Please post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.
Related resources and links

20091008 Deal Architect - Vinnie Mirchandani "Third Party Maintenance Is Really 4 Decades Old"

20071120 News Analysis: Too Early to Call the Death of Third Party Maintenance

20090210 Tuesday's Tip: Software Licensing and Pricing - Do Not Give Away Your Third Party Maintenance And Access Rights

20090709 Tuesday's Tip: Do Not Bundle Your Support and Maintenance Contracts.

20090622 News Analysis: Infor Flex Reflects Proactive Maintenance Policy

20090516 News Analysis: Rimini Street Launches Third Party Maintenance for SAP

20090504 News Analysis: Oracle Waives Fees On Extended Support Offerings

20080909 Trends: What Customers Want From Maintenance And Support

20080215 Software Licensing and Pricing: Stop the Anti-Competitive Maintenance Fee Madness

20090428 News Analysis: SAP and SUGEN Make Progress on Enterprise Support

20090405 Monday's Musings: Total Account Value, True Cost of Ownership, And Software Vendor Business Models

20090330 Monday's Musings: It's The Relationship, Stupid. (Part 2) - Stop Slashing The Quality Of Support And Maintenance

20090324 Tuesday's Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

20090223 Monday's Musings: Five Programs Some Vendors Have Implemented To Help Clients In An Economic Recession

20081012 Monday's Musings: 5 Steps to Restoring Trust in the Vendor - Customer Relationship

20100114 News Analysis: SAP Revives Two Tier Maintenance Options

20091012 Research Report: Customer Bill of Rights - Software-as-a Service

20090912 News Analysis: Siemens Cancels SAP Maintenance Contract

20090910 Tuesday's Tip: Note To Self - Start Renegotiating Your Q4 Software Maintenance Contracts Now.

20090602 Tuesday’s Tip: Now’s The Time To Consider SaaS Software Escrows


Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved.

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Gains In SaaS Adoption Driven By Speed And Cost Savings...

Preliminary data from Q4 earnings data show continued traction among SaaS solutions.  Expect SaaS deployments to gain steam in 2010 as organizations finalize their SaaS apps strategies to take advantage of 7 key benefits:


  1. Richer user experience - Buy cheap arimidex online, SaaS apps bring Web 2.0 usability to the enterprise world through rich internet applications using Adobe Air, HTML 5, Microsoft Silverlight, and other tools.

  2. Rapid implementation - SaaS applications focus on configuration and integration, not hard core implementation.  Users can be up in weeks, not months.

  3. Frequent cycles of innovation - At present, most vendors introduce new functionality, enhancements, and bug fixes on frequent refresh cycles.  Some vendors provide as frequent as weekly updates, others - seasonal.

  4. Minimal upgrade hassles - Users focus on minimal testing scenarios and receive updates all at once.  In applications with significant regulatory and tax updates, SaaS applications reduce the cost of compliance by as much as 77%.

  5. Always on deployment - Organizations can expect average up-time levels at 99.95% or higher for most applications.  These results often exceed existing on-premise performance.

  6. Subscription pricing - Subscription pricing reduces the capital burden of common on-premise payment models.

  7. Scalability - Organizations can add or subtract users as needed without worrying about procuring new hardware and other infrastructure.


Moreover, latest Information Week Analytics survey reaffirms several key benefits of SaaS adoption - time to market and cost savings (see Figure 1).

Figure 1, purchase capecitabine online. Acheter capecitabine, Information Week Analytics Survey Confirms Trends In Adoption

Information Week Analytics 2010 SaaS survey

...Yet, Aggregated Information Provides The Differentiated Value To Clients

Despite the obvious benefits with SaaS deployments, buy zometa without prescription, Nebraska NE Nebr., three hidden advantages will emerge with market maturity:


  • Benchmarking. SaaS vendors sit on a tremendous treasure trove of data.  Participating organizations could opt-in to share secure and masked information for the purposes of business optimization.

  • Trending, köpa casodex. Order casodex no prescription, Organizations could also opt-in to identify larger market trends.  Trending information could be used to help organizations with planning.

  • Prediction. More sophisticated organizations will take SaaS vendor trending data and design new algorithms to support predictive analytics.  The richness and consistency of the data set will improve accuracy.


The Bottom Line For SaaS Vendors - Create Additional Value As An Information Broker

The end game for SaaS vendors may not be a re-creation of the on-premise world in the Cloud.  In fact, those vendors with a true multi-tenant SaaS model may turn out to find additional revenue streams as information brokers.  Expect demand for premium information-on-demand services to begin with benchmarking and evolve to prediction.  For example, imagine the benefits gained by organizations who consume the latest buying behavior data from their CRM vendors.  Organizations could turn to HCM vendors for geographical salary or hiring trends.  Customers of financial vendors could better predict credit risk factors.  A key requirement - customers must trust their SaaS vendor's data ownership and privacy policies before the industry makes this transformation.  With acceptance, vendors will have more reasons to move to a SaaS offense.

