FreeBalance is a medium-sized Independent Software Vendor (ISV) with considerable success competing against very large Enterprise Resource Planning (ERP) vendors. We are sharing 16 lessons learned by bucking conventional wisdom to encourage industry innovation and creativity.
Large enterprise software companies frequently introduce new products and upgrade existing products. These introductions are presented, by these companies, as innovations. There seems to be increasing “innovation” hyperbole coming from the larger ERP companies. This innovation is rarely incremental innovation and never disruptive innovation. In fact, minor feature enhancements are presented as innovation.
Small and medium sized software companies that do not innovate do not last long. Our approach to innovation differs from what I’ve witnessed in larger companies:
Innovation is not just about product because there are innovation opportunities in process including services, methodologies, go-to-market and business models. More modest-sized companies can focus on unbeatable products and services.
Larger companies build proprietary technology in order to increase “intellectual property”. This technology is sometimes arguably incrementally better than commercial or open source alternatives but provides little additional value to customers. This is especially true of middleware that has rapidly become commoditized. FreeBalance focuses on the value provided in the applications seen by users.
We make no claim that feature enhancements are “innovations”.
Our focus for incremental innovations is to determine how to reduce the Total Cost of Ownership experienced by customers. That means looking for better ways to configure and adapt software easily to meet unique government and language needs. It also means finding ways to reduce the maintenance footprint and upgrade costs.
Salesforce.com presented a vision for the “customer company” yesterday “live from New York”. A muddled vision. To be fair, far more articulate about customer centricity than what we hear from traditional ERP vendors. I tweeted throughout the event and curated some tweets.
FreeBalance is a Salesforce user, particularly for customer support as a mini multi-national corporation. We have developed processes designed to improve customer-centricity. And, Salesforce tools like dashboards and Chatter are used with commercial and open source tools to enable our global business. We’re also a technology company so have some unique insight here.
The Customer Company Journey
Salesforce explicitly links social technology with being a customer company. Technology, as we have found, enables a customer company – but is not necessary to become a customer company. Leaders in customer companies recognize that the notion of “customer intimacy” as a business model has been around for some time. The technology implications of this trend has been well-known since the 90’s as one of the disciplines of market leadership. from Michael Treacy and Fred Wiersema. The trend towards customers having more leverage in the power relationship with businesses was articulated by Regis McKenna and Patricia Seybold . Not to mention how Geoffrey Moore identified the stages of the technology adoption cycle where customer-centricity was critical to success. And, the work of Peppers and Rogers at the time.
I’m saying that Salesforce is joining the party late. That’s because social technology, as Salesforce rightly point out, is changing the nature of how companies communicate with customers.
The important point is that using social technology does not a customer company make.
Organizations need to build a strategy of customer centricity (or citizen centricity). Processes of engagement and measurement needs to change. And, organizations need to constantly adapt processes to do what’s best for the customer.
Salesforce Customer Company Vision – the good, bad and ugly
Salesforce has got some compelling tools to enable customer companies. Yet, these tools can be also used by non-customer companies to generate revenue and profitability with little or no regard for the customer. As you will see below, I became increasingly distressed during the webcast about the examples used by Salesforce that seemed to include concepts such as:
Prioritizing services to customers who have more social media impact than those who do not
Leveraging technology like big data and predictive analytics to sell more with little regard to customer privacy
Use of social technology as if it was broadcast – using it as sales and damage control channel rather than a customer engagement channel
Manage marketing campaigns for shampoo or television programs without any concern of whether these products are valuable for customers
Facilitate getting out the vote for an election rather than for continuous policy engagement with citizens
The best event example was the way in which a small jewellery business customizes products for customers. And, the notion of having relatively (for Salesforce) small events for customer engagement is a good customer-centric strategy. After all, Enterprise Software companies tend to be mute about new products and services until the annual user conference/shindig/media/hype event.
