Approaches to selling enterprise software

In the last decade or so there have been a number of books written, and practices proposed, on how to sell enterprise software. It probably started with the grand-father of business sales techniques, the SPIN methodology. I went through that technique in order to sell a data warehousing solution. (SPIN was an acronym for Situation, Problem, Implication, Need-payoff).

Since then, I have been introduced to the approach of solution selling, mainly because Microsoft adopted that process, and more recently Jeff Thull’s books – The Prime Solution, and Mastering the Complex Sale – which I believe are a more realistic methodology for understanding how to sell complex products like enterprise software.

All these approaches seem to have one central assumption, that selling complex business applications is the same where ever you are. But arising from the sales discussions at SYSPRO’s international executive conference, I came to believe that there is no standard way of selling throughout the world, and that different cultural perceptions and expectations play a large part in the process of how enterprise software is sold.

Three brief examples:

1. In the UK, business software buyers seem to have arrived at a standard perception of the price per seat at which certain types software should be licenced. So talking about value of a product is waste if your price per seat is higher than the generally-accepted price.
2. The concept of not devaluing your product in the initial sales encounter seems to have gone out of the window in the US, where even the ERP mega-vendors are coming in at the early sales stage with significant discounts.
3. In Australia, where large trans-continental distances between a company’s customers and suppliers are common, it is not necessarily the whole product that has value, but certain functionality, like SYSPRO’s Landed Cost Tracking, has a much higher premium in terms of customer need than other countries.

It seemed like the only aspect that everyone was prepared to agree on is that people still buy from people.

Do analyst organizations “speak with forked tongue”?

In the old cowboy movies, when a ‘red’ Indian said that someone was being duplicitous or exhibiting a double agenda, the words they were given to say were ‘XXX speaks with forked tongue”.

Analyst organizations often extol the values of the Internet, allowing teams to work together virtually, while being disconnected physically. But when you see a job opening for an analyst company it is frequently for a location which coincides with the analyst main office.

So when I saw this blog from the TechnologyEvaluation group for a new analyst position, the “forked tongue” comment came to mind.

Do you think I am being unfair?

Productivity, employment and manufacturing

Andrew McAfee has written another post on his blog about how employment appears to have been affected by technology. He quotes research by Jared Bernstein which shows how employment and productivity are diverging, and which attributes its to outsourcing and off-shoring.

I remember when that trend started to take root in the US around the Y2K period, and was continually amazed at how the corporations that did it, and the society it occurred in, were more interested in the short-term gains (lower costs and prices, higher profits) than the obvious long-term consequences (less local industry, more unemployment).

In my opinion, the solutions for the US is to start ‘re-shoring’ and to re-establish its manufacturing sector. A number of  industry publications (e.g.,IndustryWeek and Manufacturing Executive)  have been calling for this. I really look forward to seeing Americans being proud of having a thriving manufacturing sector back in their country.

SYSPRO conference in Cape Town

A few days ago I was privileged to be included in a conference that SYSPRO held for all its international executives and senior managers. The title of the conference was ‘Future Focus’, as the conference was primarily around the company’s future strategy, and as SYSPRO CEO and founder Phil Duff pointed out, the key to making strategy work is focus.

The conference took place over several days and in two locations around Cape Town. Initially, the sales and marketing people were at a hotel in Milnerton; then everyone came together in the Franschoek valley, about an hour out of Cape Town. I stayed at the stunning ‘Le Franschoek‘ hotel.

Here are some of my photos.

Table Mountain from Milnerton

Franschoek mountains from Le Franschoek

The conference venue - L'Ermitage, Franschoek

Le Franschoek view

If you want details about the actual conference, check the official SYSPRO blog – I’m sure there will be something there shortly.

Finally, a photo of some of the people I work with.

Members of SYSPRO Corporate Services

Elucidating “Confused of Calcutta”

One of the deep thinkers on technology is JP Rangaswami, whose blog Confused of Calcutta I have been reading for some time. But while he writes with erudition, he sometimes misses his targets, especially when it comes to enterprise software. As Dennis Howlett has commented – his approach is “way too esoteric for operational people to get.”

I have been sitting on two of JP Rangaswami’s (JPR) theoretical musings for some time while I tried to figure out what they were getting at. One is Thinking about the Social Enterprise, the other is a concept he proposes about application types (pillars) of enterprise software.

In the social enterprise blog, JPR talks convincingly about customer-centred communication, but there is still something missing for me. A socially-enabled enterprise should be able to include any object – what about being able to follow entities inside the enterprise, not just people but also things, like orders, parts and processes? From a financial and operational perspective, how could social enterprise activities be interpreted in terms of measurable outcomes?

Last year, MIT professor Andrew McAfee put the social enterprise movement into context, referring to an InformationWeek article which noted:

Part of the reason social networking tools still aren’t mainstream at most organizations is because Enterprise 2.0 is still considered more of a “movement” than a business imperative. The movement’s evangelists employ the kumbaya language of community engagement rather than the more precise language of increasing sales, slashing costs, and reducing customer complaints.

The good news, according to McAfee, is that he and others are working on creating compelling evidence for the operational guys.

Turning to the other topic, I discovered JPR’s concept of “application pillars” sometime later. It’s been around for a while, in 2005 Phil Wainewright summarised it.

Publishing: Any application that generates data will act as though it’s a content publisher, using RSS or similar to publish its data. The significance of this is that it reduces all of these applications to the level of raw feed generators …

Discovery: This is the application that gives everyone a “Google experience” — a single, homogenous database where everything is stored and where everything is discoverable … the information database is open access, with access and authorization controls added only as necessary for specific items or classes of information.

Fulfilment: This is the application that makes things happen, most notably for customers. Identity management plays a crucial role here, controlling the catalog choices that are shown to each user and their rights to approve shipment.

Conversation: All the channels of collaboration between people, either inside the organization or beyond its walls.

It took me a while to grasp the concept because it didn’t seem right, in fact rather simplistic. In my opinion, the pillars fails to recognise that enterprises are not just about data.

For organisations that make and store physical things, rather than just move information around, I struggle to see how the pillars would cope with the activities of a transaction – something that involves ordering, making, storing and distributing an item.

Moreover, one of the critical aspects of business that ERP systems help to manage – processes – doesn’t seem to fit into the pillars concept. Perhaps what is needed is a modification to include two more pillars – transactions and processes.

I apologise for taking so long to comment on these two concepts, but I believe the issues raised by JPR deserve to be given serious attention as the basis for a new framework for enterprise software – not just left as vaguely academic ideas. JPR comes from a background in banking (Dresdner Kleinwort Wasserstein) and telco (British Telecom), which makes me wonder if there are aspects he doesn’t appreciate about businesses that actually make or sell things.

Let me know if you think I have mis-understood either, or both, of these concepts.