The Bottom Line For Organizations - Determine Your Data Rights Before You Sign The Contract

Organizations in SaaS deployments will want to preserve the their data rights and minimize their cost structures to consume aggregated information.  A few key areas should be considered:


  • Data usage, buy cheap arimidex online. Organizations generally assume that the data belongs to the organization while the software belongs to the SaaS vendor.  To be safe, South Carolina SC S.C., Capecitabine cheap, organizations will want to be clear that rights to use data will require an organization's permission.  In addition, the disposition of data should be made clear

  • Data access, buy zometa cheap. Bestill iressa online, Organizations should expect unhindered access to raw data, queries, order gleevec online without prescription, Order iressa, and extraction.  Access to data should not require additional fees.

  • Aggregated data cost. Organizations participating in aggregated data programs should be given preferential treatment not only in cost, Massachusetts MA Mass., Kjøpe capecitabine online, but also access to data.  The cost of this "stone soup" approach should be factored in pricing.


Your POV

Where are you in your SaaS deployment.   Have you thought about these long-term benefits, arimidex online store. Buy cheap arimidex online, Looking for assistance with crafting, validating, or reviewing your SaaS Apps Strategy?  Do you have a different point of view. Ordering iressa without prescription, Please post or send on to rwang0 at gmail dot com or r at softwareinsider dot org and we’ll keep your anonymity.

Other Useful SaaS Strategy Links

20091222 Tuesday's Tip: 10 Cloud and SaaS Apps Strategies For 2010

20091012 Research Report: Customer Bill of Rights - Software-as-a Service

20090602 Tuesday's Tip: Now's The Time To Consider SaaS Software Escrows

20081028 Tuesday's Tip: SaaS - Integration Advice

20090714 Sandhill.com - R 'Ray' Wang - "Opinion: Moving to a SaaS Offensive"

20070903 Trends: What's all the fuss about True SaaS, Texas TX Tex., Buy evista without prescription, OnDemand, Hosting, iressa no prescription. Kjøpe epogen online,

20091208 Tuesday's Tip: 2010 Apps Strategies Should Start With Business Value

20091109 Monday's Musings: SaaS, SOA, casodex pedido en línea, Utah UT, Integration and How To Make A Peanut Butter And Jelly Sandwich In The Cloud


Copyright © 2010 R Wang and Insider Associates, LLC, New Jersey NJ N.J.. Kansas KS Kans., All rights reserved. Order arimidex no prescription.

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Monday’s Musings: 10 Essential Elements For Social Enterprise Apps

Convergent trends fuel the push for new business solutions and platforms The future of enterprise software is evolving from web-based apps, business process platforms, and service-enabled products; to a new class of more connected, social, and collaborative business software solutions.  This transformation comes from advances in the Web 2.0 world and a growing realization that business solutions must reflect how people actually perform work.  These trends point to a convergence and expansion of 10 mega themes:
  1. Evolution versus revolution
  2. Top down versus bottom up
  3. Reactive versus proactive
  4. Transactional versus behavioral
  5. Strategic versus tactical
  6. Horizontal versus vertical
  7. Individual versus community
  8. Company versus customer
  9. B2B versus B2C
  10. Data generation versus data analysis
Future business solutions and platforms will expand beyond Enterprise 2.0 and the knowledge worker After much digestion of what's happening in the various Enterprise 2.0 models, (e.g. Dion Hinchcliffe's FLATNESSES mnemonic) and studying the Social CRM market, (e.g. CRM Magazine's June 2009 "Social Media Maturity Model"), what's next for business solutions or enterprise apps appears to be something bigger than usability, collaboration, social media, mobility, and technologies for the knowledge worker.  Enterprise 2.0. as defined by Andrew McAfee in his April 2006 MIT Sloan Management Review, touches on a world of emergent, free-form, collaboration that bring such Web 2.0 tools to the enterprise.  This definition provides a solid basis for building on key concepts in this emerging class of software solutions and platforms.  In fact, this new category moves beyond today's Enterprise 2.0 definition and most certainly beyond the three letter acronym world of ERP, CRM, HCM, PBS, SCM, etc. Ten elements define this next generation of enterprise business software solutions Recent conversations with software vendors, industry luminaries, and customers highlight 10 elements required for future solutions (see Figure 1.).  These elements include dynamic user experiences, business process focus, and community connectedness across 10 elements:
  1. Role-based design. Software designed around how users perform work including applicable security models.
  2. Consistent experience across channels & deployment options. Software that is agnostic to where or how that software is deployed and accessed.
  3. Contextual & relevant delivery of information. Software which understands what information to provide users at a point in time
  4. Configurable & adaptive. Software that can be modified to meet changing conditions.
  5. Outcome-focused & results-oriented. Software that tracks key metrics across an end to end process.
  6. Proactive, predictive, & actionable. Software that anticipates requests and supports decision making.
  7. Engaging for all stakeholders. Software that opens up the system to new types of users, collaborators, networks, and communities.
  8. Pervasive & natural collaboration. Software that embeds knowledge worker skills into existing work flows.
  9. Self-learning & self-aware. Software that tracks preferences and identifies patterns for future correlation.
  10. Secure & safe. Software that meets security and disaster recovery thresholds.
Figure 1. 10 Elements Of Social Enterprise Business Solutions and Platforms
[caption id="attachment_2929" align="aligncenter" width="820" caption="Source: Software Insider's Point of View - 10 Elements Of Social Enterprise Business Solutions and Platforms"]10 Elements Of Social Enteprise Apps[/caption]
The bottom line - customers ready to transition must align with the right hierarchy of needs and design an apps strategy
Many surveys and studies about software budgets show that organizations devote 2/3's to keeping the lights on and 1/3 to new projects and innovation.  In order to pave way for these new connected, social, and collaborative business software solutions, clients will have to fund these investments via apps strategies that deliver efficiency and massive reduction of costs.  These strategies will require a focus on business process optimization, technology strategies, and ecosystem leverage.  Form must follow function. Your POV. What elements are missing from the 10 for Social Enterprise Apps?  Do we have the right name for these solutions?  If not, what category of software should we be calling this?  Need assistance in crafting your future apps road map and strategy? Please post your comments here or send me a private email to rwang0 at gmail dot com or r at softwareinsider dot org. Copyright © 2009 R Wang. All rights reserved.

