The evolution of the enterprise software services industry has been an interesting one to observe over the last 30 years. It was in the early 1990s that a concept called business process reengineering fostered the at-times unholy alliance of enterprise software vendors and global systems integrators and created the modern ERP industry. That alliance has been a boon for enterprise software vendors and services companies, particularly the global systems integrators, or GSIs. How well customers have fared is mixed – three decades later huge numbers, and in some sectors a majority, of enterprise software projects, particularly the ones undertaken by the GSIs, fail to deliver their expected value within their expected timeframe.
As such, it was refreshing to spend some time recently with SoftwareONE, a software services company based in Switzerland and headquartered in North America in the somewhat improbable midwestern (but lovely) burg of Milwaukee, WI. As an attendee at their first-ever analyst conference, I got to hear about how this global services company and its approach to enterprise software customer success differ dramatically from the model that grew up around the enterprise software industry’s ERP+GSI lovefest past.
For one, while a global services company, operating in over 100 countries, SoftwareONE is significantly smaller than the Accentures and Deloittes of the market, clocking in at a little more than $1 billion in revenue – as compared to $60 billion or so for the two top dogs in the market. Which is a very good thing for customers: The scale of the largest global SIs distorts the goal of customer success in a similar manner to the distortion effect that scale brings to the largest software vendors, turning sales success into these company’s number one KPI, regardless of whether customers are actually achieving the business goals they’re paying their GSI (and vendor) to realize. Blame Wall Street and its myopic view of enterprise software for this mess.
SoftwareONE, with 9000 employees worldwide, can hardly be called a boutiqueservices company. But it definitely operates under a different set of rules than those governing the GSIs of the world, which can (and do) run large implementations into the ground, and the courts, with relative impunity. On the other hand, SoftwareONE, like many of its smaller partner brethren across the enterprise software landscape, makes customer success a virtue that, in the case of SoftwareONE, is baked into a slide that they shared with the industry analysts at every presentation during its analyst day.
The slide consists of a list of aspirations for its customer engagements that would be hokey, as Bernd Schlotter, their head of software and cloud services admitted, were it not for the fact that by the fourth time I saw that slide it dawned on me that they were serious, and that each viewing represented a challenge to be judged by these criteria. The criteria are pretty self-explanatory, more so by the fact that they are usually the things that are missing in GSI culture. The slides have explanations of what these terse criteria mean, but I’m sure you can fill in the blanks:
- Humble
- Customer focus
- Employee satisfaction
- Speed
- Passion
- Integrity
- Discipline
Challenge accepted – I promise I’ll be holding them to this yardstick, and will be telling prospective customers to do the same.
But a dedication to real customer success, while definitely a refreshing change from the focus among too many large vendors and SIs on their investors’ success, is pretty basic, however low the bar for achieving real customer success has been set by the top tier players in the market. The trick, particularly for a non-GSI, is to find the niche, or niches, that establish a services company as more than just a collection of smart people helping customers make smart decisions about choosing, implementing, and maintaining their enterprise software landscapes.
In SoftwareONE’s case, an important niche revolves around the confluence of a set of services that aren’t always front and center in the typical GSI marketing pitch. The first is SoftwareONE’s position as a reseller and marketplace for thousands of enterprise software products and the top three hyperscaler clouds; the second is its support for its customers’ requirements for IT asset management, FinOps, software sourcing, and portfolio management; the third comes from a line of business that creates and manages digital workplaces; and the fourth comes from its more traditional software and technology migration, implementation, and application development services.
What’s fascinating to me is how the data and experience that comes from the first three can inform SoftwareONE’s more traditional enterprise software services, which constitute a fast-growing part of the business that today represents about 50% of gross revenues. One interesting example that I will be expanding on in more depth in the future has to do with an old problem that is only going to get more complicated in coming years: the complexity of enterprise software licensing in the wake of the transformation and modernization of strategic end-to-end (E2E) processes, the vast majority of which tend to span a complex, heterogeneous software landscape.
I’ve written about E2E processes, particularly those that span enterprise software silos, on several occasions. The reason is that one of the most effective ways to transform a company is to transform its critical E2E processes, particularly those that span multiple vendor applications and services. Very often these processes support strategic processes that are essential to competitive differentiation – or at least they’re perceived as such. As transformation becomes an increasingly important imperative across the global economy, enterprise software vendors are waking up to the fact that customers want and need tighter integration, more seamless orchestration, and much better user experiences for their critical processes, most of which span multi-vendor landscapes, whether they’re large mega-processes like order to cash, or more granular ones like asset management or CPQ.
