From Charles Darwin’s seminal study, Origin of Species:
“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change”
– Charles Darwin
This was the core philosophy behind his ground-breaking book, and has been paraphrased often as: adapt or perish.
Without doubt we are now entering a new era of digital disruption. Wherever you look, large organizations are either reinventing themselves (called self-disruption) or they are struggling to survive. Over the years we have seen once great companies that could not adapt fall by the wayside. Remember Blockbuster Video? A power house video rental company that could not adapt to the change to an online video consumption world. Now compare and contrast that with Netflix, a company built on the ability to rent DVD’s online via snail mail! Their world changed too, but they changed ahead of it, and rebuilt their entire business model. Now we see Walmart as a massive online presence, at the same time Amazon is purchasing Whole Foods. Even companies like IBM and GE are showing signs of struggling in this new era. Our world is being turned upside down by technology. And today, AI is leading the charge. In five years the corporate landscape will look very different than it does today.
Meanwhile, the Cloud introduced disruption to the Enterprise software market some ten years ago, and organizations have been moving in droves at an ever-increasing pace. To the extent that companies like Oracle have now reinvented themselves as Cloud providers. Something completely unthinkable just three years ago.
But, even more important than the Cloud, AI has burst to the forefront of our lives. And it’s here to stay.
“Conversational AI-first will supersede ‘cloud-first, mobile-first’ as the most important high-level imperative for the next 10 years”
– Gartner Sept 2016
For those of us that live in the world of Enterprise software, the big questions are: how will the current Enterprise software vendors deal with this disruption? And what should you do, given that you are probably in the process of selecting a new Cloud vendor. Knowing full well that your next decision will have a massive impact on your organization for what may be the most impactful decade in Enterprise software history.
Given all that, we believe that the most important aspect of any Cloud vendor for the next ten years will be its ability to be an enabler for adapting to new disruptions, and by not being a roadblock to innovation. Put simply, does that vendor provide the tools and flexibility needed for you to survive in this new era of digital disruption?
To paraphrase Darwin, the winning Cloud vendor won’t be the biggest, or the one with most features. It will be the one that provides solutions that can most easily be adapted by their clients to allow them to compete in the new era of digital disruption.
Because of this we do have concerns about the following recent announcements by Workday’s CEO, Aneel Bhusri, with regards to opening up access to their platform.
“Right now what we’re seeing is what I’d call small pieces of additional functionality rather than applications that have a larger purpose. So the potential impact is limited. You can bring whatever code you want but, we curate and certify everything that goes into that platform and will continue to do so. We have to because we have a responsibility to ensure that customers remain compliant”.
“We are approaching verticalization and extensions differently to others. We are curating everything and will discuss our plans with partners so that there is a clear line between the areas we will enter and those where our partners will have a free run”
– Aneel Bhusri
The bolded comments are the ones we feel are most pertinent. In the new age of digital disruption, agility and innovation are the key requirements of any organization. Without these things, you cannot adapt. Having an Enterprise system that requires curation and certification will be an impediment to your ability to adapt to changing requirements in your world. And one thing we know for sure, is that change is coming, and it’s coming fast.
Our recommendation is to keep your options as flexible as possible. Do not invest any more in deprecated technologies, embrace the Cloud, embrace AI, and use this new era of digital disruption to adapt your Enterprise system to the new needs of tomorrow. And, above all, do not lock yourselves into a technological blind alley.
This is our very firm, high level, opinion of what is important. And, as a UX company, we believe that the next era of Enterprise software will be characterized by how it interacts with employees, managers, students and faculty, and will become less focused on how happy the back office is.
Organizations that focus too much on back office satisfaction will continue to see poor productivity and satisfaction in their organization, as well as high operational costs associated with unnecessarily labor-intensive processes.
The following video shows the kind of things we expect to become the new normal in the Enterprise:
And this really is the core of the issue as we see it. Workday’s reaction to the new era of change is to institute a model of curation and certification. This is very much a response we would expect from a company that is very much focused on back office usage of their software (which is excellent, btw). Unfortunately, what is missing is the recognition that the market is about to dramatically change, and that they need to change with it. Being a cool back office HCM system in the Cloud was what got them to where they are today, but that most certainly won’t work tomorrow. Also, while curation and certification make sense in a back office world, it most certainly doesn’t work once employees, managers, students, and faculty start getting involved. This demographic expects innovation and agility, because that’s what they are seeing everywhere else. And for organizations to see reduced operational costs, and increased organization satisfaction and efficiency, they will need to start giving access to their Enterprise systems in ways they never imagined before.
To illustrate the mindset, the classic measures of SaaS Cloud providers’ success are:
- How many issues were created by the client?
- How satisfied are the back office staff?
- How satisfied do the back office staff think the employees are?
It doesn’t take a rocket scientist to see that these are terrible indicators of success. Low issue counts can be achieved by giving as few people as possible access to the system, and by implementing the solution in the most conservative fashion possible. The theory being that the less people can do, the less things can go wrong.
And measuring customer satisfaction by asking the people who selected the SaaS provider what their opinion is, will always give you a false positive. Of course they like it, they (or their manager) selected it!
And asking the back office staff how happy they think the employees are will never give you an accurate rating. Of course they think everyone loves it.
Ultimately, what Blockbuster discovered (the hard way), was that improving the look of their stores, rearranging the shelves, and changing the rewind policy (remember that?) wasn’t good enough to save them. The things that worked when Blockbuster started were no longer relevant when Blockbuster finally went under. Netflix had it right, they saw the change coming and were agile and innovative enough to adapt.
This is the challenge facing organizations today and for the next decade at least. AI, and chatbots, combined with the Cloud, will transform how we interact with everything. Enterprise systems will no longer be the province of back office professionals, and will absolutely need to be opened up to every single person in the organization. Curation and certification will not be possible. UX innovations and AI will go hand in hand, and will require Cloud vendors to provide the tools (via PaaS), and an open lane (no roadblocks) to allow their customers to take advantage of the massive organizational benefits this will create.
Getting your organization ready to thrive in this new reality will be the most important thing you can start doing today. To find out more, please contact us.