Monday’s Musings: Users Now Expect More Advocacy From Their User Groups

Many user groups currently meet the basic requirements... Today's independent and vendor sponsored user groups serve a key role in building community among a common interest group.  Typical mission and objectives often include:
  • Creating an environment to share information and best practices
  • Exposing issues and limitations with a vendor's product and partner solutions
  • Soliciting member feedback and concerns about vendor and other solution providers
  • Leveraging collective power to influence the product road map of the vendor and other solution providers
  • Facilitating networking opportunities for a vendor's greater community and ecosystem
  • Educating members on new capabilities
  • Creating a forum for the vendor and other providers to discuss new initiatives.
...yet market needs creates demand for stronger leadership on key issues Comparisons of the November 2008 survey with the latest July 2009 update show that user group members seek greater assistance (see Figure 1).  In fact, rapid vendor consolidation, continual economic pressures, and high pressure sales tactics increase membership demands that user groups increasingly serve as client advocates in working with the vendors.  Key trends from the 2009 H2 191 respondent survey show sharp shifts such as:
  • ~52% increase to negotiate license discounts
  • ~50% decrease to communicate vendor news and updates
  • ~30% increase to address product issues, bugs, enhancement requests
  • ~24% increase to fight for maintenance fee reductions
  • ~22% increase to influence product road maps
Other interesting trends include:
  • ~10% decrease to liaise with software vendor executives
  • ~7% increase to deliver training and educational sessions
  • ~5% increase to benchmark performance
  • ~4% increase to share product and technical knowledge
  • ~3% decrease to provide recruiting opportunities
  • No change to facilitate peer networking opportunities
    Figure 1. Users Now Expect More Advocacy From Their User Groups [caption id="attachment_2827" align="aligncenter" width="850" caption="Source: Software Insider's Point of View User Group Survey - Copyright © 2009 R Wang. All rights reserved."]Users demand more action from user groups[/caption]
The bottom line - users need to play a more active role in both good and bad times Beyond paying the membership dues, user groups are only as successful as their active membership.   The challenge - strike a good balance in meeting membership needs and involving the membership in participating in key initiatives.  As users, now's the time to play a key role in transforming the user groups to meet key requirements and putting one of the best checks and balances in play.   Get active, get engaged and ask key questions to find out how effective your user group is? Some key questions user group members should ask:
  • How well does the user group align with my organization's key initiatives?
  • Is the user group business model aligned with the ability to advocate for the membership?
  • Does the user group have the leadership to publicly and privately raise issues with the vendor?
  • Do officers in the user group receive special privileges for their companies that members may not be privy to and how does that influence their ability to advocate on behalf of the membership?
  • How much say does the vendor have in the user group's decision making?
  • How independent is the user group?  How much money is received from the vendor versus outside sponsorships?  How does that money impact decision making?
The bottom line - vendors can proactively add value by addressing shifting requirements Strong user group leadership teams quickly respond to changing membership needs and leverage the power of the users and clients to publicly and privately create checks in the balance of power.  The goal - improve the vendor-client relationship via the influence of the membership.   Savvy vendors can address the enhancement request issue, product road maps, and performance benchmarks by:
  • Dedicating executive resources to user group initiatives
  • Increasing transparency in the requirements prioritization process
  • Creating resources to share benchmarking information
  • Reporting more frequently on progress.
Your POV. Do you feel your user group has given you value?  What are you looking from your user group? As a user what would you like to see from your user group?  Are you a software vendor trying to design better user group programs?  Would you like advice on how your program compares?  Feel free to share your experiences here or send me a private email to rwang0 at gmail dot com or r at softwareinsider dot org. Copyright © 2009 R Wang. All rights reserved.

