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MARKET ADVISORY / 19 SEPTEMBER 2002
 
Busting the Box vs. Thinking Outside It:
An Economic Wake-Up Call

By STEVE WEISSMAN

Am I the only one who feels the economy is getting to be like the weather? Everybody talks about it, but nobody does anything about it! (Mark Twain)

We can all agree that the present and protracted economic uncertainty is leading customers to be ever more cautious in their IT spending. But it’s not enough to continue to bemoan the situation: you need to actually do something about it or risk alienating your customers, partners, employees and stakeholders.

A year and a half ago we urged our readers and clients as a first step to intensify their concentration on customer service. Early this year, we began writing of the wisdom of expanding one’s horizons by pursuing partnerships and M&A opportunities. Today, we add to the mix our recommendation for even more drastic action: not merely thinking outside the box, but busting the box altogether by thinking creatively about customers’ problems and innovating new ways to solve them.

“Doing More with Less”
Yes, Virginia, there is a need for organizations to do more with less … or at the very least, to do the same with the same! Most of the users we talk to report that permission to spend on new technology is hard to come by. Instead, their attention is being given to maximizing the value of the systems they already have, and the performance of the workers using those systems. That’s especially true of the internal application development workers who are being handed more and more responsibility for your customers’ business processes. Here are a few pieces of evidence from several different directions to support this point.

  • Oracle’s financial report for the quarter ended August 31 says that new software license sales were down 23% from the same period the year before. However, software license update revenues were up 9% over the same timeframe. This clearly indicates that while new customers are becoming increasingly hard to find, existing customers are looking to get more from the software they already own.
  • BusinessWeek over the past several months has reported on federal statistics that consistently indicate worker productivity is strong and rising. While the thinking is that this strength has helped to keep serious economic problems at bay, it paradoxically also may be delaying a significant move toward recovery by mitigating the need for new hires, spending for additional capital equipment, etc. Either way, greater productivity is what results from successfully doing more with less.
  • Open Text this month acquired messaging/collaboration infrastructure provider Centrinity to bolster its ability to help its customers work better together. This transaction suggests Open Text sees the same growing demand for communications and collaboration that we do (‘communications’ being one of the three elements of our MaxTVSM model for Maximizing Total Value), and it refreshing to see the company take such definitive action to meet it.
“How Do I … ?”
If we presume the economy continues on its present flattish course – and there’s no reason to assume it won’t – then the next step along the road has to be to move beyond merely improving the ability to serve customers with better-faster-cheaper offerings. Instead, a conceptual step backwards must be taken so you can adopt a broader view of the role you play and the need you fill. This means not only identifying new opportunities in terms of your current capabilities and how they may be leveraged – which is how “thinking outside the box” has come to be practiced – but actually redefining yourself in terms of how customers use your stuff and developing strategies from there. We call this “busting the box altogether,” and we see it as fundamental for any company that wants to do something about the economic weather.

Here are but a few companies that are busy busting boxes even as we speak: 

  • Cerylion has hit upon a technology architecture that facilitates “context management” in the way we first postulated it way back in 1997. At the highest level, it offers a creative way to orchestrate an infrastructure so users can develop and maintain a personalized interaction with intranets, extranets, and everything in between.
  • ScanSoft has moved beyond its historical roots as a “scanning company” and now is treating text, image, and voice communications as mere variations on the content theme. Its gig today simply is “input,” and it has products that can capture information in any of those data types.
  • Starfish is making wireless computing practical for enterprise computing use by concentrating on the way people access and use information, and fielding products that allow this to happen on mobile and wireless devices.
The common thread here is that all three companies know that their customers’ bottom-line issues have to do with process, not technology, and they’re all working to redefine themselves accordingly. And as they do, they are smashing the boxes they’ve traditionally operated in because they’re committed to viewing the market through their customers’ eyes – and that’s precisely how you make sales in an economic climate that is distinctly not conducive to buying.

Your Assignment (Should You Choose to Accept)
Embarking down this road is really quite simple, as you need only start with the same question your customers do: “How do I … ” quickly find the relevant information I need, even when that need changes constantly (Cerylion)? Digitize information coming to me in a form, typed on a piece of paper, over the telephone (Scansoft)? Use my PDA to access and work with up-to-date information stored back in my office (Starfish)?

What’s hard is following through with what may appear to be radical departures from your usual approaches to product development, sales, and marketing. Though your customers will love it as soon as they see it, busting the box usually means redirecting your salespeople, reeducating the market, and reassuring your stakeholders, all of whom will take time to come on board.

Kinetic Information spends a lot of its time helping clients make this very transition, and it’s clear to us that one of the most important ways to do this is to find ways of “eating your own cooking” – using on your own processes the very technology you wish to sell other companies. By so doing, you’ll quickly discover what’s missing, what works, and what the market most needs to hear, and thereby be in the best position possible to weather the economic squall. Contact Us for More


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