Business Software Trends Update

This is usually an end of year type of post for me, but this year, I feel like now is the time to focus on a clearer discussion around business issues and technology trends, and to tie several topics together, and see if it would be easier for businesses to understand the opportunities for modernization leveraging technology. I suspect that it will also provide some good topics for follow on posts that can go into each in more depth. This is also timely as we are now in the big Fall software / technology vendor user conference season.

Before looking at the trends specifically though, it’s useful to look at the challenges that businesses are facing today. I guess that in itself is a pretty big statement, that all businesses are facing a set of issues that are similar and have both common causes and solutions. Some (maybe many) businesses are aware of the challenges and are actively looking for solutions. Some, as you might expect, are either ignoring the growing problems or at least not taking any action to respond to the disruptive pressures. Ignore it or not, but to quote Steinbeck “they’s a change a-comin” (Grapes of Wrath). There’s a mix of strategic and tactical issues that are all related to a major business platform shift (not just a technology platform shift, although that’s part of it).  The Internet is both a business and a technology platform, and is the lever that is moving business from the industrial model to a data and information driven model. I won’t go back to this topic though, since it’s been well discussed by many, me included. Let’s focus on issues:
  • Customer’s (and that’s B2B and B2C) don’t “behave” anymore. They have flipped the way they learn about a brand / product and have a limitless set of online resources to empower them and change or magnify their expectations. Social networks, online communities, social media, review sites, forums, etc, are a driver in this change. They have learned new ways to do many things in their lives and manage all those changes on a powerful computer that fits in their pocket.
  • Employees have different and changing expectations for work, work environments, interaction models, organizational structure and even the tools (software, devices, etc.) that they want to (and will in spite of company policy) use. The same behavioral changes that impact customers are impacting employees. 
  • The relationship of companies to resources is changing as many more people either are put in a position where contract employment is the only viable option or elect to work on a contract basis rather than as a direct employee because of the flexibility, opportunity, diversity or other personal reasons; and as businesses have increasing needs for contract people that are brought on to do specific tasks and/or projects but not needed as a part of the regular workforce. So not only is the workforce changing but the worksource is also shifting.
  • Sales and marketing, in many companies are not functioning as effectively as they did in the past. This is a two (or more) ended problem. On one hand customer behavior is different and still changing so traditional “selling” is just very, very hard. Or maybe I should say that because of the other end of the problem, perpetuating models that are not suitable nor effective for an information driven and connected environment. In a survey I did this year, sponsored by Salesforce, we found that almost 65% of the respondents (B2B buyers in North American companies) reported that they had already made their purchase decision before contacting the vendor sales representative. Said another way though, 65% of buyers did not contact  competitors of the vendor / product they chose, which of course means that companies are losing a significant amount of business that they have no clue even existed as a competitive “selling” opportunity. There’s an old saying that I’ve used for a long time and particularly like; insanity is doing things the way you’ve alway done them and expecting the results to be different (a quote that at various times has been attributed to Ben Franklin, Mark Twain and Albert Einstein). No matter who actually said it (and no one that I can find does), the definition of insanity is forcing sales reps to do more of (or do faster) activities that are clearly not working, so more, well… I have several other analogies for this issue (you can see it’s something I’ve thought about a lot lately), but for the sake of not making this post just about how to sell effectively to information driven and highly connected buyers I’ll save it for another post. 
  • Millennials are the largest generation in the workforce this year (US Bureau of Labor Statistics). This is listed as an “issue” mostly because that means that the dissatisfied and vocal employee group is getting much larger very fast (not that the dissatisfied employee’s are only millennials, it’s just that they will add significantly to that group). 
  • Business model innovation based on the Internet and the marketplace (or networked, or community…any of these work well) is more disruptive than product innovation in most cases (that’s my plausible out for the few cases that someone will point out to me later…yes I know that disruptive product innovation is and will always be strategically important). Said differently, your business is at risk more from new models that can appear almost overnight than from new products/services or changes in pricing. Could you (or maybe the question is would you in time) react to a business disruption in your industry like what taxi cabs are faced with today because of Uber, Lyft and others?  
  • I’m not convinced that we understand user experience (UX) any better today than we did in the past (and that was a huge gap). UX applies to a lot of the problems I listed above, but specifically I think that there are big gaps in the usability of business technology and misunderstandings of what customers actually want in interacting with a company. For software I see “new” UI’s and the concept of UX everywhere but then you see the software and realize that most (I won’t say all, that’s not defensible) is not drastically different. We still see grids, forms, etc. that require human interaction for data input that the system already has or at least has enough data to suggest the correct answers. We’re not taking advantage nearly enough of the data and the capability to make system users’ work smarter and with more impact; and not rethinking the UI to simplify and streamline the way we interact with the system.
With those issues creating disruption and change for most businesses, what is changing in technology to assist businesses in responding and changing to meet these challenges head on? Here are a few trends that we’ve observed and researched in the past year or so:
  • Social collaborative tools (enterprise social networks) have moved from a “social layer” in a company to an embedded part of the work itself. Collaboration then, can happen in the context of the workflow and bring together the right people, data and tools to execute a task / project or support the decision making process. In the future as platform as a service (PaaS) offering get more prevalent in businesses (that’s a different topic below), the social tools will be an embedded part of the platform and surface in all applications across the business.
  • Communities are the foundation to new business networks and the new marketplace business models. The Internet has created a way to connect people, resources, information and tools together around almost any subject / activity. I won’t spend a lot of time talking about business networks in this post, I’ve written about it on this blog, in IDC documents and in a sponsored paper for Ariba here
  • Customer experience (CX) continues to be an area of focus for businesses, as more companies realize that the problem is multifaceted and involves much more than technology. CX is first a companywide strategy and something that involves the whole company. Silos are the enemy of CX, whether they’re organizational and prevent consistent communication to the customer by fragmenting the internal collaboration or data silos caused by the lack of integration or lack of complete data pictures of customers and prospects. From a technology perspective there are more solutions that are starting to come together, but there is still a lack of linkage of “front office” to “back office” in systems and in organizations. There’s still a long way to go to have complete technology solutions that can facilitate a flexible, adaptive and complete approach to CX. For more on this topic you can check out this post.
  • One of the most interesting data points that came out of our IDC CX / Experiences survey this year is the clear linkage that companies are seeing between CX and employee experience. It’s not surprising that the linkage is there, we’ve talked about employee and partner experience as well as CX for several years. The surprising thing was how aware and focused many respondents were on the issue. Not that it was solved by a long shot, but awareness will start to drive the changes that are needed to link it to the CX strategy and get the right systems and practices in place. The CX post I linked to above includes some on this topic as well.
  • A large part of the future of business software is tied up in the new platforms (PaaS) that are forming and evolving today. I think we are moving into a “post application” era for cloud software and businesses. I won’t spend a lot of time now on this, but here is a post that starts to examine the importance of the new cloud platforms and the ecosystem that is developing around them.
  • Big data is another topic that is getting a lot of attention. One of the by products of having a deeply interconnected world through the Internet has been this rapid increase of data everywhere and on everything. There are lot’s of interesting things to do with all this data, but for most companies the “big” part of it is likely more scary than it is useful. I did a 3 part series earlier this year on making data actionable, here’s the link to part one. There’s a data process that I’ve started using that I believe helps think through the process of having data to using that data for something. I haven’t written a lot on this yet, but look for something in the near future. In the mean time, the steps are:Building a data driven business is becoming a reality for businesses, although it is still challenging for many. The process in the prior bullet speaks to this. There is a need for a merging of a few systems into a People-centric decision network (PDN),  a combination of enterprise social networks (ESN), data / analytics / BI and assistive technology like AI and cognitive computing. The PDN is the vehicle for democratizing data by getting it to the “right” place, “right” people and “right” time to be used. The series that I linked to in the prior bullet includes some information on this concept, and also this post adds more on the assistive technology part of the PDN.The sales issues that I identified above is getting some technology attention with new SaaS offerings that help sales reps (not just managers) to be better at the job of selling. There are two categories of tools for sales reps that are necessary to increase productivity and start to enable the behavior change that has to accompany any real change in selling; sales intelligence and sales enablement. Now I know sales enablement is an old term, but I’m not using it in the same way. What’s not needed are tools that help sales do the same activities they have been doing more efficiently. These tools are the support for new behaviors that are tied to taking the deep intelligence (data) that is being developed about prospects and customers and providing the sales rep with assistance in predicting behavior and then doing the activities that have the highest likelihood of success. That’s very different from doing the wrong process faster (although I guess you would fail sooner so maybe that has some value). Marketing is also involved in the intelligence and enablement activities and can get much closer to the sales process by connecting to these systems (and integrating into the other marketing tools in use). This is a big area and I will expand on it in a follow on post.
    • Integrate
    • Contextualize
    • Analyze
    • Predict or Prescribe
    • Democratize
These are some of the trends we’re tracking, and they all tie together around the theme of business modernization. I have an ongoing series on modernization though, so I won’t expand on it more here. All of these trends deserve a deeper dive of course, and for the ones that I haven’t already written something recently, I will post something shortly.

