Although enterprise software is pervasive in business, the products and industry tend to be flat, boring, and too often devoid of human expression.
In the olden days, maybe 20 years ago, none of that mattered because software offered buyers such enormous productivity gains (PDF) — beneficial economics (PDF) drove entire industries to buy enterprise products such as ERP. The downsides of high implementation costs, business interruption, and poor user adoption were less important than the opportunity to gain efficiency and wear the ERP badge of honor.
Today, established enterprise software vendors can no longer afford to ignore user experience, and many large suppliers are improving their products while making them easier to implement and simpler for users to adopt.
The transformation of enterprise computing parallels the rise of the consumer Internet and social software such as Twitter, Facebook, Skype, and others. Combined with the pervasive availability of mobile devices and smartphones, the fabric of consumer expectations regarding software has changed over the last decade.
Cloud computing has enabled a new breed of enterprise software-as-a-service startups to make genuine inroads in a competitive fight against large established players. In response, the large companies are trying to figure out how to manage the vastly different economics between cloud computing and their old, on-premise business model. For an industry with roots in the dry, fluorescent lights of back office computing, these welcome changes reflect the increasing importance of consumer-style software.
Yes, enterprise software today is in transition.
To examine that transition, CxOTalk invited a panel of three top industry analysts for in-depth discussion on the current state of enterprise software. The analyst panel consisted of Ray Wang, founder of Constellation Research Group; Esteban Kolsky, of ThinkJar; and Louis Columbus, who is currently with Plex Systems. I have known all three of these people for years, as fellow members of the Enterprise Irregulars, and can affirm they are among the best.
The tone is irreverent and fun, the kind of conversation that only happens among friends and peers. A short summary video of the discussion is embedded below and you can watch the full-length version by clicking here:
The conversation begins with the question, “Why is enterprise software not sexy?” to ascertain how to make it more interesting, accessible, and useful. Ray notes that software becomes sexy based on what users can do with it. For example, data alone is not particularly interesting, but the insights from analytics are valuable, and therefore sexy. Louis notes, “responsiveness is the new sexy” although Esteban counters that delivering value, not being sexy, is what really matters. Personally, I think high value equates to being sexy, and perhaps any disagreement here is semantics.
The group had a fractured perspective on the subject of passion. More specifically, everyone except Esteban believes that passion in business is a valuable source of energy and customer delight. In a strongly worded argument, Esteban says, “Don't bring emotions into business. It’s not about emotional responses, not about human to human; it's about business making money and consumers giving demand in exchange for some value.”
To refute this argument, Louis plays the leadership card: “Passion is incredibly valuable and if you can align someone's personal goals with company goals it is golden. All great things are accomplished with passion. The CEO is servant to everyone in the company to enable their passion and unleash it, so they get to their goals faster. To stay on course, you've got to have passion about the goal and great leaders know how to do that.”
Not dissuaded in the least, Esteban concludes, “Let’s talk about customer delight, customer journey, unicorns, and rainbows. [Give me the] right price, right product at the right time, maybe I will buy it.”
From discussing passion in business, the conversation turned to digital transformation. Esteban points out that major business and technology changes occur every 15 years, with digital transformation now taking that lead. With that in mind, Louis describes the “best CIOs” as aligning IT priorities to business strategies: “CIOs are becoming strategists, especially in customer centric businesses,” bringing the customer directly into the overall purchasing process. He adds, “People are driving” digital transformation.
Ray does an excellent job summarizing the organizational and role shifts behind digital transformation:
CEOs are becoming chief digital officers; the CIOs are becoming marketers; the CMOs are doing the CIOs job. The traditional roles are being converged. Passion is a catalyst for transformation. Now I need the right people so they can execute it; I need the right systems, so they can do it with a level of speed; I need the right level of intelligence, so I know how I'm performing, and have feedback loops, and I need direction to learn from other business models to see what's shifting. The digital moniker is giving people another excuse to get excited about making a change.
Predictably, and I say this without prejudice or criticism, Esteban replied, “There is absolutely no way that passion is driving transformation. Transformation is a business response to societal, marketplace, and workplace changes and it has nothing to do with passion.”
At, which point, Louis jumps in with insight on the changing economy:
The scalability aspects of intelligence are going to beat out the scalability aspects of brute force labor any day. We are in a world competing on economic cycles driven by information accuracy and velocity. You have to earn the right to sell again. That's why customer relationships are so important. You have to earn the right to stay in business now.
The show closes with conversation on the cloud and Esteban making sarcastic and snide comments all in good fun, which Ray refers to as the Church of Reformed Cloud. There’s a lot more left to describe, so I strongly suggest listening to the summary video embedded above or clicking here to see a recording of the entire show.
CxOTalk brings together prominent executives, authors, and analysts to discuss innovation in enterprise business and technology. Conducted live and unscripted on open video, CxOTalk offers a rich source of thought leadership from the top practitioners and thinkers in the world. Join co-host, Vala Afshar, and me every Friday for a new episode of CxOTalk.