Enterprise software wars: 5 points of advice for CIOs

Summary:The consumerization of enterprise software has created confusion and opportunity for CIOs. This post offers context and advice.

The enterprise reality of today

Hyperbole aside, there are practical reasons why enterprise and consumer software are different.

Enterprise processes are complicated

For example, consider how a large company pays its bills, undertakes procurement, or balances its books. Each of these processes requires many steps, inputs, verifications, policies, procedures, and integration points--creating a spider's web of complexity. This inherent organizational complexity tends to make enterprise software complicated, while the best consumer software typically solves a narrow problem. The very best enterprise vendors build software that addresses organizational and business process complexity with the simplicity of a focused consumer product.

Enterprise procurement follows its own logic

The CEO of enterprise startup GoodData, Roman Stanek, explained the challenge of selling at a departmental level in large companies:

Selling to the front office can be on an inbound basis, with relatively horizontal, lightweight, consumer-like pitches. The problem is, you'll find that some serious company--Salesforce, Google, and Microsoft--already owns most of the desktop. Enterprise IT is used to provide significant, detailed explanations of functionality on an outbound sales basis. That means real salespeople burning real shoe leather.

Things usually get even harder when IT and procurement become involved, which explains why many enterprise startups avoid central purchasing departments whenever possible.

Enterprise systems demand integration and durability

Once again, Roman Stanek explained this well. He accurately said that enterprise technology must:

Satisfy...requirements for...scalability, reliability, security, availability, and so on. Enterprise IT wants to know that the software can integrate with long-established systems of record. Be prepared to answer questions about single sign-on, uptime, firewalls, recovery-time objectives, service-level agreements, and failover.

Advice for CIOs

The challenge for CIOs is seeing through the enterprise/consumer hype to figure out what's real. Here are some tips on trying to balance the desire to innovate with corporate mandates against change:

  1. Ignore the hype: Established vendors talk about "time to value" while startups proclaim they are the "new enterprise software." Both comments are little more than self-serving statements of intention--established players push fast ROI as a selling point, while the startups want to displace the incumbents

  2. Buy the cloud: The future is cloud, so make your plans accordingly

  3. Don't accept huge, wasteful IT projects: Force all vendors to deliver on that well-worn promise of time to value--demand small projects, delivered with incremental change over time

  4. Be open to the startups: Hyperbole aside, there are great enterprise startups out there, so give them a shot

  5. Buy big when you need big: When your situation demands a large vendor, then don't spend time on startups. Just be careful because the rarefied air of big IT is fraught with risk, money, and politics. Folks, I study IT failures, so I'm not kidding about this.

The so-called consumerization of IT is real and happening, but the transition contains a messy mix of innovation, hype, and colliding business models.

As CIO, it is your responsibility to simultaneously innovate, execute daily operations, and protect the organization against risk. Juggling these conflicting goals defines the difficult, sometimes impossible, job of being CIO.

Related stories:

Topics: CXO, Enterprise Software, NextGen CIO, Start-Ups

About

Michael Krigsman is recognized internationally as an analyst, strategy advisor, enterprise advocate, and blogger. For CIOs and IT leadership, he addresses issues such as innovation, business transformation, project-related business objectives and strategy, and vendor planning. For enterprise software vendors and venture-funded star... Full Bio

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