It has been my experience that Salesforce is far more open in customer engagement than traditional Enterprise Software companies. I’ve had engagement at a Cloudforce event and had a feature request for Chatter picked up via twitter. And, tweets with the #SalesforceLIVE hash tag were shown on the webcast event site whether positive or negative. As I’ve said before, social is was social does and Salesforce uses social channels for engagement.
Advice for Salesforce
Better vision articulation to separate the technology from the strategy
Advice on the why and how of customer centricity
Speakers at events who have researched this business model
Examples of customer engagement rather than customer manipulation at events
Ces nouvelles hebdomadaires apportent à la communauté de la planification des ressources gouvernementales (PRG) un aperçu général des récents développements de FreeBalance et des nouvelles pertinentes de l’industrie.
Retrouvez FreeBalance lors de l’évènement de l’ESAAG au Botswana
FreeBalance sera un exposant lors de la prochaine conférence annuelle de l’East and South African Association of Accountants-General (ESAAG). Cet évènement doit avoir lieu au Botswana du 25 au 28 février 2013. Les conférences de l’ESAAG regroupent plus de 600 participants de ses 14 états membres, à savoir : le Botswana, le Kenya, le Lesotho, le Malawi, Maurice, le Mozambique, la Namibie, le Rwanda, l’Afrique du Sud, le Swaziland, la Tanzanie, l’Ouganda, la Zambie et le Zimbabwe. L’objectif de cette conférence est de fournir un forum pour les professionnels de la Gestion des finances publiques (GFP) de différents pays et organismes sur les opportunités d’explorer et d’aborder les problèmes relatifs aux caractéristiques des « systèmes modernes de gestion des finances publiques ». Lire la suite au sujet de l’ESAAG >>
27ème conférence annuelle de l’ICGFM – Pratiques d’excellence dans la GFP dans une période d’ajustement mondial
La conférence annuelle de l’ICGFM aura lieu du 19 au 24 mai à Miami en Floride. Cinq ans après les débuts de la crise financière mondiale, les ajustements économiques se poursuivent. L’ICGFM explorera les mesures proactives qui ont été prises, ainsi que les actions mises en œuvre pour gérer cette période d’ajustement. Ce thème général formera le cadre principal de la prochaine conférence internationale. Les conférences de formation de l’ICGFM sont des rassemblements de professionnels de la gestion financière qui abordent les réformes et les méthodes financières disponibles afin de mieux servir les citoyens. Des représentants d’Afrique, d’Asie, d’Europe, du Moyen-Orient, de l’Amérique latine, des Caraïbes et d’Amérique du nord partagent leurs expériences pratiques qui répondent aux défis du 21ème siècle. Inscription à la conférence de l’ICGFM >>
Pratiques d’excellence dans la conception de plan comptable
FreeBalance à récemment publié un ensemble de documents sur la Gestion des finances publiques (GFP) suite à notre mandat de partage des pratiques d’excellence pour la communauté. Le quatrième document publié, inclus ci-dessous, décrit les pratiques d’excellence dans la conception d’un plan comptable sur plusieurs années. Il peut paraître un peu curieux que nous produisions quelque chose de nature « technique » qui peut ne pas sembler crucial à la gestion des finances publiques. Pourtant, le plan comptable ou « classification budgétaire » est probablement la partie la plus vitale dans la conception d’une GFP efficace. Lire la suite sur le blog de FreeBalance >>
Rejoindre le groupe FreeBalance sur Linkedin
FreeBalance est un membre actif de la communauté de la GFP et nous essayons de partager les pratiques d’excellence de plusieurs façons. Le groupe FreeBalance sur Linkedin est un excellent forum pour engager des discussions avec vos collègues au sujet de la GFP et de la planification des ressources gouvernementales (PRG). Nous vous invitons à rejoindre le groupe et à participer à la conversation. Rejoindre le groupe FreeBalance sur Linkedin >>
Au Royaume-Uni, un projet de 3,7 milliards de dollars américains utilise la plateforme dans le nuage
L’Education Funding Agency (EFA), l’organisme sous le Department of Education du Royaume-Uni chargé de fournir le financement pour la mise en place de programmes éducatif et scolaire, utilise un logiciel de collaboration dans le nuage pour son Priority School Building Programme (PSBP) de 2,4 milliards de livres (3,7milliards de dollars américains). Le PSBP a été lancé en mai 2012 afin de redévelopper et d’améliorer les installations scolaires dans 260 écoles du RU sur une période de cinq années. L’EFA est responsable de la gestion des approvisionnements pour le projet et de minimiser les coûts. L’organisme a adopté une plateforme dans le nuage et en ligne de Huddle pour gérer un grand nombre de soumissionnaires en considérant chaque soumission séparément. Lire l’article au complet >>
Esta actualización semanal de noticias proporciona a la comunidad de Planeación de Recursos del Gobierno (GRP*) una visión general de los recientes desarrollos de FreeBalance y las noticias relevantes de la industria.
