The End of Expensive Software

Part Two - From Software To Productivity

In Part One, we discussed the commoditization of enterprise software in the social sector which is leading to low prices and similar products.  Enterprise software refers to software that helps organizations administer a variety of their core tasks from managing content (like web sites and documents) to data (such as contact, member, or financial data) to communications (such as email newsletters).

In Part Two, we look at one of the main implications of this trend.  That is, this commoditization of software will result in a re-focusing from technology towards productivity.  Said another way, in the future social sector practitioners will all focus less on the technical aspects of software (e.g. features, technology, programming languages, etc.) and more on how to get the work done better and faster using technology.

You can see this progression today in mature software markets like email or word processing – typical users rarely discuss the underlying technologies.  They worry instead about productivity issues like how to use software effectively in their organizations, how to access training and support, and how to get data in and out of their systems.

With enterprise software in the social sector, many practitioners are still struggling to make this transition from software to productivity.  For one thing, enterprise software is still relatively new in many organizations and is still maturing.  So, it’s understandable that staff will need to learn how to use it effectively.  But, in addition, many organizations are still stuck in a technology-centric view of software at the expense of achieving real productivity improvements. 

An Example – Features vs. User Scenarios

One subtle but powerful example is the way that most social sector organizations select software.  That is, they tend to focus on software features to the exclusion of their own work process and user scenarios.  For instance, the "feature comparison matrix" is the tool of choice for software selection in the social sector.  Enormous resources and energy are spent by organizations and consultants on developing these feature charts.  Unfortunately, many organizations make decisions based on these tools without first asking "How exactly are our people going to use software to get their work done?"  This cart-before-the-horse approach often results in a poor fit when it comes time to try and improve actual day-to-day productivity with the selected software.

So, in addition to the feature-comparison matrix (or as a replacement of it), we recommend that productivity-focused organizations build their selection process around a list of their own user work scenarios.  For example, these scenarios might include the following:

  • "Staff member creates an email list of supporters with specific criteria"
  • "Staff member prints mailing labels for recent donors"
  • "Non-technical staff member adds pages to the web site"

This "features matrix" vs. "user scenarios" contrast is but one of many examples of how technology-centric thinking overshadows productivity-centric thinking in the social sector.  Many other productivity-oriented issues like best practice development, professional services, training, and support are too often an afterthought.

Fortunately, as software becomes commoditized, social sector practitioners will be able to shift resources and focus to where they belong – on productivity.  In an effort to push that process along, we have highlighted several issues (and pitfalls) that will distinguish the future of software in the social sector.

The Rise of Productivity

Below we have highlighted several software related factors impacting productivity-focused organizations. 

1. The importance of building software skills and knowledge internally

The most important factor for achieving software productivity is to build skills and knowledge within an organization. This is largely a matter of staffing and budgetary priorities.  Ideally, an organization will take the time to develop and document overall operational systems that include effective software usage.  And it helps if they can hire staff who are comfortable using technology. Although this scenario may currently be the exception rather than the rule, the more software becomes commoditized, the more staff, resources, and priorities can focus on productivity rather than on technology.As social sector software matures, the key to productivity will be the acquisition, maintenance, and use of knowledge and skills to accomplish organizational work and goals.  This may seem like a blinding flash of the obvious.  But, as mentioned above, the predominant focus on software technology and features often distracts from the underlying issues of knowledge and productivity.

2. The importance of accessing professional services, training, and support

Another important factor for achieving software productivity is accessing quality consulting services.  That is, social Sector organizations trying to use software effectively often rely on outside consultants or firms to help them with usage issues like best practices, process improvement, training and support.  These are the day-to-day activities of effective software use.  And they are surprisingly difficult for social sector organizations to access consistently, affordably, and at a high quality from outside vendors.  There are several ways these kinds of services are typically delivered.

Some larger software providers sell these services as part of their overall solution. But, the trade-offs are that these services can:

  1. Be very expensive,
  2. Be low quality depending on the company and your account manager, and
  3. Lock you in to a particular vendor. 

Some smaller technology companies and consultants (often focused on open source technology) also offer these services.  But, the trade-offs can be:

  1. Lack of broad knowledge,
  2. Turnover and lack of consistency, and
  3. Focus on “techie” issues at the expense of training, support, and other productivity issues. 

And, in contrast some consulting firms will only focus on these productivity services such as consulting, training, or support.

Overall, there is still an unfortunate structural challenge in the sector.  That is that productivity consulting services focused on usage, best practices, training, and support are undervalued by social sector client organizations.  These productivity issues and services are viewed as of secondary importance to the technology issues.  Instead, they should be the primary focus.  Fortunately, this orientation is changing as software commoditization progresses.

3. The importance of documentation

Documentation is an underappreciated productivity factor that impacts the development of skills and productivity in an organization.  Although an organization will rely heavily on documentation after software is implemented, during the selection and setup process, documentation is often overlooked until it’s too late.  Typically the larger, proprietary systems have extensive documentation.  In contrast, the smaller proprietary or open source systems lack user-friendly documentation.  So, although these open source systems are described as free or low cost, the “total cost of ownership” can be high as social sector organizations struggle to use these systems effectively without adequate documentation.

