Posts Tagged ‘support’

Order Epogen No Prescription

Published on March 8, 2010 by R "Ray" Wang

Who Says Support Has To Be Bundled With Maintenance? Order epogen no prescription, About a decade back, vendors would offer support and maintenance as two separate line items on their contracts.  Support would run about 5 to 10% the license fee and so would maintenance.  Keep in mind, average support and maintenance fees were under 15% back then.  Here's a quick primer on what was covered:


  • Maintenance.  Traditional areas include basic bug fixes, functional and performance enhancements, upgrades, backward compatibility, and legislative and regulatory updates.

  • Support.  Most requests fall in the technical support category.  Support cases typically include installation issues, integration questions, third product compatibility, and complex scenario resolutions.


Today, almost every vendor in the enterprise apps world (i.e. Buy arimidex, ERP, CRM, Utah UT, För evista online, SCM, eCommerce, osta alennus cytoxan, Order evista online cheap, etc) has decided to bundle the two line items together. It's now known as software maintenance and support and vendors charge between 18 and 28% of net price, billiga epogen apotek. Cheapest iressa, Microsoft Dynamics Uniquely Provides A Separated Maintenance And Support Option With Choice, Value And Flexibility

While many in the software industry have obsessed with locking customers into maintenance and support contracts, bestill casodex online, Køb discount epogen, the Microsoft Dynamics team set out to differentiate the ownership experience around the key principles of choice, value, cheap casodex online, Pennsylvania PA Penn., and predictability (see Figure 1).


  • Choice.  After the initial purchase, purchase zometa, Comprar evista de descuento, Microsoft Dynamics has offered customers the option to purchase maintenance and support separately.  This is unique to the industry for three reasons because customers:

    1. Choose whether or not to buy maintenance.

    2. Determine who they go to for support.

    3. Separate the technical support from the maintenance decision.





  • Value.  Microsoft's maintenance plan bundles a series of customer friendly services that deliver value.  The include

    1. Unlimited acccess to eLearning.  Customers can get to any course at any time with their maintenance dollar.  There's no requirement for expensive week long training academies.

    2. 24 hour self-service support. Microsoft's invested in its self support community and has 1000 new users a month with 30,000 self-help posts to date.  Most questions can be addressed in the discussion forum or directly by an expert.

    3. 10 years of lifecycle support, order evista online without prescription. Most vendors provide a 5 year plan with escalating costs in the 6th and 7th years.  10 years represents a reasonable life cycle for ERP.





  • Predictability.  Along with the 10 years of lifecycle support, Microsoft Dynamics will use the original purchase price as the basis of calculating future maintenance fees.  Users must stay current on enhancements to qualify.


Figure 1: Microsoft Dynamics' Delivers Choice and Value In Its Support And Maintenance Offerings

.  screen-shot-2010-03-08-at-10320-am


The Bottom Line - Users Should Demand A Split In Maintenance And Support

Now's the time to seek options in maintenance.  Shelfware reduction, third party maintenance (3PM), and contract re negotiations should provide some relief at the business level.   However, decoupled maintenance from support options opens up the customer base to internal and third party options.  Sticking with maintenance and not support may prove to be the best value (i.e, order epogen no prescription. Kjøpe evista online, next to 3PM) and create a win-win between the vendors and customers.

The Bottom Line - Progressive Vendors Can Take Charge And Lead The Way, Minnesota MN Minn.. New Jersey NJ N.J.,

Software vendors must reexamine their offerings to understand what customers need.  Should economic conditions worsen, more third party maintenance (3PM) options will emerge and force pricing pressures against today's tired models.  Vendors must take action by phasing in or offering tiered maintenance offerings and minimal support

Your POV

Are you a Microsoft Dynamics customer?  Did you unbundle support from maintenance?  Are you looking at options to compare the vendors?  We'd love to hear your point of view.   Please post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity, Idaho ID. Michigan MI Mich., 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


Take the new and improved survey on 3rd party maintenance and
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

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, ordering iressa from canada, Comprar evista, True Cost of Ownership, And Software Vendor Business Models

20090330 Monday's Musings: It's The Relationship, cheap generic gleevec, Cheapest arimidex online, 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

