Enterprise software wars: 5 points of advice for CIOs

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, Start-Ups, NextGen CIO

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  • Ease of change is key...

    Great article! Among many good points, you say:

    '...making business process changes with cloud-based software is almost as difficult. This is a critical point because process change issues, rather than technology, cause most enterprise software failures.'

    Spot on! Too many systems - old and new - are too hard to make even simple process changes to. When choosing enterprise software customers unfortunately focus on the ability of the system to cope with their (existing) complex processes, and on the perceived flexibility to meet different scenarios.

    What they don't investigate properly is how easy is it, post-implementation, to switch from one process design to another? What happens when the organization restructures, or goes through M&A, or has to meet some new regulations?

    Enterprises need to look at TCO (total cost of change) if they're to choose software that will stay with them for years and not cost a fortune everytime something changes in the business. Because guess what - change happens!
    • Business process change is not a function of technology

      Technology, especially modern cloud software, is not usually the obstacle to change. The harder part is determining what the change should be and getting everyone on the same page. That part must come before making an technology changes.

      At some point, of course, you must change the workflow or process that is embedded in the software. Well-designed software makes that part easier than was possible in the past.
  • Agree on Ease of Change being very important

    Nice article, Michael. And it is so true about needing to be able to change the workflow and process in a software solution. Companies often think their processes contribute to their competitive advantage and so they want enterprise software to be customized to their specific needs. Yet, some beneficial workflow and process changes are not realized at the outset and only come to light after an implementation has begun, or after users are in full swing. Well-designed, flexible software can accommodate that.
    Molly Haskins