Acompañe a FreeBalance en el evento del ESAAG en Botsuana
FreeBalance será un exhibidor en la próxima conferencia de la Asociación de Contadores Generales de Oriente y Sur África (ESAAG*). Este evento se llevará a cabo en Botsuana entre el 25 y el 28 de febrero próximos. La conferencia de la ESAAG atrae a más de 600 participantes de sus catorce estados miembros, principalmente, Botsuana, Kenia, Lesoto, Malawi, Islas Mauricio, Mozambique, Namibia, Ruanda, Sur África, Suazilandia, Tanzania, Uganda, Zambia y Zimbabue. El objetivo de esta conferencia es proporcionar un foro para que los profesionales de la Administración Pública Financiera (PFM*) de diferentes países y organizaciones tengan la oportunidad de explorar y discutir asuntos relacionados con las características de los “Sistemas de Administración Pública Financiera modernos”. Más sobre ESAAG >>
27ava Conferencia Anual del ICGFM – Buenas Prácticas de PFM en un periodo de ajuste mundial
La conferencia anual del ICGFM se llevará a cabo entre el 19 y 24 de mayo en Miami, Florida. Cinco años después del comienzo de la crisis financiera mundial, aun se siguen realizando ajustes económicos. El ICGFM explorará tanto las medidas proactivas que se han llevado a cabo como también las respuestas que se han tomado para sortear este periodo de ajuste. Este tema global servirá de marco para discutir otros asuntos primordiales durante la conferencia internacional. Las conferencias de capacitación del Consorcio Internacional sobre Administración Financiera Gubernamental (ICGFM*) son reuniones de practicantes de administración financiera para discutir las reformas financieras y los métodos disponibles para servir más adecuadamente a los ciudadanos. Representantes de África, Asia, Europa, el Medio Oriente, Latinoamérica y el Caribe y Norteamérica compartirán las experiencias prácticas que han utilizado para enfrentar los desafíos del siglo XXI. Registrarse a la conferencia de ICGFM >>
Buenas prácticas en el diseño del Plan de Cuentas
FreeBalance recientemente publicó un conjunto de documentos sobre la Administración Pública Financiera (PFM*) siguiendo nuestro mandato de compartir las buenas prácticas con la comunidad. El cuarto documento compartido, adjunto abajo, describe las buenas prácticas en el diseño del Plan de Cuentas de Múltiples años. Puede parecer un tanto extraño que entreguemos algo de naturaleza “técnica” que al parecer no tenga mucho que ver con cómo llevar finanzas públicas. Sin embargo, el Plan de Cuentas (COA*) o “clasificación presupuestaria” es discutiblemente la parte más crítica de un diseño de PFM efectivo. Más en el Blog de FreeBalance >>
Únase al grupo de LinkedIn de FreeBalance
Ahora FreeBalance es un miembro activo de la comunidad PFM e intentamos de compartir nuestras buenas prácticas de diferentes maneras. El Grupo de LinkedIn de FreeBalance es un gran foro para compartir con los colegas las discusiones relacionadas con los Sistemas de Administración Pública Financiera (PFM*) y la Planeación de Recursos Gubernamentales (GRP*). Invitamos a los interesados a unirse al grupo y participar en las discusiones. Únase al LinkedIn de FreeBalance >>
US$3.7 Billones en proyecto del Reino Unido que utiliza una plataforma en la nube
La Agencia de Financiación de Educación (EFA*), es una agencia del Departamento de Educación del Reino Unido (RU) que tiene la tarea de proporcionar la financiación para programas de educación y construcción de escuelas, está utilizando un software basado en la nube para su Programa Prioritario de Construcción de Escuelas por valor de £2.4 billones (US$3.7 billones) el cual fue lanzado en mayo de 2012 para redesarrollar y mejorar las instalaciones educativas de 200 escuelas del RU en un término de 5 años. La EFA es responsable de administrar las adquisiciones para el proyecto y a la vez minimizar los costos. La agencia adoptó una plataforma en la nube de Huddle para administrar la gran cantidad de licitantes y estudiar cada propuesta de forma separada. Lea el artículo completo >>