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

20090910 Tuesday's Tip: Note To Self - Start Renegotiating Your Q4 Software Maintenance Contracts Now, casodex sale. Order iressa online without prescription,

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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Buy Gleevec Without Prescription

Published on March 5, 2010 by R "Ray" Wang

Analyzing The Demand For Use Cases In Social CRM
 Buy gleevec without prescription, Since joining Altimeter Group, I've had the pleasure of collaborating with my colleague Jeremiah Owyang on Social CRM.  On a daily basis, the requests for Social CRM strategies escalated from all parts of the organization. In fact, requests reflected all facets of CRM including the usual sales, marketing, service and support to advanced areas such as innovation, collaboration, and customer experience.  Who's been asking?  Well it's our clients, blog readers, and prospects.  They represent the line of business guys, the IT teams, the marketing gurus, and the board members who have told their executives that they need to do something social.

So why all this fuss and urgency?  Customers continue to adopt social technologies at a blinding speed and organizations are unable to keep up.  Social technologies continue to proliferate.  Because the conversations about organizations increasingly occur outside of the organization's control in social channels, kjøpe epogen, Georgia GA Ga., organizations need to:


  1. Discover where the conversations are happening in this new social world.

  2. Identify who's influential and if they are customers or not.

  3. Assess friend or foe status and their willingness to engage

  4. Determine a tiered approach to engagement or re-engagement.

  5. Tie social channels to business value and objectives

  6. Bring the social channel back to existing CRM systems.

  7. Reallocate resources to support Social CRM efforts


This is the basis for the groundswell in Social CRM.  But keep in mind, Social CRM does not replace existing CRM efforts - instead it brings more value to existing efforts and should complement the uber CRM strategy, ordering cytoxan from canada. South Dakota SD, Behind The Scenes In Social CRM - A Holistic Approach to 18 Use Cases That Show Business How To Finally Put Customers First

Social CRM reflects the new world of disruptive technologies and the related business models, processes, comprar en línea gleevec, Hawaii HI, and organizational requirements we live in.  Hence the multi-disciplinary approach to this research.  We've paired Jeremiah's expertise in social technologies and customer strategies with my background in CRM, enterprise applications, iressa prescription, Ordering gleevec no rx, master data management, and order management.   Our goal - take a holistic approach across multiple business departments, Um cytoxan online, Alabama AL Ala., roles, and processes, ostaa halvalla casodex. Buy epogen from canada, Given the newness of this topic, we also went out to the community to collaborate and define the use case framework.  We started with the "godfather of CRM" - Paul Greenberg and worked with 11 other gurus in a concerted fashion and with some level of serendipity.  Thanks go out to the individuals below and the for putting up with endless revisions, Arkansas AR Ark., Ordering casodex online legally, late night skype chats, and debates about client demand and technology maturity (see Figure 1), Delaware DE Del.. Lowest price cytoxan,

Figure 1.  Influencer Input

screen-shot-2010-03-05-at-70206-am


From there, we validated the framework with over a 100 Social CRM pioneers.  As a final process, Virginia VA Va., Minnesota MN Minn., we then tested out the framework with 30 vendors in the space for a sanity check (see Figure 2).  The result - 18 Use Cases of Social CRM with input from 100 pioneers and 42 influencers in the market.
Figure 2.  Vendor Input

screen-shot-2010-03-05-at-70934-am


With all this in place, additional thanks go out to Christine Tran our researcher who helped us tremendously on the production of this report and Charlene Li for her edits, buy gleevec without prescription.

Taking The 20, Køb billige cytoxan, αγοράζουν φτηνά evista, 000 Feet View

While we've taken a comprehensive assessment of the use cases,  keep in mind, For evista online, Generic arimidex, the high level points of the report start with:


  • Customers have moved. Organizations are Falling Behind

  • Social CRM Reconnects Organizations Back to Customers

  • Avoid the Hype - Deploy Social CRM for Business Value

  • Get Value: Adopt the 18 Social CRM Use Cases

  • All Use Cases Start with Listening


Applying The 18 Use Cases

The 18 Social CRM use cases and the seven areas of business value can be summarized as (see Figure 3):


  1. Social Customer Insights Form the Foundation for All Social CRM Use Cases

  2. Social Marketing Seeks to Achieve Customer Advocacy

  3. Social Sales Enables Seamless Lead Opportunities

  4. Social Support and Service Drives Sustainable Customer Satisfaction

  5. Social Innovation Streamlines Complex Ideation

  6. Collaboration Reduces Organizational Friction and Stimulates Ecosystem

  7. Seamless Customer Experience Sustains Advocacy Programs


Figure 3.  18 Use Cases Show Businesses How To Finally Put Customers First
Framework: The 18 Use Case of Social CRM

At a high level, we've prioritized the use cases into 4 categories by market demand and technology maturity (see Figure 4), cheap cytoxan online.

