Monday, February 13, 2006
the shrinking world of customized software
Businesses have largely given up on customized software, because they deem it too expensive. They switched to homogeneous off-the-shelf software, with ready-made interchangeable components. Much of this software was sold as kits, which would get a modest customization done by a systems integration house. The integrators made far more money than the kit vendors. Various forms of software customization and service could represent $7 for every $1 spent on the actual software license. Add to that the aggravating "plumbing" problems that the systems integrators seemed to find, and often never completely manage, corporate customers have sought greater simplicity from their software spending.
Vendors have responded with "on-demand" software solutions delivered over the web. No need to hire a systems integrator, we'll give you a complete package that meets all your needs, vendors promise. A good example is Salesforce.com, which offers a "customer relationship management" (CRM) system remotely delivered via the web. The solution is cheaper for the customer, and simpler too. Who could complain about that?
The drive to reduce costs and complexity is understandable. But businesses are often suckered by the myopic logic of software vendors, especially the new web application vendors. They speak of "cost of ownership", but restrict their definition of costs to only those items that appear in the IT budget. Now, IT budgets are considerable, but they generally aren't the predominant expense in service companies: employees are. How IT costs affect labor productivity are never addressed.
On-demand software pretends that business processes are so uniform and standard that you don't need to customize anything. Unfortunately, things are a bit more complicated than that.
If any business process could be successfully supported by uncustomized software it ought to be CRM. Sales is hardly a intellectually complex activity. But CRM has been a big failure, even after three generations of trying to get it right. I recently read a roundtable discussion by CRM vendors and IT analysts , and all admitted usability is still a massive problem. Sales people don't feel CRM supports their needs -- it is just a monitoring tool for the benefit of management.
Selling involves personal style, something one-size-fits-all software doesn't accommodate well. Forcing users to follow a set of rigid procedures doesn't translate into helping them make more sales.
What companies need is the ability to customize -- in a meaningful way. Yes customization was expensive and fraught with technical glitches. But the problem wasn't the concept of customization, but rather what was required to achieve customization. Too much focus and energy went into solving plumbing problems, not user problems.
On-demand vendors need to offer easy to use tools to allow customization of their offering. This customization needs to be fundamental, not cosmetic. Real customization isn't just about the UI, it is about the process of using the application in conjunction with one's daily work. Understanding real uses processes is gained through contextual research across a range of potential users. One size doesn't work. The task is to learn just how many different sizes are needed.