For some companies, all they have to do (which is a big ask, TBH) is optimize their existing mission critical processes and they’re well on the way to running a truly transformed business. And eventually everyone will want to build net-new E2E processes as part of their transformation as well. This means that, for most companies, even smaller SMBs, success in the transformation or creation of E2E processes will mean stringing together applications and processes from the myriad vendors that support the typical company.
Whether it’s a matter of re-architecting existing processes or building new ones, this kind of transformation is complicated, in part because it involves a huge change management effort to wean end-users off their older, broken processes and get them engaged in new ways of work; and in part because just evaluating what software is running underneath, alongside, or within these end-to-end processes is itself a Herculean task. That stable-mucking exercise is just the prelude to an evaluation of what needs to be done with older customizations that may be moot in a fit-to-standard cloud ERP world and applications that are underutilized or just plain shelfware, as well as figuring out what combination of old and new software is needed to truly transform existing processes – or incipient new ones – into a 21st century process, even if it’s not yet running on a 21st century infrastructure.
There’s lots of hidden gotchas waiting to trip up the unsuspecting customer creating these E2E processes. A particularly common problem is that most companies don’t know what individual applications and processes are actually being used by their stakeholders, and not just sitting on the proverbial shelf gathering dust and wasting precious IT budget dollars. And, for many companies trying to do this kind of analysis across a heterogeneous landscape, an old specter stalks these efforts: how to make sure the indirect license side of heterogeneity – is a company paying vendor X the fees it contractually requires when data generated in its apps is also used by apps licensed from vendors Y and Z? – is being handled correctly.
For those of you new to this licensing problem , it can easily morph into a potential financial nightmare – as if managing the direct and indirect impacts of heterogeneity on application and data integration weren’t already tricky enough. All too often, indirect license usage – and the potential for misuse –trigger audits that turn out to be predatory attempts at boosting license revenue. In more cases than there should ever have been, vendors have sued – and prevailed – against customers for indirect license misuse, an incredibly customer-hostile practice that is just plain wrongon so many levels.
Interestingly, SoftwareONE has a refreshing take on this problem. What if your software services partner could not only audit your existing portfolio, but also provide you with an understanding of how the individual components are being used; which ones are lying fallow; how others in your industry are using them (or not); and ensure that you’re compliant with the terms of your contracts?
And what if your services partner could also make sure that you have an idea, up front and before you sign, of what your directand indirectlicense costs will be for that new end-to-end process that moves data from, say, Salesforce’s CPQ tool into SAP’s ERP system, with a side visit to a Microsoft PowerBI custom app. While we’re at it, what if your partner could help you figure out the best integration strategy – including which hyperscaler partner to use – that works for your needs?
And what if that partner could then help you negotiate a better deal with your vendors and hyperscalers, based on knowledge gleaned from its reseller and asset management practices, not to mention its experience supporting the actual E2E process integration itself?
This is what SoftwareONE’s unique combination of service lines can do for an enterprise software customer. It’s pretty differentiating, particularly in a market that has often taken the low road to commodity outsourcing services in lieu of providing high value, differentiated services.
My take is that this combination is hard to find under one roof, and, taken together, they provide SoftwareONE with the ability to uniquely differentiate its offerings vis-à-vis its GSI competitors. (And the individual vendors’ services practices as well, which are often seen as competitive to smaller, non-GSI services partners like SoftwareONE.) This is particularly the case insofar as SoftwareONE, unlike the GSIs, has a dyed-in-the-wool commitment (remember the seven core values?) to getting this right on behalf of the real customer, as opposed to getting it “right” for those other “customers” (aka investors) that hinder GSIs’ and vendors’ ability to commit to genuine, and measurable, customer success.
This is just one aspect of why the SoftwareONE analyst summit on the shores of beautiful Lake Michigan (motto: Unsalted and Shark Free, in case you need to know) was impressive. SoftwareONE has an interesting take on the problems of enterprise software customers and has capabilities that make it unique and potentially highly competitive in the increasingly important transformation services business.
And they have no intention of standing still. The company has ambitious growth plans that include organic growth (each of its core markets has a significant total addressable market that is ripe for the synergies SoftwareONE can bring to bear) and growth through acquisition. Indeed, SoftwareONE announced last week another in a series of acquisitions, having made over 20 since 2015. This time it was Dublin-based Beniva, a ITAM services provider with a specialization in ServiceNow and some important industry-specific chops in energy and manufacturing.
It’s refreshing to have a services company make what looks like a credible commitment to customer success – just as it’s a little depressing to consider how unique this stance actually is. That’s not to say we should expect perfection – that’s asking a little too much of complex endeavors like enterprise software implementations. But concepts like Humble, Customer focus, and Integrity have the potential to cast a whole new light on what customer success can, and should, be. This latest iteration in the evolution of enterprise software services promises to be one of the most important since that unholy ERP+GSI alliance first began.
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