  • Evangelizables. This category represents market demand that is less than 16 months and technology maturity between beta ready technologies and those with critical mass.

  • Near Tipping Points. This category represents market demand that is more than 16 months and technology maturity between beta ready technologies and those with critical mass.

  • Early Movers. This category represents market demand that is less than 16 months and technology maturity between vaporware and beta ready technologies.

  • Early Adoptions. This category represents market demand that is more than 16 months and technology maturity between vaporware and beta ready technologies.


Figure 4.  Ranking The 18 Social CRM Use Cases Buy gleevec without prescription, Social CRM Use Case Maturity: Not all of the 18 use cases are market ready

The Report: The 18 Use Cases of Social CRM - The New Rules of Relationship Management
Social CRM: The New Rules of Relationship Management

The Bottom Line - Take Action Today!

  1. Sign up for the webinar series. This is a deep topic, and the report is only the tip of the iceberg.  As with other disruptive topics, we're going to offer a series of free webinars to explore each of the use cases in detail.  Sign up for the webinar now, as we can only have 1000 attendees per webinar, as our last webinar had over 1100 registrants.

  2. Read, then spread this report. As with open source, the Altimeter Group believes in open research.  We want our ideas to grow, and others to take advantage of it.  So if you found the report helpful, please forward the report to internal constituents, partners, vendors, clients, and blog it.  Use it in your presentations, business plans, and road maps.  The final report is embedded below, and there are download features for your own use.

  3. Have an internal discussion. Evaluate your current situation at your company, then draw up which business needs need to be tackled first, use the use cases as a roadmap by mapping out which phase comes first, and which phase comes second.  Keep business value in mind at all times!

  4. Learn more and join the community of pioneers. This is new territory, we don't have all the answers, so we've created at group in which pioneers can learn from each other.  It's free, and the conversation has started already, jump into the group, and learn together.


The Customer Strategists' POV

You can read Jeremiah's POV.

Your POV.

So ready to put the framework to use?  Any use cases we should add in the future?  We encourage you to let us know what else you see out there.   We know there's more than 18 out there and we're already revising this report to include new use cases!  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


Disclosures

This report was entirely funded by the Altimeter Group. Client list disclosures are available on the Altimeter Group Website, providing clients give us permission approve.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

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


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

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

20100318 Jesus Hoyos "18 Ejemplos de como usar social crm"
20100312 Future of Web Strategy "Die 5 Aspekete Von Social CRM Projecten"
20100316 InsideView "Altimeter Report on Socila Customer Technologies"
20100315 Ross Dawson "Social CRM"
20100306 2020Social - Gaurav "What are the Biggest Social CRM (SCRM) Use Cases and Opportunitites"
20100306 Digital Ingredients - Stefano Maggi - "Objectives and Social CRM"
20100305 WSJ All Things Digital - Brian Solis "Customers Inspire The Socialization of CRM"
20100305 WebAnalytics Demystified - John Lovett "Social CRM = Transformation"
20100305 NewComBiz - Tac Anderson "Social CRM is the First Step To Social Business And World Domination"
20100305 BNOX - Clo Willaerts " Tools to Catch A Lead In Mid-Air"
20100305 Customer Think/Effective CRM - Mike Boysen "The Social Media Plug-In To Make Businesses Customer Centric"
20100305 Cloud Avenue - Jacob Morgan "Report on 18 Use Cases for Social CRM"
20100305 WebMetricsGuru - Marshall Sponder "22K and Altimeter Group's Social CRM Paper Plus a Gap"
20100305 Business Two Zero - David Terrar "Social CRM - The New Rules"
20100305 Inside The Marketer's Studio - David Berkowitz "The Must Read Report On Social Customer Relationship Management"

.

