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February 03, 2004
New Enterprise Software Business Models
Bruce Daley is moderating a discussion on new enterprise software business models. The following is a summary of a lot of comments from many people.
Subscription software model has significant benefits for software vendors: they don't have to spend large amounts of money in maintaining old releases, ensuring backward compatibility, and so on. Another advantage is that ongoing revenues are easier to predict. In the traditional perpetual license model, customers wait for the last two weeks of the quarter and beat you up on price. You never know going into the last two weeks what your sales will be.
The downside of the annuity business is that you've got twelve closings per year instead of four. You can't catch up if you miss a month. You have to perform every month to keep customers and keep the revenue flowing. The other side of the coin for maintaining old releases is that its much more difficult to do revolutionary upgrades because everyone is coming along at the same time.
06:36 PM | Recommend This | Print This
CRM and Social Software Discussion
The discussion that followed Ad's talk wasn't supposed to be about the link between CRM and social software, but that's how it turned out. Some good out-takes from the discussion:
Mark Sunday (CIO, Siebel): 95% of all the issues that a CIO faces are either governance or legacy. Companies are running at less than 30% efficiency and its largely an IT problem. Yet, because of governance and legacy issues, they can't solve those problems.
Ad Nededof (Chairman, Genesys): We present ourselves (in our marketing) as perfect and then customers call and we're not. There's a perception gap between how we think we're doing and how our customers think we're doing.
Ross Mayfield (CEO, SocialText): Process breakdowns require that people route around the failure in process and get things done. Informal networks are how companies get work done. Social software is about strengthening those informal networks. Social software gets the information out of email and attachments and brings it "above the fold" so that it can be used, linked, and indexed.
Ben Smith (CEO, Spoke): The majority of sales professionals prefer an introduction to a sale and social networks (like Spoke and LinkedIn) let people use their contacts to get introduction to people they need to meet.
Ad: Doing business is making friends. Helping people understand other cultures is important.
Mark: CRM systems try to put structure around unstructured data. There's real potential for using social software to create the next generation of CRM systems.
Chris Roon: eBay is a great example of social software applied to a particular purpose.
Me: CRM systems follow Sarnoff's law: the value of the system is linear with the number of contacts. We don't let people build communities within our CRM systems. Thus we never see Metcalf or Reed scale benefits.
Ben: these kinds of systems have to work bottom-up because people own their relationships.
09:43 AM | Recommend This | Print This
Ad Nederof on Customer Service
Ad Nederlof, Chairman of Genesys and author of Customer Obsession: Your Roadmap to Profitable CRM kicked off this morning talking about customer service. He spent considerable time on the results of a survey they did. The bottom line: good customer service is the surest step to customer loyalty and the surest way to differentiate yourself.
he talks about what customers want:
- No waiting. Why don't more companies let you enter your phone number and then call you back?
- First call resolution -- no transfers. Know who's calling and know their history with the product.
- Personalized service. Refer to past experience. Let customers know you know them. Only possible if you have all the relevant information.
- Finally, customers want to be satisfied.
There is very little middleware that links the ERP systems that customer service depends on (such as CRM systems) and the relatively unstructured world of faxes, telephone calls, and emails. The goal ought to be optimizing the communication with customers. VOiP is a significant enabler in this regard. Lots of companies are working on this but proprietary routing (of all communications) is a significant hurdle.
One of the thoughts I had while listening to Ad is what recent innovations in the social software space inform or affect customer service. That, of course segues right into some interesting Cluetrain links.
08:49 AM | Recommend This | Print This
Enterprise Software Summit
I'm at the Enterprise Software Summit today. I arrived last night in time for dinner and had some great conversation. Ross Mayfield is here as well and blogged yesterday's events.
08:30 AM | Recommend This | Print This
Jim Flowers on eVoting
Jim Flowers has responded to my post about the eVoting panel with some good, from the trenches, perspectives. Jim has been involved in Georgia state government in a number of posts for some time. He says "For Georgia going back (a question proposed for the panel) is simply not an option."
s the new system perfect? No. Will printing ballots solve the problem - perceived or otherwise? No. Once your copy leaves the station - the integrity is broken. And, auditing a paper trail takes tremendous resources - a cost not yet counted in the writings I have seen. Audit processes similar to the financial sector and security sector can be implemented to check the integrity of the machines - and that is good enough. There are far more important issues threatening our democracy (like PATRIOT, lack of voter participation, etc) which make this issue just one of many to weigh in our policy analyses.From Jim Flowers' Radio Weblog
Referenced Tue Feb 03 2004 08:06:04 GMT-0700
Jim's fundamental point, I think, is that getting real people with real problems (i.e. elections office staff) in the debate will add significantly to level of discussion and move us closer to real solutions.