Monday’s Musings: Why On-Premise Vendors and SI’s Should Go on the Offense with SaaS

On-premise vendors still see SaaS as a loss leader due to huge ramp up and punishing revenue recognition rules When it comes to the topic of SaaS, many on-premise vendors appear to be living in denial, hoping that SaaS fails, and/or creating confusion in the market place.  These tactics have merit as a shift to SaaS requires plenty of work with minimal return and a destruction - disruption of the current business model.  In conversations with 61 vendors and building off of SaaS evangelist Jeffrey Kaplan's post (July 2, 2009, Seeking Alpha - "From the Vendor's Point of View: Why SaaS Sucks"), vendors who have made this transition or have started the investment put in heavy lifting in these activities must:
  • Re-architect apps
  • Find balance between configuration and optimization of SaaS platform
  • Design product road map and rollout strategy
  • Determine SLA's
  • Identify a hosting strategy
  • Craft pricing and licensing policies
  • Harmonize SaaS pricing with On-premise and other models
  • Create go to market strategy
  • Alleviate channel conflict with partners, resellers, distributors
After all this work to be ready for SaaS deployments, vendors also discover that FASB SOP 97-2 software revenue recognition rules prohibit them from immediately recognizing multi-year contracts. Even worse, subscription revenue can only be recognized on a month-to-month basis - leading to a long road to profitability.  In fact, vendors such as Lawson, estimated a 7 to 10 year break even period for a full SaaS model.  No wonder Harry Debes was fired up on how SaaS could be a fad in his interview with Victoria Ho at ZD Net last year.  In private, most software executives also echo such sentiments and wholeheartedly agree with his comments about the business model challenges. Yet, SaaS adoption moves beyond the Tipping Point in 2009 However, the confluence of recessionary forces, stalled innovation from many on-premise software vendors, and success of early SaaS pioneers such as SalesForce.com and NetSuite has put Software-as-a-Service into the mainstream.  Vendors can no longer resist the move to SaaS without negatively impacting their license sales and customer mind share.   Additional facts highlight the shift:
  • Forrester State of Enterprise Software 2009 survey results confirm significant adoption rates from 2008 to 2009. Of 1000 IT executives and decision-makers, 24% were interested/considering, 11% implemented or planning to expand, and 5% piloting SaaS solutions (see Figure 1).
  • Clients continue to vote with their budgets despite marketing FUD by many on-premise vendors on the perils of SaaS. Success Factors' win at Siemens for 420,000 employees, Workday's win at Flextronics for 240,000 employees, and Ultimate Software's win at P.F. Chiang's for 30,000 employees reinforces how SaaS is more than CRM and SMB.
  • Concerns over SaaS have dropped significantly over the past year. Successful deployments mitigate concerns and highlight the attitudinal shift towards acceptance.  Major decreases include integration issues (43%), total cost (31%), lack of customization (31%), complicated pricing models (30%), performance (23%), can't find the specific application (20%), security (17%), and lock in with existing vendor (17%) (see Figure 2).
Figure 1: Users expect to increase SaaS adoption in 2009 saas-deployment-2009 Source: Forrester
Figure 2.  Concerns over SaaS have dropped significantly over the past year 2009 Enteprise and SMB Survey - SaaS Concerns Declinet Source: Forrester
Defensive SaaS strategies by vendors miss the opportunity to take market share. As customer's continue to demand SaaS solutions for rapid deployment, pay-as-you-go pricing models, and timely innovation, traditional on-premise vendors without a SaaS offering must now explain, defend, or develop their own SaaS story.  Concerns about the impact of SaaS have many vendors in defensive mode.  Defensive strategies have included:
  • Creating counter marketing about SaaS and the viability of the market
  • Responding with hosting options and financing options
  • Building SaaS options for a limited set of popular SaaS solutions such as sales force automation (29%), strategic HCM (29%), and customer service and support (27%) (See Figure 3.)
At first glance, mega vendors such as SAP and Oracle have started with the first two points and are evolving to the third.  They aim to counter the success of Ariba, SalesForce.com, Success Factors, Taleo, Workday, and Ultimate Software with their own offerings.  SAP's OnDemand for LE release and John Wookey's ComputerWorld UK interview by Mike Simons, confirms that the strategy will include "CRM on-demand and e-sourcing, with expense management set for a 2010 release."  Wookey's approach appears to first shore up areas where SAP customers have been defecting and then worrying about what's next (see Note 1).  Meanwhile, discussions with Oracle product teams also hint that a release of 5 to 9 SaaS offerings to complement Oracle Siebel CRM OnDemand offerings could be announced soon.  This defensive strategy shores up competitive SaaS solutions such as incentive comp, procurement, and strategic HCM.
Figure 3.  Rate of adoption of key SaaS solutions show significant interest in CRM and other areas 2009 Enterprise and SMB Survey SaaS Interest Areas Source: Forrester
The bottom line -SaaS gives software vendors and system integrators an opportunity to take market share. Instead of playing defense, vendors should look at the opportunity to take market share through SaaS.  SaaS vendors and their investors have realized they can target any install base and win by providing compelling functionality.  Why shouldn't on-premise vendors bite the bullet and go on the offense?  To make this work software vendors would want to take advantage of their partner ecosystems and customers to extend capabilities beyond what's being delivered in on-premise.  Vendors must make an initial investment in a SaaS/PaaS platform, agile development methodologies, and integration technologies to support hybrid deployment options.  From there, white spaces in the product road map will provide direction into the future opportunities such as vertical and other pivot points that have not been well served.  SAP's acquisition of Clear Standards for carbon compliance, NetSuite's acquisition of OpenAir for project based solutions, and Intuit's acquistion of Entellium for CRM highlights examples of going on the offensive with SaaS.  Of equal importance, system integrators can shift the balance of power and deliver new IP via SaaS solutions while reducing their dependency on the mega vendors.
Recommendations: 7 best practices for crafting a SaaS strategy at an on-premise vendor Imagine you could start from scratch and build a new software company.  That's the question I posed to 61 software executives this year.  Most stated they would start with a SaaS deployment option for the scale and the business model.  Now what to do if you are an on-premise vendor?  Answer - build a separate SaaS software division within an on-premise software company.  This could be the next trend among the on-premise vendors for both investment and revenue recognition reasons.  What would be a good strategy:
  1. Reuse similar business process parts as the on-premise product
  2. Harmonize the data model and common objects
  3. Build a brand new RIA based UI and UX
  4. Assume that all data sources will be heterogenous
  5. Design the product to run stand alone
  6. Attack white spaces of new growth in a competitor's install base
  7. Keep a PaaS platform in mind to attract partners and customers to extend the solution
Your POV. Totally turned off by SaaS? In the midst of a SaaS strategy? Ready to embark on a SaaS strategy?  If you need assistance, don't hesitate to reach out?  Please post your point of view here or send me a private email to rwang0 at gmail dot com. Note 1: The large enterprise (LE) SaaS platform will not come from NetWeaver or SAP's SME Business by Design (ByD) technology, but come from the acquired Frictionless platform.  While this may leave some SAP customers concerned, Wookey and product super stars Kevin Nix and Peter Lim (of Siebel fame) counter by highlighting where SAP components will be reused and highlighting the home base integration advantage.
As also seen in the July 14th, 2009 SandHill.com"Moving to a SaaS Offensive"
Copyright © 2009 R Wang. All rights reserved.