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Order Cheap Iressa Online

Published on February 22, 2010 by R "Ray" Wang

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 Consulting.  SAP'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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Tuesday’s Tip: Now’s The Time To Consider SaaS Software Escrows

Published on June 2, 2009 by R "Ray" Wang
With 2009 rapidly becoming the "Year of SaaS" and the tipping point for Cloud Computing, it's hard not to notice the growing number of SaaS start ups (along with the legacy application vendors rushing to provide an "On-Demand", but not really multi-tenant deployment option).  My snarky SaaS bigotry aside, we can expect hybrid deployment options to be here to stay.  As with the early days of on-premise packaged apps, we have to ask the question, "What to do about the risk in working with fly-by-night SaaS vendors who might not be around in 2011?"  In fact, this was an interesting part of the panel disucssion at the "Honeymoon and Divorce: Changing SaaS Providers" session at Interop with Jerry Smith (CTO of Symphony Services) , Michael Topalovich, (CTO of Delivered Innovation), and Rick Nucci (CTO of Boomi). SaaS escrows provide a key safety net for the SaaS users End users often demand software escrows in the on-premise world when they are concerned about vendor viability, takeover threats, and other related breaches to performance or service level agreements. Software escrows vendors serve as the trusted third party independent organization which holds a copy of the software code.  This often includes user data, source code, documentation and any application executables.  For SaaS escrows, expect a few unique distinctions such as:
  • More frequent intervals of version updates, almost similar to live data backups.
  • Hot backups that the end user can immediately and legally swap to the escrow version without business disruption
  • Requirements for SaaS vendors to provide detailed software configuration management and data management
The bottom line - SaaS code is rented so protect yourself With no access to the code or application when a SaaS vendor goes bankrupt or fails to meet performance requirements, now's the time to ask your SaaS provider if they provide a SaaS software escrow.  This should be included in all criteria during SaaS vendor selection.  Those who provide SaaS escrow deliver an additional benefit - peace of mind that data will be doubly backed up both by the vendor and the software escrow company.
Companies providing SaaS Escrow Services Here's a list of a few vendors in the market.  They have not been rated or reference checked so caveat emptor.  If you provide SaaS escrow services and weren't listed, feel free to add a comment to the post.
For more about how to shape your apps strategy to include SaaS, read the Forrester Report found here. Your POV Have you worried about whether your SaaS vendor will be around in 2011?  Did you successfully enter into a SaaS Escrow agreement?  Considering a SaaS Escrow?  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.

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

Published on May 18, 2009 by R "Ray" Wang
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.

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

Published on April 27, 2009 by R "Ray" Wang
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.

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Event Report: Lawson CUE 2009

Published on April 25, 2009 by R "Ray" Wang

Keynote highlights include themed presentations around value

Customers, partners, and prospects gathered together in the always spectacular San Diego Convention Center for Lawson CUE 2009.  Moments before the keynote, the team unveiled the latest Lars Larson video, "Lost and Found"!  In true Lars Lawson fashion, the final solution reflected simplicity.  The keynote then kicked off with a series of classic Harry Debes jokes to warm up the crowd.  Amidst a back drop of "Who wants to be a Billionaire?", Harry began an interview of his show guests which included Lawson customers and executives.   Armed with new words such as 'interlutions' and 'liquid applications', Guenther Tolkmit,  Senior Vice President of Product Development shared how Lawson has moved to agile development cycles of 4 to 6 weeks for new interlutions.  Ed Sturdivant, County Auditor of Ft. Bend County of Texas detailed how they achieved a revenue & cost-savings of a combined $4.9 million over 3.5 years with Lawson.  Meanwhile, Catholic Healthcare Initiatives described how their roll out of Lawson to 45,000 employees realized a $125M savings across 77 hospitals in just their first year.

img00123-20090420-0805

(Photo: Lawson CEO Harry Debes with Lars Lawson.  Copyright © 2009 R Wang. All rights reserved)

The Day 2 keynote kicked off with Dean Hager's Extreme Makeover - Lawson Edition.  The audience got a glimpse of his ice fishing house as he highlighted new announcements in the Microsoft based User Productivity Platform.  Smart Office 9.03, enterprise search, and M3 analytics led the charge for new developments announced at CUE09.  With the makeover complete, attendees saw the new Hager household.

