Sandhill Group contributor Erik Keller has written one of the clearest validations I’ve yet seen for innovation. In doing so, he confirms my thoughts that innovation is the only true way to differentiate your practice from any other providing largely time based services. In a piece that deserves and will no doubt receive, extensive analysis, Erik says:
Sellers of technology have a fantastic opportunity to take advantage of the wrong-headed, common wisdom which preaches that all applications will be bought and purchased from a single vendor. There are many opportunities for innovation around the new and growing option of building applications.
the really great news is that many of the pieces you need to get going on this are available right now. I know a number of vendors who are targeting practices they believe are prime candidates for this kind of approach. On the buy side, I also know a number of firms where partners are working through the implications of these new, stitch it together on the fly apps. The results to date are staggering.
I do not agree with everything that Erik says and I believe there are some important unanswered questions that need exploring. For example, Erik contends that core packaged applications like Financials, CRM and content management will continue to dominate – ‘for the time being.’ I’m not wholly convinced.
There is growing evidence that UK practitioners welcome the opportunity to offer clients alternative computing models for their book-keeping and draft accounts. I have a podcast in the pipe that I believe provides a compelling picture.
Payroll for many SME’s is often entrusted to the local firm of CAs. I’ve also seen cases where firms are seriously starting to question the value they really derive and can pass on to clients from on-premise offerings like Sage. It cannot be long before practice management applications come into question.
Why for instance would you invest in at premise storage or at an expensive off site location when you can utilise one of the growing group of online storage services? That’s one PM plank down. Now if it’s being stored online, information might as well become part of a practice’s collective intelligence. So now we can start thinking about extracting intelligence from those online, tagged documents and applying it to our client groups. Think I’m talking nonsense? Here’s a great recent example from the enterprise world.
Do a Technorati search on SAPPHIRE06 and look at the richness of information there – 47 posts and counting. I’m not saying that because some of my favourite bloggers have posted profusely. I say that because of the information contained in those posts. So let’s say you’re in a position where you’re client is looking at a potential SAP purchase. It’s not an everyday occurrence I know but stick with me. Would this resource, made freely available and accessible by the Brotherhood at a cost to them of some time be of value to you?
Now think about how you could incorporate that sort of information into your decision making. And say for example you want more information on say Jason’s take about Duet? What might you do? Post a comment on Jasons’s blog. Including your email address so you could take the conversation offline. To help you make a decision and create relationship.
Now – how do you take the newly acquired knowledge and feed that back to your decision making process? How do you advise your client in new ways? We’re already a million miles away from accounts production but we’re now doing something far more valuable and interesting. And all the while this is going on, your time is being automatically being allocated to your client’s time record by the computer through which you research SAP, probably using Technorati but also Google, Bloglines, Blogpulse and any other number of online services that are trying to give you the information you need, mostly for free.
I didn’t mention that did I – sorry. By this stage, routine practice activities are pretty much commoditized, outsourced or online because it just makes sense and you’re concentrating on adding value. By the way – most of this is not sometime in the next 2-3 years. It’s pretty much NOW.
For a longer, very different and more technical take, please see Den’s Enterprisey Foghorn. (Proving it is possible to hold contrarian views in the same breath?)
Technorati Tags: innovation, practice development, SAPPHIRE06
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Dennis – thanks for the link – VERY interesting viewpoint … rather in line with my own.
Dennis,
Thanks for the kind words. The Duet post in question is a joy because of who has contributed to the dialogue. Dennis Moore, who oversees Duet at SAP, posted a very lengthy respone in the comments and Sangeeta Patni, someone who openly questions the value of the Duet partnership also responded.
These are two people who, by and large, may not have ever met to debate Duet; and certainly not in an open forum. Now, through the power of social media, they've met on my humble little Typepad blog to discuss the pros and cons.
Great stuff. Also, I agree that Erik's piece is thought provoking (and one he hinted was in the works when we met in Orlando). I'm going to craft a response when I get the chance in the next day or two.
Jason
Good points Dennis. As to your issue about why I am not so bullish on how quickly companies will want to swap out core transactional systems such as financials, it is because of cost and time particularly for larger companies. The big boys (Fortune 200) spent lots of years and $250 million and up each installing this stuff replacing systems that had been in place for 20 plus years. Most of them have just finished rationalizing and recentralizing all the dinky instances that had to be installed during the mid to late 1990s as the then client-server technology did not scale. Ironically, while many of the big companies were installing stuff, the smaller ones were sitting pat on old versions of BPCS, MAPICS, MAN-MAN, etc. I suspect that is a key reason for the large SMB growth that you cite. Also it is a lot simpler (and cheaper) for these smaller companies to make the change.
Part of this movement is pendulum swing that is facilitated by a fundamental dissatisfaction with the ways in which packaged application vendors play the game, sell their products and support their customers.
But another, and perhaps more important issue, is that companies have lots more options available today beyond just buying and building as subscription (via hosting or SaaS) and sourcing (BPO and strategic) are key options that buyers are considering and buying.