“If an Opportunity is Lost and No One Sees It…”
Software doesn’t have to be user friendly to create value, but it sure helps. In a few specific instances, like supply chain software, you care more about its ability to route shipments optimally than a friendly user experience. But it’s a choice that shouldn’t have to be made. A better user experience improves the likelihood that people in your business interact with a solution effectively enough to leverage its full capabilities.
The level of user adoption closely correlates with the realized value of the software (vertical axis). On one end of the spectrum, web 2.0 sites like eBay and YouTube derive almost all of their value from the size and activity of the user community. At the other end, integration and algorithm-based solutions (e.g. supply chain optimization) rely much less on user adoption to create value.
While their can be many ways to achieve user adoption (top down mandate, training, usefulness of the software), for solutions where user adoption drives value, it is the user experience (horizontal axis) that most impacts the rate at which users will embrace the solution.
Among business applications, CRM has the strongest correlation between value realized and increased user adoption. Intuitively since sales, service and support and partner relationships are predominantly people-driven processes, it only makes sense that CRM solutions add value only with strong user adoption.
When evaluating CRM solutions, CIOs should add the vendor’s own adoption of its solution to their evaluation criteria.
CIO – Tips of the Trade
Ask your vendor’s sales representatives to demonstrate how they use their own CRM solution every day. Ask for a support engineer to demo their services capability and look for a partner manager to walk you through their partner capabilities.
Because software companies incur almost zero marginal production costs, the value of CRM in managing sales, services and partners is more important than for almost any other industry. Unlike with manufacturing or supply chain applications, software companies should heavily rely on CRM and be their own best references.
Chances are that if you compare the internal operations of Salesforce, Oracle and SAP by this criterion, the on-demand vendor – Salesforce – will come out on top. For Salesforce employees, it’s as easy as having them demonstrate a browser. Oracle employees may be confused unless they came from Siebel, in which case they may be able to show you Siebel – just one of the three sales components of Oracle. SAP employees may just cancel the meeting in order to avoid stumbling through such a painful experience.
Its not that Oracle and SAP don’t want to provide a user experience as easy as Salesforce’s, its that structurally they can’t. The challenges of innovating without breaking upgrades, incentives focused on license sales over user adoption, and maintenance revenue expected to deliver 80%+ profitability create a viscous misalignment between their goals and the customers’.
A Better Way
On-demand solutions like Salesforce.com have a business model and technology that aligns well with customers’ goals. Their success correlates directly with their customer’s adoption of the solution. In addition, multi-tenant systems allow these vendors to deliver innovation quickly to their entire customer base. Every Salesforce customer is, in effect, running on the latest release, and each customer’s customizations “survive” upgrades without any effort on their part.
The power of Salesforce.com extends beyond the ability to deliver innovations. They also function as a software platform, allowing third parties to extend functionality and increase user adoption.
Appirio’s Yahoo! Widgets for Salesforce.com illustrate this point. These free tools, written by Appirio as an independent partner, extend the user experience of Salesforce.com. For example, the “Opportunity Knocks” widget serves the needs of a very specific user segment – sales executives. The widget runs on the desktop much like a stock ticker. It frees the user from continually opening and refreshing a browser window just to get a real time view of activity related to changing sales opportunities. In the few seconds between emails, conference calls and meetings, a sales manager can keep abreast of important sales activity.
Also, because Salesforce is a on-demand service with an open web services API, the widget works immediately for every Salesforce customer licensed to user the API.
50% of software functionality paid for by businesses sits as shelfware
-Butler Group Report
ROI projections from vendors simply assume or ignore user adoption. Yet, without users embracing the solution’s capabilities, the business will struggle to achieve the important goals targeted by the original business plans. Shelfware and underutilized software will consistently fail to reduce your cost of sales, improve your inventory turns or achieve any other business objective. To use Salesforce.com’s famous phrase, to the answer to “No Shelfware” may well be “No Software.”