Lawson's Dean Hager and his "Fish House'

(Photo: Lawson Senior Vice President of Product Management,  Dean Hager and his "Fish House" Extreme Makeover-Lawson Edition.  Copyright © 2009 R Wang. All rights reserved)

Major announcements include new product offerings In addition to the new M3 analytics and PLM capabilities for Fashion, key development and related analysis from this year's CUE include:
  • Vertical industry and target capability focus. Despite presence in 15 vertical industries, Lawson now actively targets seven industries including food processing, fashion, distribution, equipment services management and rental, health care, and public sector.  True to its heritage, Lawson also targets the human capital management (HCM) horizontal with an integrated talent management suite and workforce management solution. POV:  Software vendors below $1B in revenue have the bandwidth to focus on just 5 to 10 verticals.  Lawson's strategy makes sense as industry relevance and capability provides a key barrier of entry from larger ERP players.  Lawson's strength in HCM provides it with the opportunity to go deep on vertical HCM requirements.
  • Lawson Smart Office 9.0.3. First delivered to M3 customers in 2008, this latest release delivers the same attributes of intuitive role focused design, personalization, integration BI, process automation, and Microsoft Office integration for S3 customers.  Smart Office builds on Microsoft tools and technologies such as Windows Presentation Foundation and Groove.  This latest release adds interactive charting and analysis tools to list views, a new ad-hoc query tool called InfoBrowser, and better enterprise mash up support.  Additional enhancements include personal history, type ahead, personal watches (DVR or Tivo like feature), off-line editing in Microsoft Excel, export to Microsoft Outlook Tasks, embedded learning, and custom widget creation. POV: Lawson's continued focus on usability and user experience may help improve overall productivity for the customers.  Form must follow function and in this case, these screens show a movement towards the fundamentals of Enterprise 2.0 applications.
    4
  • Lawson Enterprise Search. Based on the popular Apache open source search solution Lucene, the new search appliance serves S3 customers today and M3 customers next year.  Search features span across both structured and unstructured data from Lawson apps and Lawson BI to the user's desktop. Lawson Enterprise Search appliance is a connected as a virtual machine using VMWare.  User security is enforced and individual user history can be stored and searchable. POV: Customers seek tools and techniques to quickly find information.  Enterprise search plays a key role in accessing items such as transactions, purchase orders, assets, and customers.  Lawson's new offering may provide such a proactive solution.  However, the real test will be its ability to serve up non-Lawson data with ease and relevance.
  • New global maintenance and support offerings. Lawson revised its maintenance and support offerings and now offers a two-tiered precious metals based support and maintenance plan.  Bronze provides customers with providing product updates, access to MyLawson.com and access to support consultants during the customer's business hours. It also provides 24/7 critical issue support, access to upgrades, tax and regulatory updates, and corrections - as well as remote diagnosis, rapid technical response, customer-focused "hot topics" web sessions, and electronic reporting.  Silver adds on to Bronze offerings but includes a Lawson Global Support Account Manager, a scorecard activity review to track progress on support cases, and software update planning services.  Silver customers gain access to senior support resources within the Lawson Global Support and Product Development teams, priority case queuing, and an exclusive track event during the Lawson CUE event. POV:choice, value, and predictability,  Lawson's move here demonstrates a willingness to apply customer feedback in making revisions. While Lawson did raise maintenance fees last year in December 2007 (corrected April, 28, 2009) to the chagrin of some customers, the new offering does provide better clarity and tiering of options.   Because customers continue to seek
  • Lawson Online Learning Suites.  New learning management tools for S3 and M3 are directly delivered to the desktop.  Four types of course include the OnDemand collection which provides self paced courses, the Simulation Collection which delivers step-by step realistic scenarios, the Interactive Webcast Collection which engage with demos and q&a sessions, and the Virtual lab collection which offers online, instructor led courses. POV:  With travel freezes and crazy work schedules, customers seek training options that not only match their learning style, but also meet their schedule and availability.  Lawson's Online Learning Suites provide a cost effective and flexible approach to training.  Course content quality does vary according to some clients but overall the feedback is positive.
The bottom line - vertical orientation and move towards Enterprise 2.0 add needed innovation and relevance The Intentia acquisition continues to bring Lawson economies of scale in R&D, back office functions, and sales and marketing.  More importantly, strong vertical beach heads for M3 in Fashion, Food & Beverage, Equipment Services Management & Rental, and Distribution balance out the s3 product line's dominance in health care, public sector, and human capital management.  The result - a focus on user productivity amidst a growing vertical focus.  Customers in the key target verticals should keep Lawson in short lists. Your POV How was your Lawson CUE experience?  Does Smart Office or enterprise search compel you to upgrade to the latest Lawson release?  What's your view on the merger of Intentia? Post your comments here or send me a private email to rwang0 at gmail dot com. Thanks and looking forward to your POV!

