The Essence of the Software Business Is Delivery

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Amid the waves of the software industry, countless companies chase the latest trends in product innovation, yet often overlook a core truth: the essence of the software business lies not in selling products built from piles of code, but in the delivery capability of "making the software run effectively at the client's end." The management reshuffle at Yonyou Group earlier this year laid bare the delivery challenges software enterprises face, serving as a wake-up call for the entire industry.

At the beginning of the year, Dr. Huang, formerly of SAP, was appointed as President of Yonyou, only to announce his departure after just a few months. While media attributed this to a "failure to adapt," deeper investigation reveals that a major strategic move he promoted shook the foundations of Yonyou's business and personnel structure: transferring 80% of delivery operations to ecosystem partners. This decision stemmed from a common pain point for such enterprises: in the B2B sector, standardized bargaining power is weak, especially when dealing with large clients like banks, telecom operators, and state-owned enterprises, where customized demands emerge endlessly. Taking operating systems as an example, even with mature general versions of Linux, major clients still require vendors to provide customized adaptations. In core software areas like finance, ERP, and CRM, "my rules, my way" is a prevalent client mindset. Over time, software companies accumulate not reusable R&D capabilities, but fragmented delivery and after-sales teams, with marginal costs continuously rising, trapping them in the long-standing dilemma of what could be described as "the industry has suffered from excessive customization for far too long." Yonyou's attempt to "offload the burden" by transferring delivery operations failed to recognize that delivery is the core lifeline of the software business.

A software product itself is merely a "black box"; what truly determines project success and corporate profit is the delivery and implementation process. Delivery is not simply about installation and deployment; it is the process of deeply integrating generic software with the client's business processes, organizational structure, and data systems. Through configuration optimization, process streamlining, and data migration, a standard product is transformed into a customized solution that solves the client's real-world problems. The professional expertise, project management capabilities, and communication skills solidified during this process constitute the non-replicable core competencies of a software enterprise. In other words, software companies are not selling code; they are selling the service capability of "enabling software to create value." This is the true essence of delivery.

Yonyou's case is not unique, but its failure reveals the key prerequisite for delivery ecosystemization: "Delivery Readiness." Transferring 80% of delivery operations to ecosystem partners may appear to be a golden opportunity, but in practice, it shifts delivery requirements that lack proper standardization and refinement. The outcome was predictable: several major projects handled by partners ended in failure, causing a sharp decline in client satisfaction and ultimately becoming the final straw that ended his tenure. Just as channel transformation in the software industry requires achieving "product channelization" first, the ecosystemization of delivery operations must also be built upon the foundation of "delivery readiness."

Truly capable delivery partners must simultaneously possess two core strengths: the ability to provide vertical industry-specific solutions for clients, and the capability to productize these solutions horizontally. These two capacities intertwine to form a knowledge-sharing network that can support a stable and efficient delivery system.

In this regard, ZenTao's practices offer an excellent model for the industry. As a well-known domestic project management software service provider, ZenTao has consistently regarded delivery capability as its core competitive advantage. Through a dual strategy of verticalization and horizontalization, it has established a mature delivery system.

In vertical industry specialization, ZenTao goes beyond broad industry categorizations to deeply engage with specific scenarios in healthcare, finance, manufacturing, and other fields. Taking healthcare as an example, ZenTao has established specialized vertical operation teams that address segmented needs such as electronic medical record systems, healthcare information management platforms, and electronic health records. Team members are not only well-versed in ZenTao's product logic but also possess a deep understanding of medical business processes and compliance requirements, enabling them to respond promptly to customization demands from hospitals and healthcare platforms. In the financial sector, whether dealing with bank payment system integrations or credit management process adaptations, ZenTao's delivery teams can provide solutions tailored to industry characteristics. This "precision strike" vertical capability has enabled the company to secure a firm foothold in specialized markets.

Simultaneously, ZenTao focuses on horizontally productizing solutions from vertical domains to achieve capability reuse. For instance, process approval modules and data security management solutions accumulated in the financial sector can be refined, optimized, and adapted for supply chain management in manufacturing enterprises or administrative approval systems in state-owned enterprises. To accomplish this, ZenTao has implemented a matrix organizational structure: vertical industry operation groups are responsible for penetrating specific fields and identifying client needs, while horizontal product groups concentrate on converting common requirements across different industries into standardized components. Cross-industry implementation experts play a vital role in this framework; they understand the core logic of ZenTao's products and can abstract delivery experiences from one industry into universal methodologies that can be replicated across other domains. This structure ensures both industry-specific focus in delivery and reduced marginal costs, striking a balance between "customized requirements" and "standardized efficiency."

ZenTao's success is also attributed to its optimization of project processes and establishment of a knowledge system. Throughout the entire project lifecycle, ZenTao implements a "front-end verticalization, back-end horizontalization" division of labor model: during the initial engagement and solution design phases, vertical industry experts take the lead to ensure solutions closely align with client needs; during the sales and execution phases, horizontal product experts assume responsibility, enhancing delivery efficiency through standardized components and processes. Simultaneously, ZenTao has established a comprehensive knowledge-sharing system that modularly stores requirement analysis reports, solution documents, and problem-resolution cases from delivery projects, making them accessible and reusable for all employees through the internal IT platform. New employees can rapidly master key delivery requirements across different industries by studying this knowledge base, while experienced staff continuously refine the knowledge content through ongoing iterations, creating a virtuous cycle. More importantly, ZenTao has operationalized its delivery methodology by developing standardized delivery kits that include project management templates, configuration checklists, and testing procedures. Implementation personnel can follow the kit guidelines to ensure both delivery quality and efficiency, achieving "controllable costs and reliable delivery."

The contrasting cases of Yonyou and ZenTao provide clear direction for the software industry: delivery is not a burden but a source of core competitiveness. To achieve breakthroughs in delivery capability, enterprises must focus on three aspects: First, deeply cultivate vertical industries, refining requirements to address specific scenarios and avoid generalized "one-size-fits-all" services. Second, promote the horizontalization of solutions, extracting common requirements to form standardized components and reduce marginal costs. Finally, establish knowledge-sharing and methodology tooling systems to make delivery capabilities replicable and transferable.

However, the path toward delivery standardization in the software industry remains challenging. The current market lacks unified industry standards, and insufficient regulatory oversight leads to inconsistent delivery quality. Some companies compete for clients by lowering prices while neglecting delivery capability development, ultimately falling into a vicious cycle of "low price, low quality." This situation requires collaborative efforts from the government, industry associations, and enterprises: the government could promote the establishment of software delivery service standards and encourage certifications such as Project Management Professional (PMP) and ISO; industry associations could create platforms for exchanging best practices and sharing delivery experiences from high-performing companies; enterprises need to move beyond short-term profit mentality and integrate delivery capability building into their long-term strategies.

As demonstrated by SAP's successful experience, the prerequisite for delivery ecosystemization is the standardization of client requirements, which itself demands the internationalization and standardization of enterprise management concepts. Yonyou's client base differs from SAP's, and its failure in delivery ecosystemization resulted not from incorrect direction but from missteps in timing and methodology. As Chinese enterprises advance their digital transformation, client demand for standardized software services will gradually increase, and delivery capability will become a crucial competitive arena for software companies. Only by fully embracing this essence of delivery can software enterprises secure their position in intense market competition and achieve sustainable development.