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Our Customers stopped spending


When the share market goes down 5% in the morning, and then goes back up 5% in the afternoon – what does that mean? Firstly it means high blood pressure for all those needing to draw on their 401K anytime soon!

What it means for the world of software is that companies stop spending. Customers cancel consulting engagements, buying decisions are put on indefinite hold and work becomes significantly more difficult to find. All ‘nice to have’ projects stop. I was reading recently an interview with the CIO of Qantas, David Hall, who was discussing hte impact of the GFC and ongoing uncertainty : “Our main effort would be around simplification and automation of the business. Historically large enterprises have big, complex legacy systems. We’re spending probably the lowest we’ve spent in a long time in Qantas. Yet we’ve got projects happening in all parts of our business to transform, (improve) speed, efficiency, greater customer analytics, and improving the customer experience has been very critical to us.”

So if the largest of business is spending less than ever then let me guess this is exactly the same with mid market business. If the largest companies are focused on simplification and automation – then let me guess this is the biggest challenge for mid market companies. At no point does David suggest they have stopped spending, but he is being much more careful about the projects he spends his money on. He is very careful to ensure that what he spends money on will not have large ongoing maintenance costs.

So as software providers to the mid market – our job is pretty simple. Deliver high quality software and services, that automate and simplify business process while reducing ongoing cost of ownership. This means that there are no longer any free rides and cushy consulting jobs. There is no place for burying a consultant on a fixed assets project for 6 months – those project do not exist in more. Mid Market customers want you to get in, make things better and get out, leaving then with autonomy and reduced costs.

So is squeezing everyone into cloud computing the answer? I believe yes and no. When a business says keep it simple they mean that – but do not mean make me the same as every other company. Software must support the companies unique business model. It is a companies uniqueness that makes them profitable. Many of today’s cloud apps are very simplistic and do not go any where near providing the breadth of functionality required in the mid market. The cloud pricing model is very attractive and the simplicity of the software reduces implementation costs – which also fits inside tight budgets.

The wonder of CRM and GP is the flexibility. It fits different businesses and can be configured, constructed, squeezed, customised, added to etc until it gives a perfect fit. This is what companies need. Can this be delivered in the cloud? Yes – it has to be and it will be. Is it delivered in the cloud right now – I do not think so and certainly not in regards to ERP – and it is going to take time. GP is working hard on the web client and we are hearing very positive noises from inside Fargo as to their success.

In the mean time – do not dream of asking your clients to spend money on ‘silly’ projects. Only offer them project that have a clear ROI, and clear improvements for their business. Software resellers need to get clever and clearly demonstrate how their solutions will make or save money for the mid market. No customer will integrate their CRM or Salesforce.com with GP because it seems like the thing to do. They will do it because you show how it makes their business more efficient and they can do more with less.

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