- Many applications are designed more to be sold versus to be implemented.
- This impacts the implementability of applications.
The reader will also understand why the marketing literature reads the way it does and why they need to ignore the “sell-ability” parts of it and seek instead documentation that reflects the “implement- ability” of the software. They will better understand the types of questions they need to ask of references and check whether they consider the reference to be one the company provided merely to add to their “sell-ability.” By understanding the difference between sell-ability and implement-ability, it’s easier to understand where the real interest lies for the entities that provide information to the selection process. Many pressures cause software to be developed into what you see as the final product. This information sets the stage for the end of the chapter, which will focus on how to select the most implementable solution. It would, of course, be quite nice if software were always designed to be functional rather than sold. Vendors have a limited amount of resources that they can apply to the development of their products. There is a general misimpression that software development occurs along the lines of what is desired by customers, which should lead to desirable outcomes. This sounds plausible enough.
However, the reality of software development (and this applies to all enterprise software to varying degrees) is that there are competing agendas: not only the customers’ agenda but also the vendor’s and even those of third parties such as IT analyst firms. This problem is exacerbated at the larger software vendors where the strongest incentives exist to throw things over the wall. I recall having a discussion on this topic with representatives from the vendor PlanetTogether. I asked them why their software seemed so much more usable than other software in their software category, and one example they gave was that the company was just too small to throw things over walls and develop functionality that had little practical implementation value just to get a sale. The smaller the entity, the more affiliation each individual has with other individuals, the more they personally know them—can receive negative feedback for aggressively perusing one’s personal agenda at the expense of others.
Impressing the IT Analysts
So far I have only explained the agendas internal to the vendor, however it does not end there. Because vendors want to score well in IT analyst ratings, they are under pressure to match the vision that the IT analysts have for their software category. The same issue applies for software investors. Software investors have a particular story that they find more appealing for investing. For instance, Adobe is well-known for its suite of design applications that includes Photoshop and Illustrator. However, Adobe decided to move to a SaaS-based solution, which meant that users now rent the Adobe creative products for a monthly fee. While there were several reasons for this change, one stated reason was to stabilize the company’s revenues (moving to a monthly charge rather than seeing its revenue bunched up after their upgrades are released), thus making Adobe more appealing to stock analysts who prefer to see stable revenues.
However, was this the best-combined solution if customer’s interests were accounted for? Many people that use Adobe’s creative products don’t think so. Even if we limit our discussion to just the vendor and buyer, there are multiple people in multiple departments who often have competing objectives. If we take just the vendor’s competing objectives, for instance, one of the pressures comes from the need to have implementable software that buyers can actually use. However, other pressures come from the need to sell software. The agendas of those who sell software and make software implementable may sound complimentary, but in fact, they are not at all complementary and are a major source of friction within vendors.
The Case Study of i2 Technologies
I once worked for a software company called i2 Technologies, which is a textbook example of what happens when marketing and sales completely co-opt product development. Not only did i2 Technologies come out with too many new product enhancements, they simply came out with too many new products. I2 Technologies fell victim to Enron Syndrome—too much confidence in one’s innovation, too much focus on the stock price rather than the business, and accounting irregularities (necessary in order to keep continual improvements in earnings). Most of i2’s best products were the first ones they developed, before the media created an echo chamber for them and Enron Syndrome took hold. I found out first hand as a consultant implementing projects the new products were universally the problem applications. Few of these products actually worked and it eventually brought down i2 Technologies, once a thought leader in its space. The company was acquired cheaply by JDA. I worked in consulting within i2 Technologies, and there was a great deal of friction between marketing/sales and consulting because we were not able to deliver reference-able accounts because the new software was essentially not implementable.
An important component of how companies rate software is how many areas of functionality the software includes, which in turn encourages vendors to add more and more functionality. However, this continually-added functionality also increases maintenance and quality problems. That is, it is easy for a software vendor to bring out more functionality than it can reasonably maintain. Vendors do this because Marketing and Sales repeatedly go to Development and say, “If we only had this area of functionality we would get this big client.” Buyers who have purchased software already constantly ask vendors for adjustments to the software, and in most cases they are not willing to pay for these improvements but simply want them rolled into the next version of the software. However, buyers have a self-centered view of the software, only seeing the things they want to do in the software.
Generally, they do not understand the vision of the software, and are mostly unconcerned as to whether or not other buyers are also interested in using the software in the same manner. In essence, clients would like to turn a software vendor into their personal custom-development shop, while vendors need to make sure that the functionality they develop can be sold to multiple clients. Sales and Marketing know what they can sell, but are frequently inconsiderate of how adding new functionality can negatively impact the maintainability of an application. Therefore, the buyer, sales and marketing, with their focus on adding functionality, have a much more limited view of the software product than does Product Management.
Poor Product Management
The product management process maintains this list of product enhancements (some driven by customers, some internally driven, some driven by sales), estimates how much the enhancements will take in terms of time and money, and prioritizes the enhancements that have the best potential to “improve” the software so that these are worked on first. I used the term “improve” in quotation marks because it is a subjective term. To sales, improvement means it will make the software sell better. To the buyer, it is something that will allow them to better meet their particular business requirement. To an implementation consultant, an improvement means the software will be easier to implement. To the product manager, “improve” may mean that the change is consistent with the long-term vision of the product. Therefore, the definition of the term “improve” very much depends upon who you are and your incentives and motivations.