Monday’s Musings: Industry Vertical Pivot Points Still Matter Most

Pivot points represent a market segmentation approach used by many companies to determine market demand, define new products, assign sales territories, service customers, and put boundaries around customer sets.  Since September 2009, over 500 enterprise software decision makers were asked which one pivot point would they prefer their software vendor focus on.  The four key pivot points include market segment, geography, industry, and role.  To elaborate:
  • Market segment - standard definitions of size whether it be by revenue (e.g. $0-249M, $250-499M, $500-999M, $1,000-4,999M, $5,000-9,999M, $10,000-19,999M, >$20,000M)  or by employee count (e.g. 0-49, 50-99, 100-249, 250-499, 500-999, 1000-2499, 2500-4999, 5000-9999, 10,000-19,999, 20,000-49,999, >50,000).
  • Geography - physical and cultural location of where primarily business is conducted (e.g. North America, South America, Latin America, Western Europe, Eastern Europe, CIS, Middle East, North Africa, Africa, India, Greater China, APAC, Oceania, ANZA, etc.)
  • Industry - industry expertise or vertically related business functions often generated by SIC code or broad categories (e.g. Discrete Manufacturing, Process Manufacturing, Retail/Wholesale Distribution, Services, Public Sector, Healthcare/Life Sciences)
  • Role - classification by job functions and titles (e.g. CEO, COO, CFO, CMO, VP of HR, VP of Security, Architect, Chief Legal Officer, etc.)
Respondents were forced to choose the one pivot point they felt would be most relevant to their needs.  The results are as follows:
Pivot Point Preferences