This weekly news update provides the Government Resource Planning (GRP) community with a brief overview of recent FreeBalance developments and relevant industry news.
Join FreeBalance at annual ESAAG event in Botswana
FreeBalance will be an exhibitor at the upcoming annual conference of the East and South African Association of Accountants-General (ESAAG). This event is scheduled to take place in Botswana from 25 to 28 February 2013. ESAAG conferences attract over 600 participants from its 14 member states: namely, Botswana, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Rwanda, South Africa, Swaziland, Tanzania, Uganda, Zambia, and Zimbabwe. The aim of this conference is to provide a forum for Public Finance Management (PFM) professionals from different countries and organizations with an opportunity to explore and discuss issues on characteristics of “Modern public financial management systems”. Read more about ESAAG >>
27th Annual ICGFM Conference – Good PFM Practices in a Period of Global Adjustment
The annual ICGFM conference takes place from May 19 – 24 in Miami, Florida. Five years after the beginnings of the global financial crisis, economic adjustments continue to take place. ICGFM will explore both the proactive measures that have taken place as well as the responses that have been undertaken to manage through this period of adjustment. This overall theme will frame the focus of the upcoming international conference. ICGFM Training Conferences are gatherings of financial management practitioners to discuss the financial reforms and methods available to better serve their citizens. Representatives from Africa, Asia, Europe, the Middle East, Latin America, the Caribbean and North America share their practical experiences in meeting the challenges of the 21st Century. Register for the ICGFM conference >>
Good Practices on Chart of Accounts Design
FreeBalance recently released a set of Public Financial Management (PFM) documents following on our mandate of sharing good practices for the community. The fourth released document, embedded below, describes good practices in Multiple Year Chart of Accounts design. That might seem a bit odd that we produced something of a “technical” nature that may not seem material to the running of public finances. Yet, the Chart of Accounts (COA) or “budget classification” is arguably the most critical part of effective PFM design. Read more on the FreeBalance blog>>
Join the FreeBalance Group on Linkedin
FreeBalance is an active member of the PFM community and we try to share good practices a number of different ways. The FreeBalance Group on Linkedin is a great forum to engage your colleagues in discussions related to PFM and Government Resource Planning (GRP). We invite you to join the group and get in on the conversation. Join the FreeBalance on Linkedin >>
US$3.7 Billion Project in the UK uses Cloud Platform
The Education Funding Agency (EFA), the agency under the Department of Education in the UK tasked with providing funding for education and school building programmes, is using a cloud-based collaboration software for its £2.4 billion (US$3.7 billion) Priority School Building Programme (PSBP). PSBP was launched in May 2012 to redevelop and improve school facilities in 260 schools in the UK over five years. The EFA is responsible for managing procurement for the project and minimising cost. The agency adopted a cloud and web-based platform from Huddle to manage the large number of bidders and consider each bid separately. Read the full article >>
The evidence mounts – ERP has a high failure rate in government. ERP vendors, whose software is written for multiple industries, suggest that combining multiple ERP instances into a single shared service will result in “economies of scale” savings. And, it has a grain of truthiness, but, as I’ve written before, it is very much the promise of “free beer tomorrow”: this magic point at which ERP provides a better value than using best-of-breed like the FreeBalance Accountability Suite never happens.