One thought on “Business Software Trends Update

  1. Mike, excellent “lay of the land” post on topics that are often talked about using buzzwords, but not often defined, and put in the context of every day customer problems. Can you comment on the distinction between the value of people-centric networks in front-office and customer engagement activities, and asset-centric networks? It seems to me that we can solve for most activity in this is his, whether they be run the business processes, or engage the customer processes, by combining asset-centric and people-centric. Do you agree? It seems that all of business activity is pretty much networks of the networks, we doesn’t of business activity is pretty much networks with the networks, wheels within wheels.

    Second, completely agree with your thought that hardened applications will matter less going forward, as we have platforms that can do data management, lifecycle of APIs and micro-services, identity, and data management by simply applying logic and an abstraction layer. That’s the construction of applications going forward, the maybe we shouldn’t call them applications because it has the connotation of something that’s hardened, compiled, shipped and refreshed. They will be alive. We’re still a long ways away from this, I think this is still a Silicon Valley sentiment, because for a series of interviews I’m doing with SaaS ISVs for Cisco, one of the findings is that only a small handful are using integrated PaaS platforms to build their offerings. It’s still very very piecemeal. But will get there, because the future seems so obvious. It’s just not evenly distributed, right? Thanks for the post

Leave a Reply

Your email address will not be published. Required fields are marked *