(Survey of 527 enterprise and sme/smb software decision makers from phone, tweets, email, and in-person interactions from September 2008 to June 2009

The bottom line - end users should demand vertical expertise The message resonates loud and clear - users seek more vertical expertise from vendors.  Making minor extensions to support an industry may not be enough in today's market.  As industry requirements increase and require software solutions to provide support, end users must demand greater levels of innovation and investment into vertical specific requirements.  Given how much money has been spent on maintenance and support, end users should take an active role in building the right level of dialogue with vendors:
  • Request to join customer advisory boards. Often customer advisory board members have insight into the product direction and future functionality decisions.  Some vendors such as SAP, Oracle, Lawson, and Microsoft hold regular advisory board meetings with end users, senior management, product teams, and analysts to define, prioritize, and test requirements.  These meetings often result in a status report on priortiziation and progress in delivering the requested functionality.
  • Influence existing user groups. User groups may already provide industry specific forums where the vendor and the end users have existing channels of dialogue.  Determine how quickly it has taken a vendor to deliver on promised functionality.  If it's been more than 12 months and its a common request among 80% of the users, then it's time to rally the end users for some change/
  • Rally around industry trade groups. Take the time to see what standards have been set by industry trade groups.  As vendors modernize their software architectures to support web services and SOA, trade groups could provide a key opportunity and forum to define common business process, architecture, and meta data standards.
The bottom line - vendors should keep focusing on verticals and micro-verticals By a 3 to 1 margin, software decision makers resonate most with verticals.  This continues a trend where customers seek deeper functionality by verticals and micro-verticals in their solutions.  Vendors should take the following 5 actions to improve vertical relevance:
  • Focus on a select number of verticals based on vendor size. Most software vendors under $500M have the bandwidth to focus on 3 to 5 verticals while those between $500M and $1B can handle 7 to 9 verticals.  Agree on what you will not be focused on and treat other sales as opportunistic.
  • Build a road map of capabilities that should be part of the vertical solution. Identify the complete functionality of business processes that should be supported.  Include both internally built and externally provided solutions.
  • Identify solution centric ecosystem ownership. Given the myriad of combinations and customer requirements to deliver the last-mile solutions, not one single software vendor can deliver all aspects of a solution.  Determine what part of the value chain will be delivered, externally sourced, or provided by a partner.  Keep in mind some customers may choose to extend on your platform as well.
  • Enable easy access and extension of the core platform. Design the solution with partnership and extension in mind.  Ecosystems provide the fastest way to build adoption of your software. As users and partners add IP and innovation to the core product, vendors gain natural barriers of entry and exit in a specific vertical and micro-vertical.  Customers may also seek to band together to build solutions or have a partner extend and industry solution for them.
  • Tie the pivot points together. One final point - don't make the mistake of just focusing on a vertical or one pivot point.  Take the time to cross segment by the other pivot points.  Vendors often find that these verticals may not fit as neatly across the board and that's okay.  Some solutions such as risk and compliance may have inherent appeal across a role such as a CFO and span verticals.  Keep in mind pivot points provide a guide but use common sense when building natural segments.
Related research of interest May 7th, 2007 "Solutions-Centric Ecosystems Disrupt The Enterprise Software World Order" August 22, 2007 "Avoiding Failure In Technology Partnerships" September 3, 2008 "How To Select A Software Partner Solution Offering"
Your POV. Got a similar view on pivot points?  Disagree on this assessment? As an end user which pivot point matters most to you and has your vendor delivered?  As a vendor, have you started to focus more on industry verticals? Identify yourself as a vendor, end user, media professional, etc.  To learn more about how to build your solution centric ecosystem, design a partner program, or extend your industry vertical strategy, feel free to reach out.  Post here or send me a private email to rwang0 at gmail dot com. Copyright © 2009 R Wang. All rights reserved.