Average cost to deploy a Tier 1 ERP is £160 per employee using the traditional method
Theoretical cost to deploy via shared services is £93 per employee
Use of lower cost solutions at £52 per employee
The Total Cost of Ownership (TCO) should be a critical concern in government technology procurement. Although “portfolio management” is a value proposition presented by ERP companies, our experience shows that up-front costs have little bearing on the total cost. Tier 1 ERP packages generate high costs for customization, maintenance, change and training. It’s not a good business case as I described back in 2009 (and tried my best to explain the value proposition of ERP in government as objectively as I could.)
FreeBalance completed a survey at the Government Technology Exhibition and Conference (GTEC), November 5 to 8 2012 and the Financial Management Institute of Canada (FMI) Professional Development Week, November 27 to 30 2012.Both of these conferences were held in Ottawa.
FreeBalance is based in Ottawa and has been a supplier to the Government of Canada since 1984. FreeBalance is a specialist vendor in Public Financial Management with enterprise-class Government Resource Planning (GRP) implementations in governments around the world. This includes some countries where FreeBalance software runs all transactions at the federal level of government and some countries where FreeBalance software runs all government transactions at every level of government. We do not consider FreeBalance to be an Enterprise Resource Planning (ERP) vendor because FreeBalance does not provide solutions outside of government.
There were 207 respondents to the survey held at FreeBalance exhibits. The majority ofthe respondents were public servants in the Government of Canada. More than half ofthe respondents have had hands-on experience with FreeBalance and ERP software.
Technology Country of Origin
The majority of respondents believe that the Government of Canada should favour the acquisition of technology from Canadian companies or select the best solution regardless of country of origin.
No one selected “foreign large technology” as a option
Survey results from public servants significantly contradicts government policy
FreeBalance has been highly successful winning GRP contracts in competitive situations against the largest ERP companies, and, therefore, requires only a “level playing field” in Canada
The vast majority of respondents believes that any Government of Canada technology procurement made in the 1990s should be re-evaluated.
Survey results from public servants significantly contradicts government policy
Use of legacy procurement decisions from around 15 years ago adds significant risk to enable the Government of Canada to achieve “value for money” in the procurement and maintenance of financial management systems
There have been numerous changes in technology platforms in use in financial management systems since the mid 1990s when very few systems were even web-enabled
It should be noted that, in the most recent versions for financial management software in use by the Government of Canada, only FreeBalance provides a pure web solution
1980-2000: The era of Mainframe and Personal Computer – based financial management software
1985-2005: The era of Client/Server software operating with different “fat” clients connected to PC and mini-computer servers
1995-2015: The era of Hybrid Web through the use of client/server base software that is web-enabled through translation layers and plug-ins or operate a fat clients via web protocols
2005-2020: The era of Pure Web financial management software using web infrastructures to support Cloud Computing and Shared Services without the architectural limitations of Client/Server infrastructures
How does the Total Cost of Ownership (TCO) for FreeBalance compare to Leading ERP Vendors?
Over 70% of respondents believe that FreeBalance software has a much lower TCO in government financial management than ERP. Almost 70% suggested that the FreeBalance TCO was between 10 and 50%.
