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The transition from "Internet" to "Internet+" has brought about a mixed market situation for enterprise software. While there are some commendable products available, the overall landscape remains unsatisfactory. Many believe that the enterprise software market still has room for growth. However, I contend that our target customers are no longer willing to invest their money in products that disappoint. They are unwilling to spend millions of dollars or more on products that offer questionable value, require extensive post-maintenance, or demand exorbitant fees.
The current situation of TOB (To Business) products can be attributed to several factors, although I won't delve into those specifics here. Nonetheless, I firmly believe that effective product management can significantly improve the prevailing circumstances. Before sharing my insights and methodologies based on experience, let's establish a common understanding of what enterprise software entails. This will ensure that we can reach a consensus and proceed in a fruitful direction. In my view, two criteria determine enterprise software: the target audience and the software's nature.
Enterprise software is designed for businesses rather than individual consumers. Businesses can vary in size, ranging from small studios and home offices, which I consider more aligned with the individual consumer market, to medium-sized enterprises. It is important to note that many companies have struggled in the small business market due to a failure to recognize this distinction and understand the unique product requirements in this segment. While "enterprise" often evokes images of large corporations like Fortune 500 companies, I believe that selling software to medium-sized enterprises presents similar challenges as selling to larger enterprises.
Enterprise software encompasses two broad categories: enterprise infrastructure software (e.g., security software, systems management software, communications software) and enterprise application software (e.g., marketing automation software, customer relationship management software, enterprise resource planning software). These categories exhibit notable differences.
Having established these points, the ten key insights I am about to share are equally applicable to both types of products, albeit with a differing focus.
I. Your product must be accessible
Imagine if the software purchaser were also the software user, resembling a TOC (Theory of Constraints) product. In such a scenario, the enterprise software market would be vastly different. However, this is not the case. Real users of the software, who spend their entire day sitting at their desks, face the challenge of using clunky software to make purchases, handle payments, and provide customer service.
Alan Cooper's book The Inmates are Running the Asylum accurately depicts the state of enterprise software. Unfortunately, only a few companies invest in interaction design, visual design, and usability testing for this type of software, leading to its underperformance. Such products, even if they manage to sell, cannot command a good price, let alone enhance efficiency.
II. Your product must function effectively
What's even more frustrating than software that is difficult to access is when most enterprise products simply don't work or require significant time and resources to develop temporary solutions before they can function properly. While I acknowledge that not all products fall into this category, there are always a few that are plagued with bugs after installation, leaving a negative impression. When this occurs, it is evident that something went wrong during the testing process. As a product manager, ensuring that the product works as intended and that the business achieves its objectives is the most fundamental responsibility.
III. Specialized products
Some companies wrongly assume that customers can directly express their needs. I disagree with this notion. Let's consider an extreme example: The marketing department brings a customer who has ample funds ready to make a purchase. They propose adding five additional features to the product, and as long as you agree, the customer will sign the contract.
At this point, you may hesitate. However, what you may not realize is that if you compromise once, you will become a provider of custom software, and the developed product may not have widespread usability. Perhaps, when your customer receives the product and realizes it doesn't meet their expectations or is dissatisfied with the features you designed, you find yourself in a predicament.
Therefore, it is essential to uphold your principles and prioritize developing products that cater to a broad user base, resisting the temptation to meet the needs of a single customer.
IV. Understanding typical users
Listening to your customers is crucial, but it's essential to engage with them frequently and actively seek their opinions. While they may not directly provide the exact product requirements you desire, they can greatly contribute to determining those requirements.
Identify approximately six exemplary target users as your typical users and involve them in collaboration with the development team. They can validate the product design, address queries, and test the software.
If the product fulfills their needs, they will be delighted to recommend it. Prior to releasing the product, it is crucial to ensure the satisfaction of at least these six users.
V. Catering to the sales channel's needs
Recognize the significance of designing products that align with the requirements of the sales and distribution channels. Different channels have distinct needs, and it is imperative to deliver value at each link in the distribution chain.
If you sell through a systems integrator, prioritize incorporating their specific needs into the product.
If you sell through a value-added reseller, consider the broad range of products they offer and their limited resources. Ensure that the product does not excessively consume their time.
Many products find themselves in an unfavorable position because they fail to establish a presence in the sales channel.
VI. Understanding customer and user needs
Many enterprise software products are designed based on the requirements of the individuals who pay for the product. Product teams often prioritize their perspectives, assuming that meeting their needs ensures the completion of the product. However, as mentioned earlier, their needs do not necessarily align with those of the actual users of the product. Different types of end-users, system administrators, and business managers have their own distinct requirements for the product.
VII. Simplifying product installation
Retail software developers understand that overly complex software installations can adversely affect sales. As a result, consumer software can typically be installed within minutes or even seconds.
Enterprise products tend to perform poorly in this aspect. Software vendors often assume that a dedicated system administrator will handle the installation, even if it is time-consuming. They believe that any issues that arise will naturally be dealt with by the administrator.
However, have you considered the scenario where the administrator is absent, on vacation, or overwhelmed with other tasks? At such times, the entire system is at risk of collapsing rapidly.
VIII. Product configuration, customization, and integration
Enterprises expect the software they invest heavily in to function properly, be compatible with other systems, and integrate seamlessly. This demand has given rise to a substantial professional services industry.
I believe that this additional expenditure is primarily a result of poor product design and software development. While there is nothing inherently wrong with providing software professional services, software vendors should strive to enhance the configuration, customization, and integration capabilities of their products.
If you doubt the possibility of achieving this, consider how Salesforce.com is rewriting the rules of the game, demonstrating that "anything is possible."
IX. Product upgrades
Upgrading enterprise software has always been a headache. While software vendors may view it as positive news, customers have their own businesses to run and don't want to waste valuable time and resources on software upgrades.
If installation issues arise or complex data migration is required, customers become even more frustrated.
In contrast, developers of popular software have long recognized this challenge and have found ways to simplify the upgrade technology and process. There are valuable lessons to learn from their approach for the realm of enterprise software.
X. Sales strategy
For many years, the sales of enterprise software heavily relied on the personal talents and charisma of salespeople. The relationship between the sales representative and the customer often determined product sales, regardless of the quality of the product itself.
Today, while relationship marketing still holds importance (perhaps more than it should), the internet has revolutionized the way products are selected and evaluated. Software vendors should fully leverage this new sales tool.
In fact, if product managers effectively address the ten points mentioned above, I am confident they will receive customer recognition and appreciation. This will position them far ahead of their competitors.