Monday’s Musings: It’s The Relationship, Stupid (Part 5) – Living In Denial

Economic Downturn Challenges Enterprise Software Executives To Uphold The Sanctity Of The Vendor - Customer Relationships Conventional wisdom would assume that in a challenging economy, strong relationships would be a key success factor to retaining business and mitigating loss of revenue.  Unfortunately, this does not appear to be the case for many companies, including vendors in enterprise software.  Blame it on the economy, fear of depending on their people, or plain greed, but a good number of executives have taken an approach that attempts to preserve shareholder value at the expense of their vendor - stakeholder relationships (i.e.employee, customer, and partner).  Now in their defense, these muckety mucks face dire times and hard decisions need to be made.  However, they are not in a unique situation and risk jeopardizing brand value, trust, and market credibility for short term gain. Let's look at five common value destruction strategies:
Part 5: Living in denial by ignoring stakeholders Successful relationships often span across key stakeholders that include partners, employees, suppliers, investors, and of course customers.  Lately, management teams at enterprise software vendors have chosen to placate investors over other key stakeholders.  As a short term strategy, boards will succeed in meeting the short term quarterly whims of investors.  But in the long run, these management teams risk alienating customers, partners, and employees - a slap in the face of a prime source of funding and innovation required to meet current and post recession challenges.  Conversations with over 47 stakeholders highlight some key findings including:
  • Forcing Kool-Aid down the throat of employees. "Our customers kept telling us that we were losing credibility given the rash of aggressive sales tactics over the past few years.  An increase in pricing or maintenance would be the straw that broke the camel's back!  Most customers chose the lowered tiered offering.  There was really no additional value in the new offerings yet we kept pushing.  Many of us complained to our management teams but the decision was already made.  We must have lost 20% in deal flow in the past 2 quarters.  The resulting backlash could have been avoided." Customer Support Technician for Global Support Services - Big 4 ISV
  • Glossing over channel partner concerns. "They kept telling us that customers had asked for this new SME product.  Extensive customer research had been incorporated.  And, any customer let alone employee who didn't see the value in the new offering needed to be re-educated.  Despite being late to market, the product would sell itself because of our reputation and brand.  What they failed to understand was that country managers had already discounted the flagship enterprise product to a point where it was creating huge channle conflicts with sales of our SME product.  We warned them this would happen.  They kept ignoring our concerns over the past 12 months.   Amidst such confusion, our best and long time partners now are leaving for competitors.  For those that have stayed on, our biggest challenge has been trying to help them understand their role and input into our product strategy. " Vice President of Software Partnerships - Global Systems Integrator
  • Ignoring customer requests.  "We need more choices in our user license options.  We used to have concurrent users, then we had named users, and now they want to move us to processor based licenses.  While they have been giving us conversion credits to the new models, we feel that each approach seems to benefit the vendor and not us the customers.  We have raised this issue with the management team each year.  They continue to ignore our requests.  After our recent acquisition, we now are in a position to leave the vendor next month.  It's all lip service and they don't value our input or relationship enough, even though we have spent $4M in 5 years." - Global Director for Packaged Apps - APAC High-Tech Manufacturer
The bottom line - relationships matter despite the chaos around us. Strong relationships are crucial for success, particularly in a difficult economy.  Vendors and customers need to find win-wins in order to succeed through this current down turn.  For vendors, they need to get a better grasp on what's top of mind with key stakeholders.  Executives should walk the halls and directly solicit feedback from employees.  Management team members need to reach out directly to stakeholders and have honest conversations.  Too often, the fear of managing up prevents a company's execs from hearing about the issues.  Instead, they think everything is working out fine despite how much middle management has quelled the groundswell of opinion.  Once these relationships can be reestablished, stakeholders will be there to assist by providing valuable feedback, seeking advice in solving business problems, and serving as references.  In the meantime, this trust needs to be reestablished.  Its truly the relationship that will pull you out of this downturn! Your POV Got a success story where your vendor has put a value creation strategy based on keeping good relationships? Or got a great story on the bone-headed thing your vendor or your employer has done to destroy value in the relationship!  Send me a private email to rwang0 at gmail dot com.  Posts are preferred!   Thanks and looking forward to your POV! Copyright © 2009 R Wang. All rights reserved.

Monday’s Musings: It’s The Relationship, Stupid! (Part 4) – Stop Under-investing In R&D