The Dynamic Nature of Software
Software is like a living organism in that it is constantly growing and changing and has a certain life cycle. The lifespan of software is relatively short compared to other products, some reasons for which I have listed below:
- Application software relies upon underlying layers. These layers include things like databases, operating systems and hardware. When these underlying layers change, the software must also change. For instance, if an operating system falls out of favor, the software must be ported to the new operating system. Software is designed to work on a particular category of hardware. When the hardware changes, the software must be rewritten. For example, there has been a movement from single-processing servers to multi-processor servers. When this occurred, some vendors (particularly those who sell high-performance applications) did not place porting multi-threaded processing high enough on the development prioritization list, so are still only using single processors.
- Software is a rapidly evolving product category. Applications must be updated constantly or they become outdated. There can be classic cars—cars that you wish they still made—but classic software is really just uncompetitive software. If you were to go back and review software from a decade ago, you would notice that the software appears dated compared to current designs. In fact, much of the software we use has not been around that long, and while an application may have the same name as what was sold as the same product a decade ago, it is a very different animal.
- Larger vendors often acquire successful and innovative small vendors. When this happens, the most common outcome is for the acquired vendor to stop being a leader in their category. The acquiring vendor simply procures the smaller vendor’s customers and stops innovating with the product. Many of the employees of the acquired firm, particularly those most responsible for product innovation, leave the merged company. Acquisitions are in fact one of the prime causes of a software product becoming irrelevant.
- Under constant pressure to add functionality, applications can become so high-maintenance and difficult to use that they lose their original benefit and become vulnerable to less complex products that work more efficiently. This phenomenon was recognized by the blogging platform WordPress. WordPress is the most popular blogging platform in the world, and powers many of the blogs and websites that we all read. I have been working with the software since 2007. This highly respected software is free and has grown enormously since it was originally introduced. Essentially, WordPress receives an unlimited number of requests to add functionality to its software. However, early on it decided to not develop the product to meet all of these requests, but instead to allow plug-ins. WordPress simply allows its software to interoperate with third party software vendors (most of them do not charge for the software they create), and in this way WordPress is not responsible for developing or maintaining those plug-ins. This system has been extremely successful and has allowed WordPress to continue to grow with a seemingly unending number of plug-ins. WordPress is not distracted and instead can concentrate on what it does best, which is continuing to develop the core WordPress software.
Unfortunately enterprise software does not work like this, and therefore can easily grow unwieldy under the new functionality, which results from constant requests for improvement.
Adjusting the Software Selection Approach to be Focused on Implementation
I have explained how software development and software vendors tend to work in order to help those who perform a software selection to account for these factors and to make better decisions. The first thing that should be recognized is that the buyer will not implement all the functionality or get all of the functionality that they desire to work. A major strategy of vendors is to anticipate every need that a company could have by placing a very complete set of functionality in their applications. However, as this type of software tends to be difficult to implement, companies greatly overestimate their ability to implement functionality. Software selections are often performed with the incorrect assumption that the buyer will place more resources on the implementation and maintenance of the implementation than they actually are willing to place. To use an example from my implementation experience, when companies select statistical forecasting applications they often are attracted to the functionality of complicated forecasting methodologies (mathematics that drive the forecast). They have much less interest in hiring and paying people with forecasting education and experience to actually run the applications. Some things can be done to simplify forecasting for individuals; however, they should be able to understand what the application is doing. Many forecasting applications have thirty different forecasting methodologies, yet at company after company I see only a few of these methodologies used.
There is a way of automatically choosing among the different forecasting methodologies, and even though most companies cannot get this functionality to work, there are vendors for which this type of selection is automatic. Secondly, there are many more practical areas of the forecasting applications that are just as important to the success of a statistical forecasting application, yet these areas are not emphasized during the software selection. One can’t know what these areas are unless one was to implement and use the software oneself. This is a clear example—and just one of many examples—of how the buyer does not focus on what really matters in an implementation.
Making Realism a Priority
In the US during the past forty years, the bicycle has been transformed from a practical machine for transportation into a far less practical item that offers more ego-driven functionality (lower weight, aggressive styling, high turnover in design) and less practical functionality (ride-ability, safety, cargo capacity). The bicycle is an excellent example of the effect that marketing can have on an item’s transformation. Marketing can tell a company what will sell, but they have no technical expertise to help a company understand what will work in practical usage. In fact, in most cases they undermine the design proposed by engineers or developers. If we take the example of the bicycle in the US from the perspective of usability, the redesign has been a failure.
How can I say this?
Well it shows up quite prominently in the distances these bikes are ridden per year. Luckily, research comparing distances ridden per country is available. Countries such as Denmark and the Netherlands are renowned for not riding US-style bikes and for retaining their older designs. A visit to Amsterdam will quickly make evident to the traveler that the styles used by the Dutch are completely different from those used in the US. The Dutch bike is known for its distinctive and traditional design. By having two countries with opposite bicycle designs and by comparing the frequency with which these bicycles are ridden, we can gain a good approximation of how effective the changes to the bicycle have been in the US.
