Creating Value Through Alliances

Many emerging company’s products do not bridge from the old way of doing things to the new. The customer may be forced to use the Web and frustrated beyond belief because no human being is available. Or they are sent e-mail with a document link but cut off unexpectedly from paper. We can learn from tollbooths. They use wireless technology to move cars to “fast lanes” that do not require humans to collect the tolls. But wisely, they have not cut over to fast lanes all at once. They know only a few drivers would be ready with the rest bewildered and angry.

Product Development Background

This chapter addresses issues in systems development and design of software products. The goal is to describe three problems in the industry. First, is the inability of current methodologies and practice to factor in human and organizational issues. Second, is the high number of “one off” or custom solutions that we see in practice. And third is the inflexibility of current systems development methodologies. Chapter Nine will introduce a method that addresses these observed industry issues.

Assimilation

As discussed in Chapter I, successful enterprise software will assimilate rather than disrupt in their market niches. Assimilation is gradual change to something different. The noun “assimilate” means conversion, reduction, transmutation, evolution, sea change, transit, transition; transmigration, and shifting. As a verb it means to be converted into, evolve into, slide into, glide into, ripen into, merge into, emerge as, assume the shape of, begin a new phase, assume a new phase, and undergo a change.

Organizational Issues of Emerging Companies

Your business is based on great ideas. You and a very talented team of engineers and business people are trying to figure out how to translate these ideas into products and a business. You know there’s a definite market for your product because you have already sold it. You’re starting to get some free press and more interest than you know what to do with. Now your company is on the brink of making the turn from emerging to mature.

A Customer-Focused Value Discovery Process

This chapter addresses the inability of current methods to factor in human and organizational issues, the high number of “one-off” solutions produced in the industry, and the inflexibility of current systems development methods. Several case studies are included that point to the value of using prototypes and having rapid customer feedback.

Customer Core Competency

Corporations that need technology must make a decision. They can solve the problem themselves or purchase an outside product or service. Their core capabilities influence this decision and affect the value of the supplier’s product. It is probably difficult to sell ice to Eskimos. It is always hard to sell anything to someone who already has what you have, or can make it inexpensively. Despite this, many enterprise software companies depend on being successful in this manner.

Strategic Assessment

Having a strategy and sticking to it is difficult for enterprise software companies. They can apply their skills and technology to many business problems and they are hunting in growing markets. Almost any pursuit can be declared “strategic” since it could lead to something big.

Assessing Your Effect on the Customer

Renes Descartes (1596-1650) was a man of many talents. He was a mathematician, scholar, traveler, physicist, philosopher and thinker. In his spare time he was a primary contributor to modern philosophy as well as analytic geometry. According to Descartes, the guide to truth is to doubt everything systematically until you arrive at a clear idea that is beyond all doubt (Flexner, 1995). This is sound advise for any enterprise software product. Every day believers surround us. We are passionate about our product and company and we can all benefit from taking a step back and forcing a harder look. Using Descartes philosophy, the preceding five chapters are brought together to form a systematic method to challenge a company’s product from the customer’s viewpoint.

The Customer-Focused Business Care

This chapter first describes challenges that software companies face in making a strong business case to prospective customers. These include a history of solutions falling short of projected business case expectations, the customer’s unique perspective of costs and the difficult issue of technology adoption. Secondly, a process for building the software company’s business case in the new era is discussed. The process uses strategic frameworks to estimate and validate strategic objectives. Lastly, we look at a case study of e-docs that developed a unique way to manage unpredictable technology adoption.

Company Valuation and Financing

There is been much written on the period between Netscape going public on August 9, 1995, and NASDAQ peaking at 5,048.62 on February 29, 2000. March 10 of that year, by the way, was the worst day to buy stocks in 70 years (Berenson, 2004). This was not a normal period and this chapter will not attempt to explain it.