TCO is a critical calculation to determining the “value for money” in government procurement
Software with the lowest TCO that is compliant to government needs will reduce costs
The software license and maintenance costs represent an insignificant factor in TCO when compared to equipment, training, staff retention, software changes and version upgrades
The assessment of public servants on TCO is similar to our analysis of quoted prices in international bids (where bid prices are publicized) that shows that the average FreeBalance turnkey price is almost, on average, half major ERP vendor prices
How Should FreeBalance react to ERP Government Failures
Two out of every three respondents recommends that FreeBalance publicize failures of ERP software in government. Over 85% of respondents with an opinion recommended that FreeBalance publicize ERP failure in government.
There are numerous ERP failures, cost overruns, late deliverables and inability to achieve planned benefits in government
It’s the last day of the Financial Management InstituteFocus on Value Professional Development week in Ottawa. This is a government conference – check out the #pdweek hash tag in twitter. The use of shared services in the Government of Canada, especially the Shared Services Canada department, has been the subject of numerous speeches and presentations. And, numerous side conversations.
Data centre consolidation increases communications latency and system resilience increasing the risk a system-wide failure (there a failures in major public cloud services that have far more redundancy than envisioned by the Government of Canada)
Centralized data centres can increase the impact of security breaches
Governance issues such as “streamlining governance” that can result in loss of service quality
The high costs and low service that was part of voluntary shared services prior to 2012 may not be solved by having mandatory shared services
Back-office consolidation increases possibility that unique legal requirements needed for individual departments cannot be accommodated
Loss of IT personal to the shared services organization results in departments requiring to outsource to the private sector for what they once did in house
Managing standards and exceptions to those standards provides orders of magnitude larger governance burden than the status quo
The use of inflexible legacy systems – “rust” – such as legacy ERP programs that use proprietary client/server languages add significant costs
Value-for-money oversight when the shared services organization is the financial, technical and security authority for itself
Civil service capacity and public financial management sustainability
The lack of civil service “capacity” or the need to improve “capacity” is a consistent theme when diagnosing public financial management problems in developing countries. In a recent post on the International Monetary Fund PFM Blog, Capacity Building and Why Reforms Fail, David Gentry opens with: “Rarely can you find a technical assistance related document that does not refer to the need for capacity building.” Civil servants need the proper skills to implement government programs.
Developing nations are modernizing PFM processes rapidly. Sustainability, in this context, extends beyond implementing and maintaining PFM policies competently. Civil service skills need to improve as more sophisticated processes are introduced. In 2009, Sailendra Pattanayak, in the IMF PFM Blog, describes the Sustainability in PFM Capacity-Building in Post-Conflict Countries challenges including “general shortage of appropriate financial management and accounting skills” and the over-reliance on advisors. Peter Murphy in 2011, also in the IMF PFM Blog, in Who is “driving” the IFMIS?, describes the “classic public sector problems of retaining specialist ICT staff” and the problems associated with contracting critical Information and Communications Technology (ICT) support. This problem is particularly acute in developing nations with limited human capacity.
The baby boom in Canada means that there significant numbers of public servants approaching retirement. This “exodus” from the public service has created a knowledge “brain drain”. And, budget cuts are eliminating more jobs. This creates uncertainty among civil servants who seek out private sector positions. And, it means that the public service is no longer an attractive option for university graduates. Yet Public Financial Management is becoming more complex in Canada including initiatives such as:
Governments are reluctant to farm out many back-office functions to the cloud because of privacy and security concerns. So, governments attempt to achieve cloud computing economies of scale through “private clouds” or “shared services.”
Shared services has had mixed results especially in reducing the need for highly skilled personnel.
The capacity to manage an “elastic” fault-tolerant infrastructure requires significant capacity. And, the governance of shared services requires orders of magnitude more capacity than departmental systems. The Gartner Group concluding that “shared services” is on the descent to the trough of disillusionment.