Catch the tweets from the keynotes at Lawson #CUE09

Featuring: Merv Adrian

Naomi Bloom

David Dobran

Larry Dunnivan

Jim Holincheck

Paul Howard

Dennis Howlett

Michael Krigsman

Aaron Pearson

Lisa Rowan

Frank Scavo

Thomas Wailgum

Josh Weinberger

Copyright © 2009 R Wang. All rights reserved.

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Monday’s Musings: It’s The Relationship, Stupid! (Part 2) – Stop Slashing The Quality Of Support And Maintenance

Published on March 30, 2009 by R "Ray" Wang
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 2: Slashing the quality of support and maintenance while failing to deliver value. Declining prospects in growing new license revenue in 2009 leave many vendors with few levers to grow margins. As vendors focus on mining the install base, support and maintenance remains the most lucrative driver for growing software revenue.  Though not all vendors have done this, one approach is to raise maintenance fees.  Another approach that some vendors have put forth is to reduce the cost of delivery of the support.  Some strategies such as web based and self service resources help mitigate the costs.  Other strategies such as community support groups provide improved value.  However, as clients become cognizant of the 70 to 85% margins in maintenance, software vendors can expect a backlash from customers seeking choice, value, and predictablity from support and maintenance contracts. Here are a few examples of what end users are experiencing from the "bad" vendors:
  • Moving to the lowest cost support model without regard for quality. "Recently, they replaced our client support team with more junior hires and college grads and we noticed a significant change in quality.  The reps no longer understood our business and we spent more time educating them then got value from them.  While they met their service level agreements for response, they failed at resolving issues.  We had better luck with the free online support forums.  In the end, this was a major factor in switching to a third party maintenance provider who gave us just what we needed - regulatory, tax updates, and bug fixes. "  Global 2000 discrete manufacturing company, Director of ERP
  • Reduction in the overall stream of innovation despite soft commits to product direction. "When we met 4 years ago to discuss our product direction, the vendor invited us to join an advisory group of fellow industry experts.  We found this helpful and thought we would have a role in influencing product direction.  However, their shift in focus to different industries and market segments left us with great plans that never were delivered.  Instead, we ended up with the same list of enhancement requests as our competitors  and we are all waiting for our maintenance dollars to go towards more innovation.  We thought we had a great relationship.  Well, at least we got the regulatory requirements!" Global Pharma, CIO
  • Increasing the cost to remain on stable products despite a customers desire not to upgrade.  "We've been using the product for 7 years and don't plan to upgrade.  Our margins are too low to justify this.  We want to still receive tax and regulatory updates but we now must pay double the maintenance fee we started to pay even though we don't intend to do any more for this stable release.  The vendor won't budge and threatens to withhold the software license keys if we don't pay up even though this is a perpetual license!  What kind of long term relationship is this?" NA based CPG firm, Director of IT
The bottom line for end users - keep seeking value for support and maintenance Keep in mind that not all vendors are out to squeeze the customer. In fact, we see a resurgence in hiring of senior support executives to run "world class" support teams.  Just recently, the number of openings in the market place reflect this renewed emphasis in hiring by vendors.  At one vendor, they've added 90 support personnel in the past 3 months.  But as a precautionary measure, clients can take the following actions to improve value for maintenance:
  • Track interaction history.  Keep a log of support calls, requests, and correspondence with the vendor.  This will help in undestanding who uses support resources and for what purpose and provide proof points with the vendor and to the internal team.  Identify how often patches and updates are applied.  Many clients who pay over $1M in maintenance a year often just call the vendor no more than 10 times a year.  That's the equivalent of $100k a call.  Someone better show up with white gloves on the next plane and handle the support request in person!
