Cloud computing may help make running enterprises a little bit easier (allegedly), but it has not made running an enterprise software business any easier. If anything, things have gotten more difficult for vendors lately.
The most challenging piece of the rapidly accelerating migration to cloud for enterprise software providers is delivering a superior customer experience.
That's the gist of a recent analysis produced by Bain and Company, which points out that in the era of cloud connectivity, the era of shoddy releases and so-so customer service is coming to an end. "For many years, enterprise technology companies got along fine with pretty low customer experience ratings--just about the lowest, in fact, of the industries we measured," the report's authors, Chris Brahm, James Dixon and Rob Markey, state. But it never seemed to matter, they continue: "Once software or hardware was installed and running, companies were reluctant to go through the expense and hassle of changing vendors, even if the technology wasn't delivering a superior experience."
What's happened is that the enterprise buyer base has shifted under vendors' feet. Until recently, enterprise software purchasing decisions were made b the head of the IT department. Today's cloud solutions buyers, on the other hand, are a range of people within organizations, especially from the business side of houses, Brahm and his co-authors point out.
Along with Bain's observations about the shift in enterprise buyer profiles, it's also notable that vendors are now expected to become 24x7 providers of functionality and availability, a role new to many. They may not have to become data center operators in their own right, but they are expected to contract with and provide such resources.
Thus, the time finally has come for enterprise software vendors to step up and closely weave their fates in with that of their customers, to not just do a hard sell every couple of years with minimal attention in between, but to be always on and always engaging.
In the process, there are lessons that also apply to any and all industries beyond enterprise software as well; as many companies are becoming software and cloud companies in their own right. Always-on software delivery is a challenge for all.
Some lessons Bain's authors provide for today's enterprise vendors:
Be aware that old habits -- and corporate cultures -- are hard to break: Superior enterprise customer experience doesn't happen overnight, Brahm and his co-authors point out. "Senior executives should not set out thinking it will take six months; it's more like three to five years."
Become more data driven: Technology companies are quickly learning to establish customer-success metrics which "allow everyone in the organization to speak a common language about the customer experience and to measure progress transparently," Bain reports. The Net Promoter Score is a key metric for this industry.
Expand view beyond IT. Brahm and his co-authors urge vendors to take a deep dive, and actually sit down with enterprise customers to study "how they use products yields a deeper understanding of critical pain points." In cloud engagements, usage data will provide such valuable insights as well.
Promote greater design thinking in development. The insights gained from customer meetings and usage data should drive development efforts, the report's authors urge, adding that companies should "take a 'design thinking everywhere' approach, with nothing off limits. Old waterfall methodologies, with their long cycles,are quickly giving way to Agile--and that should make development more responsive to end users."