This is for the year 2000. And for that year, the average person from the Netherlands rode 21.2 times farther than the average American. In 2000 the US population was 281,421,906, while the Dutch population was 16,783,092. However, the Dutch as a country still cycled twenty-six percent more miles than the US.
This graphic really cannot be spun in a way that favors the US design of bikes.
What is clear is that in the US, marketing influenced the design approach, which concentrates primarily on the “coolness factor” of the bicycle—that is a bike that is designed to be sold rather than ridden. This leads to a large number of bicycles that sit in the garage, not being ridden. In the US, the average bicycle is ridden forty miles per year at an average speed of just fifteen miles per hour (meaning that the average rider rides for two hours and forty minutes—over an entire year). Furthermore, it should be remembered that bicycles are a much easier “selection” decision than the selection of enterprise software. However, the transformation away from usability on these consumer items, which are tested directly before purchase, demonstrates how marketing and impracticality can affect product development. Poor
Software Selection as a Contributing Factor to the High Failure Rate of Enterprise Software Implementations
Finding the root cause for the high failure rate of enterprise software implementations has been the subject of much questioning. Poor software selection is one of the causes. In fact, while the reasons are elementary and quite easy to adjust, they will not be changed because this is simply how companies have chosen to operate and entrenched interests and ways of doing things often do not change. Buyers are frequently more interested in factors outside of implement-ability and thus you cannot rely on enterprise software to be designed for implement-ability. Some people have a hard time seeing why this is the case, the logic being that software that is not as implementable will eventually lose to those competitors with more implementable software. The enterprise software market is not an efficient market. There are many factors that drive buyer revenues, and the implement-ability of software is only one of the factors. As discussed previously, many large vendors have partnerships with large consulting companies. These large consulting companies recommend their vendor partner’s software because doing so maximizes their revenues.
Smaller software vendors will never enjoy this relationship with large consulting companies regardless of how implementable their software is. Software failures are hidden and the feedback loop about software’s implement-ability is to a great degree broken.
While those in marketing will disagree, software cannot be optimized for both sales and implement-ability. Software that is highly implementable means that product management has accounted for the important enhancements but has not put every enhancement request into the product. A major objective of the individuals who support a software selection effort is to ignore much of the marketing hyperbole and salesmanship and instead find the applications that offer the best combination of functionality to match with the buyer’s requirements, while at the same time considering the implement-ability of that functionality. The buyer may not implement all of the functionality that they desire, and the implement-ability of the functionality is as important as whether or not the functionality exists in the vendor’s application. The overall theme of this chapter is that vendors have in many ways optimized their products to be sold rather than implemented effectively. Larger vendors are more prone to doing this than smaller vendors.
Software Selection Book
Enterprise Software Selection: How to Pinpoint the Perfect Software Solution Using Multiple Sources of Information
What the Book Covers
Essential reading for success in your next software selection and implementation.
Software selection is the most important task in a software implementation project, as it is your best (if not only) opportunity to make sure that the right software—the software that matches the business requirements—is being implemented. Choosing the software that is the best fit clears the way for a successful implementation, yet software selection is often fraught with issues and many companies do not end up with the best software for their needs. However, the process can be greatly simplified by addressing the information sources that influence software selection. This book can be used for any enterprise software selection, including ERP software selection.
This book is a how-to guide for improving the software selection process and is formulated around the idea that—much like purchasing decisions for consumer products—the end user and those with the domain expertise must be included. In addition to providing hints for refining the software selection process, this book delves into the often-overlooked topic of how consulting and IT analyst firms influence the purchasing decision, and gives the reader an insider’s understanding of the enterprise software market.
By reading this book you will:
- Learn how to apply a scientific approach to the software selection process.
- Interpret vendor-supplied information to your best advantage. This is generally left out of books on software selection. However, consulting companies and IT analysts like Gartner have very specific biases. Gartner is paid directly by software vendors — a fact they make every attempt not to disclose while consulting companies only recommend software for vendors that give them the consulting business. Consulting companies all have an enormous financial bias that prevents them from offering honest advice — and this is part of their business model.
- Understand what motivates a software vendor.
- Learn how the institutional structure and biases of consulting firms affect the advice they give you, and understand how to properly interpret information from consulting companies.
- Make vendor demos work to your benefit.
- Know the right questions to ask on topics such as integration with existing software, cloud versus on-premise vendors, and client references.
- Differentiate what is important to know about software for improved “implement-ability” versus what the vendor thinks is important for improved “sell-ability.”
- Better manage your software selection projects to ensure smoother implementations.
- Chapter 1: Introduction to Software Selection
- Chapter 2: Understanding the Enterprise Software Market
- Chapter 3: Software Sell-ability versus Implement-ability
- Chapter 4: How to Use Consulting Advice on Software Selection
- Chapter 5: How to Use the Reports of Analyst Firms Like Gartner
- Chapter 6: How to Use Information Provided by Vendors
- Chapter 7: How to Manage the Software Selection Process