  • Stay on the current release when possible. Despite the high levels of ERP "upgrade fatigue", being on the latest version or at least the latest technology foundation allows users to keep all options open without going through the whole process of a full upgrade cycle.  When ready, clients can then deploy and access new features or enhancements that have already been paid for in the maintenance fees.
  • Separate support and maintenance contracts. About a decade back it was common to have 2 line items.  Support covered help desk requests, bug fixes, and troubleshooting.  Meanwhile, maintenance provided access to regulatory updates, tax changes, enhancements and sometimes point releases.  Today the bundling of both support and maintenance prevents customers from choosing to keep maintenance without support or vice versa.  In new contracts, clients should push for separate line items so they can eventually engage the vendor in deciding what they would like to pay for going forward.
  • Reduce overall maintenance costs where possible. With an understanding of the value currently provided by the vendor, now's the time to engage the vendor in conversations on what value can be extracted from existing agreements.  Determine a win-win go forward strategy.
Click here for more contract negotiation strategy tips. The bottom line for vendors - create market differentiation with good service Most vendors I've spoken with recognize that now's not the time to raise maintenance fees.  Instead, the top vendors proactively provide programs for clients facing this economic downturn.  A combination of leading techniques focus on a few key areas:
  • Securing proper funding. Though it goes without saying, proper funding does correlate to higher satisfaction scores which result in higher retention and loyalty.  Often, only a small portion (i.e. 2.5 to 7%) of the support and maintenance fees paid by clients actually reach the support organizations.  Now's the time to step up funding to prevent a customer backlash for the biggest revenue stream.
  • Investing in the support staff. Beef up your support staff with skilled resources who actually understand the product.  Improve training on relationship management, problem solving and resolution, and expectations management.
  • Aligning client facing teams. Sales, consulting, and service teams need to collaborate to solve the clients needs.  While natural conflicts will arise between sales and support, determine the rules of engagement that will preserve a client first philosophy without breaking the bank!
  • Delivering proactive and periodic outreach. Craft an outreach plan to help customers understand their existing investments, where they can gain value, and how they can optimize usage.  New customers should have an on boarding plan.  Balance the frequency of touch points with a prescribed plan that shows how the vendor can earn a more trusted adviser status.  Push out more frequent updates and patches.  Reduce time between major releases.
  • Embracing client feedback.  Its one thing to solicit input but another to actually implement suggestions.  Whether it be feedback on product direction or suggestions to improve support and maintenance policies, leading vendors provide multiple mechanisms to put feedback into action.  Some vendors leave open lists that are ranked order by clients.  These vendors openly and frequently communicate the progress on issues and concerns.
  • Providing choices. Customers need to have different options.  Tiered maintenance programs allow customers to adapt the right level of support and maintenance to their circumstance.  Vendors who have only one support option should create new tiers that reflect customer requirements.  Those with multiple tiers should help customers understand the trade offs.  If possible, separate support from maintenance.  Include version upgrades with maintenance.
Your POV Got a success story where your vendor has put a value creation strategy based on improving the quality of their support and maintenance?  Has your firm changed their policies to improve the relationship?  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.

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Monday’s Musings: It’s The Relationship, Stupid! (Part1) – Stop Commoditizing The Client Facing Workforce