Some governments leverage Enterprise Resource Planning (ERP) software for private clouds. ERP software is complex to use and manage. Code customization is frequently required to achieve government requirements. And, this software was not designed for a cloud deployment. Some economies of scale in IT capacity can be achieved relative to numerous on-premises implementations. However, this approach does not make the ERP software easy to use. And, the customization requirement often means retaining or contracting for expensive staff. The software bloat described in the previous post also adds to complexity: more features to learn and more IT infrastructure to management than is necessary.
IT capacity building
Capacity building is a fundamental to sustainability – the Total Cost of Ownership (TCO).That’s why there is significant attention to capacity building in turnkey Government Resource Planning (GRP) requests for proposal. The intent is to achieve government self-sufficiency regardless of the method for deployment which, in developing nations, is typically a shared service.
Implementation of on-site help desk with government personnel that are familiar with the IT systems and the processes in use by the government
Large training programs designed to keep a cadre of experts even in situations where there is a high turnover in the public service
Expansion of training programs beyond the software to core PFM and IT training
Change management focus to ensure that capacity building precedes reform
Mentoring programs including making knowledge transfer from contractors a condition of employment
Use of knowledge management, e-learning and adaptable help systems that include all policy manual and courseware information
Capacity in human resource systems
Developing country governments are beginning to use human resource management, or civil service management, software. The key objective for using software for civil service reform is to improve government capacity. Skills are identified and talent management queries are used to discover civil servants poised for career advancement. This can be accomplished across the entire public service. Training programs with schedules are published to self-service portals. This affords “technology leapfrog” opportunities to leverage critical advanced talent management software functions.
FreeBalance approach to capacity building
Many will argue that the software vendor has no place in capacity building. Software vendors build software. Consultants implement these solutions and are responsible for building capacity. Our business methods have been adapted to the PFM domain.
It may be curious that FreeBalance measures self-reliance as part of our balanced scorecard. In other way of looking at this, we count score our ability to reduce our long term services revenue opportunity from customers. Some of the measurements we use are:
Customer satisfaction rating includes important questions on whether customer thinks implementation is sustainable – it doesn’t matter how happy a customer is with FreeBalance, if the implementation isn’t sustainable, we’re not happy
Number of Customer Exchange members, an invitation-only social network, to enable interaction among customers
Targeted percent of services work by local or regional staff rather than from other regions. The need to bring in FreeBalance consultants from different regions means that we are not building FreeBalance capacity close to our customers.
Number of FreeBalance SWAT teams required to overcome customer mistakes with our software. SWAT teams are formed whenever there is a significant customer problem. The team is cross-functional and includes executives to ensure the highest priority. Sometimes the problem is generated by improper knowledge of the software or underlying IT infrastructure. If so, we’re not building customer capacity.
Targeted number of training days per country. This measure is to ensure that capacity is maintained in governments because there can be high civil service turnover.
Is this a trend? Will we see large enterprise software vendors leveraging market share to extract more revenue from customers – yet deliver less value? It’s ethically disturbing.
Not to mention the strong words like “screwing”, “fraud” and “restriction of trade” used in the articles that I’ve linked to.
My sense is that the ERP business model has become obsolete. ERP vendors can no longer exploit a lack of information in the market. Customers know that middleware is a commodity, that cloud services can be far more efficient, that proprietary technology is overly expensive and that many customers are negotiating for lower maintenance fees.
Hidden costs are no longer hidden. And, the power ratio is shifting from vendor to customers. (Something that we’ve embraced to generate customer innovation).
Yet, large ERP vendors believe that they own customers. They’ve bought other companies in order to restrict customer choices. They provide a proprietary stack of middleware to increase switching costs. Yet, customers continue to switch to more agile solutions. ERP vendors continue to acquire cloud players, but as analyst Larry Dignan suggests, ” without maintenance and software lock-in, keeping customers may be a bit trickier.”