4. The importance of usability

Usability (or ease of use) is another underappreciated factor that impacts software productivity and the development of staff skills and knowledge.  This is especially true in the social sector where organizations cannot afford extra training to compensate for poorly designed software. When software is easy to use, the staff will use it, the training and support costs will be relatively low, and productivity will be achieved.  When software is difficult to use, the opposite will occur.

Usability is difficult to measure because it is largely qualitative.  And, it’s easy to confuse ease-of-use with a slick interface.  One of the best ways to determine usability is to use the system before you purchase it.   Good software providers will make this possible.

Another dimension of usability is ease of upgrading.  Good enterprise software should be constantly evolving and improving as features are enhanced, added or fixed.  Clients need to take advantage of that evolution by ensuring that they can easily access new code as it is introduced through smooth upgrades.  Software that doesn’t include automatic or easy upgrades will tend to fall behind in areas of usability and the total cost of ownership will go up.

Top Pitfalls to Avoid

Whether building productivity skills and knowledge internally or accessing it externally, there are a number of pitfalls that organizations implementing software should be aware. Below is our “Top 8 List” of these common challenges that social sector organizations face: 

#8 - "We didn’t purchase training and support."
High quality professional services, training, and support needs to be paid for.  Although these services can be bundled with the cost of the software, if they are treated as an afterthought by either the vendor or the client, the risk is that they won’t be valued and won’t be high quality.  In some cases, organizations never actually purchase training to begin with and are then left with software that they can’t use effectively or unexpected costs.

One structural problem for many software companies is that their business models focus primarily on software fees rather than on professional services fees.  As a result, these services are either very expensive or low quality or both.  And the problem for many client organizations is that they don’t have a lot of money and what they do have they spend on the purchase of the software rather than the use of the software.  These organizations should spend less on the actual technology and more on the usage.  If a software provider does not have a business model that is clearly focused on long term client services and on using the software, then there is risk for the client.

#7 - "We don’t have an internal expert."
Having purchased one or more software programs to help do their work, many organizations don’t have an internal expert who knows how to use the software.  This results in lack of usage and frantic last minute calls as various people are suddenly tasked with short-term goals.

#6 - "We focused on features instead of on how we want to use software."
As mentioned above, many organizations focus on software features to the exclusion of their own work processes.  Their main focus should instead be on developing a clear list of user scenarios that describe how they want to use technology in the organization. 

Compiling a detailed list of these user scenarios will lower the risk of having a poor software implementation and low overall productivity.

#5 - "There is little ongoing training or support available."
This "love 'em and leave 'em" scenario happens frequently with smaller software vendors who are primarily focused on setting up technology but not on long-term, ongoing relationships.  One example are small, open source consultants who have developed a specialty in setting up and customizing open source technology but don’t focus on long-term client upgrades, training, services or support.  Frequently the skills related to being a great technology consultant are often different from the skills related to helping people use technology effectively over the long run.

#4 - "The training and support is too expensive."
This happens frequently with proprietary software vendors where a client is locked in to the vendor and does not have many alternatives for accessing expertise.  It also is common with large vendors that have high overhead where the cost of providing the training is high.  In these cases, this high expense is passed along to the client.  In fact, the business models of many technology companies do not allow them to focus extensively on non-technical support activities.

#3 - "Our software vendor was focused on the initial setup and not very focused on helping us use the system."
This is a common situation with technology and software companies large and small.  The skills that create great software don’t necessarily translate to creating great support. 

#2 - "We’re locked into an account manager who doesn’t help us."
This happens most frequently where a client is locked in to a software vendor for ongoing professional services and there are few good alternatives for the support.  The client in this case is typically stuck with their account manager and even if the company and software is good, a lousy or busy account manager can result in a bad experience.

#1 - "Our staff person who knew the system left."
This is an especially big problem with complicated software.  Frequently, one person in a client organization will go through training on the system and will have all the knowledge in their organization.  When that person leaves, the organization faces the task of training someone else.

Conclusion & Prediction

The social sector organizations that realize the true potential of enterprise software will be those that are best able to shift from the “technology-centric” view of software to a “productivity-centric” approach.  As software becomes commoditized, organizations will no longer need to devote as much time, resources, or focus on risky and expensive technology decisions.  Instead, their challenge will be to build their capacities and access expertise needed to realize dramatic productivity gains.

Prediction - The rise of productivity consultants

Since software prices in the social sector are dropping and since it is expensive for software providers to provide services (such as design, training, support, consulting, etc.) to clients who are price sensitive, there will increasingly be specialization in these areas.  That is, your software provider may not be the same as the organization that provides your ongoing services and support.

This situation exists today and the trend is growing.  In particular, the open source movement includes many companies and individuals that specialize in implementing and supporting systems that are created by others.  However, even in these situations, the consulting currently provided is often technical and does not adequately address ongoing productivity issues like upgrades, best practices, training, and support. 

In the future, as the social sector shifts from a "technology-centric" to a "productivity-centric" approach, clients will ask for ongoing productivity services and that companies and consultants will emerge to provide those needs.