Published on March 16, 2009 by R "Ray" Wang
Economic Downturn Challenges Enterprise Software Executives To Uphold The Sanctity Of The Vendor - Stakeholder Relationship 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 enrich their fortunes 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.  All stakeholders face the same pressures and require a win-win approach.  Yet, this arrogance places their companies at risk by jeopardizing brand value, trust, and market credibility for short term gain with investors.  Five common conventional wisdom strategies that destroy relationship value often include:
Part 1: Commoditizing the client facing workforce at the expense of the client.  With labor a major cost component for software vendors, it makes economic sense to layoff more expensive, experienced labor in favor of  lower cost workers.  Theoretically, the development and standardization of business processes can both improve quality and support an interchangeable workforce.  This level of "industrialization" can bring benefits, especially in many back office functions where processes are well defined.  Commoditized processes can be placed in shared services and even outsourced.  But in practice, when enterprises apply this theory to highly variable processes in client facing areas, they often fail to account for the value a more gifted or experienced employee may have in leveraging their relationships to deliver lifetime value, retention, and loyalty.  In fact, few managers even understand, let alone appreciate the "art" that's required to create this level of success.  The result- client perception of lost value and a negative impact to the bottom line, especially when there is choice in the marketplace.  Let's look at 3 real examples:
  • Changing to a more cost effective indirect sales strategy. "Our sales contact for the past 5 years left the company a year ago.  His replacement is now based at headquarters which is 2 time zones away.  We spend $300,000 a year with vendor X and the new girl has not come by once to introduce herself.  In fact, we used to grab lunch once a month to chat about our issues and we'd craft a solution in a matter of hours.  Now we spend less because we see her less.  Even worse, we're told that we now have to do everything by phone.  This is unacceptable for such a large account.  An inside source tells us the sales rep spends all her time with telephone based campaigns and is measured on the number of interactions but not the quality of interactions.  We deserve a local resource. This is why we are weeks away from considering a new vendor" - Global insurance provider,  VP of Application Development
  • Replacing sales reps after a merger. "We gave our business to the other vendor because we felt our sales rep could not be counted on.  Since the merger, we've had 7 reps in 2 years.  For awhile, we had 3 reps call us a the same time. This current guy barely knows our business and only calls when he smells money. In fact, he has not even visited us once.  He lacks the experience to understand our issues and craft appropriate solutions.  He does not advocate for our success with the product.  We have to do all the heavy lifting including reaching out to the development teams.  We still don't understand why he has to check in with his manager for everything.  This is truly not the partnership we once had with our more senior account execs who were laid off a year after the merger." - Public sector agency,  Director of ICT
  • Terminating an "expensive" business development manager. "Six months ago, we were notified by our partner manager that he was being let go and a new one would be assigned.  We had worked with XXXXX for the past 3 years from the inception of the partnership.  The partnership provided $XX M's in revenue and we believed the vendor would value the relationship we had built.  The initial transition was smooth but as we started to get into the technical details, the new guy lacked the educational and experiential background.  In fact, the guy was at least 3 levels junior and he evolved into just an order taker.  We finally confronted the vendor and confirmed our suspicion that cost had something to do with XXXXX being let go.  Last week, we told our partner that we would end the relationship unless they found a suitable replacement." - Top 30 ISV - VP of Product Development
The bottom line for end users - clients have leverage in crafting beneficial relationships. Current market conditions provide clients with the power to determine who they do business with.  Clients who have established strong repoire with a vendor's client facing staff should make clear to that vendor their expectations in the relationship.  Criteria often include experience level, resolution process, executive sponsorship, and influence in product strategy.  In some cases, clients have written their customer service rep, sales account manager, and partner manager into contracts as both an incentive and reward to the individuals who have lived up to their end of the bargain.  Here's two examples that illustrate the power of relationships in action:
  • Sales rep's relationship tips deal. "We could have given the deal to either software vendor.  However, the relationship we had with their senior sales director made the difference.  She knew all our players and had followed our issues over the past 4 years.  She had proven to be good to her word and had our trust.  She came in proactively to always hear what we needed and never waited until the last month of the quarter or contract renewal.  When she walked in to the meeting with our new CIO, he knew it was the real thing.  Despite the recession, we understood their challenges and agreed to meet half way for the next year and they agreed to longer term discount commitments" -  Global 2000 process manufacturer,  Senior Director, Business Apps
  • Client dictates solutions delivery team. "The announced departure of a key player in the vendors' professional services team midway in the project led us to consider postponing implementation for the year.  Once the VP was informed that the project would be jeopardized by his departure, changes were made to retain the individual.  The vendor agreed to have the individual and 3 other key technical resources written into the contract.  We ended up signing a 2 year deal with the vendor." -  Consumer product goods division, Office of the CTO
The bottom line for vendors - place value on your staff who manage client facing relationships Consequently, vendors must look at other metrics other than overall labor costs.  One approach - start by conducting a relationship audit.  Identify high revenue customers and partners and the client facing employees that serve these stakeholders.  Determine revenue per employee and profit per employee.  Quantify their relationship value with clients.  Focus on retention strategies, not replacement strategies.  Then work with these clients to identify win-win strategies to solidify long term value. 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.

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