Economic Downturn Challenges Enterprise Software Executives To Uphold The Sanctity Of The Vendor - Customer Relationships Conventional wisdom would assume that in a challenging economy, strong relationships would be a key success factor to retaining business and mitigating loss of revenue.  Unfortunately, this does not appear to be the case for many companies, including vendors in enterprise software.  Blame it on the economy, fear of depending on their people, or plain greed, but a good number of executives have taken an approach that attempts to preserve shareholder value at the expense of their vendor - stakeholder relationships (i.e.employee, customer, and partner).  Now in their defense, these muckety mucks face dire times and hard decisions need to be made.  However, they are not in a unique situation and risk jeopardizing brand value, trust, and market credibility for short term gain. Let's look at five common value destruction strategies:
Part 4: Under investing in R&D and then repackaging existing content as new innovation Back in the heady days of the 80's, custom dev teams faced challenges with primitive tool sets, constantly changing business priorities, and escalating costs of internal maintenance.  The cost to keep up with change seemed unsurmountable.  Consequently, packaged apps vendors offered businesses the promise of economies of scale so that the long term cost would be less.  Client would benefit from best practices in various industries.  In turn, the software vendor would provide the scale to take over bug fixes,  enhancements, new functionality, staffing, and future innovation. The promise of packaged apps appeared to solve the issues that custom development failed to address.  With Y2K in full force, everyone rushed to put their latest ERP system to beat the crunch.  Upon reflection, it may seem that we traded one set of cost for another.  Here are four customer examples as to what's been happening.
  • Forcing clients to re-pay for the same functionality " They delivered some supply chain planning capabilities in the old modules.  With each release and our input, the product improved.  One day they moved to an engine pricing.  When they launched XXX, they decided to come back and charge us for the new product.  We had access to 80% of the functionality already.   We had the old product for 10 years and should have been entitled to the new release after millions of euros in maintenance and our feedback.  This was the beginning of the downturn in our relationship.  Today they keep trying to sell us on their new suite and its just a repackaging of all their disparate products!"  EMEA Discrete Manufacturer,  CIO
  • Failing to deliver on promised roadmaps " We sat on these Vendor X Customer Boards (i.e. industry peer groups) where we worked out future capabilities with some competitors, system integrators, and other technology partners.  After 5 years of talk, we still have not seen 85% of the functionality requests we put into play.  Instead, the company has focused on the low end of the market segment and in other industries.  We spent all this time talking and now we have very little to show for it.  We've paid over 16M in maintenance in the past 5 years.   What happened to realizing the customer input into the product design process?  Its been an outrage!  We could have built everything on our own and maintained this for the same cost or less.  Yes, we could rebuild our ERP and be more successful and cost effective and just might as the tooling has significantly improved and PaaS platforms provide potential."  CPG,  Senior Director for Business Apps
  • Charging for technology uplifts. "After using Vendor X's Business Intelligence product for 7 years, we finally decided to upgrade to the next version.  We compared the upgrade and functionality wise, the new release had less capabilities than the old release.  They had built the product on a new technology platform.  While it could be more advantageous for us, we were shocked that they had the nerve to charge a replatform fee for us to use the new product.  They demanded additional money for the same functionality.  This is absurd!  We moved to Vendor Y a year later because they did not seem like they would be acquired and avoided this scenario. "  Global Financial Services,  VP Analytics and Business Intelligence
  • Responding at a snail's pace to innovative technologies. " I'm miffed that the large ERP vendors keep missing the boat on new technology.  Why can't they deliver a multi-tenant SaaS offering?  What's up with hosting and mega tenancy? We seek new cost effective deployment options and everything comes back more expensive each year.  We also can't understand what's so hard about improving usability.  Why don't they just take Adobe AIR and Flex and rebuild the screens?  We don't really care what's in the back end!  We just need something that is role based and carries the relevant data that are people need to make a decision.  After paying these guys over 100M in maintenance in 10 years, we could have built this faster, better, and cheaper.  How come they can't deliver better use of collaboration technologies?  At the rate we're going, we'll be using more SharePoint than Vendor X's portal"  Major Oil and Gas,  Director ERP Project
The bottom line - failure to deliver on promised functionality jeopardizes hard won trusted relationships Clients made strategic bets with key software vendors to go with packaged apps.  Many shared with them their best practices in the development and improvement of the vendor's product.  These were trusted relationships.  In the end, vendors achieved economies of scale but under invested their profits back into the product.  Clients had a good start with some basic apps.  But with an average of 80% of all maintenance and support fees going back to profit and not the product, the client vendor promises may be too broken. Initially, most clients took this in stride and gave the vendor some grace period in delivery of key functionality.   After a series of excuses, many vendors failed to deliver as they were distracted with satisfying investors or engaged in M&A.  In such cases, clients and vendor user groups should take action and engage in deeper conversations about what ratio of revenue goes back to R&D.  How quickly should enhancements be prioritized.  What ratio of R&D would the clients expect reinvested from license and maintenance fees? For those clients, its time to apply some leverage on those vendors badly behaving to be more forthright with their commitment on promised roadmaps and more responsive to client enhancement requests.  Clients should be more proactive!  Clients may need to be more public. Your POV Got a success story where your vendor has bucked the trend and delivered more than expected.  Got a POV on how they are keeping good relationships? Or got a great story on the bone-headed thing your vendor or your employer has done to destroy value in the relationship!  Send me a private email to rwang0 at gmail dot com.  Posts are preferred!   Thanks and looking forward to your POV! Copyright © 2009 R Wang. All rights reserved.