Here is re-post from FastForward as I wanted to see if I could stir up some more conversation on the topic. An interesting question was raised in the post, Should Software Vendors Also Sell Professional Services?, by Stewart Mader. He quotes Oliver Marks, "The reality for all "social community" roll outs is that the software is a relatively minor component compared to the change management required to drive uptake and usage and to weave the software into the business fabric of day to day use." I certainly agree here and was even part of a panel at Enterprise 2.0 Conference in 2007 titled: 90% people, 10% technology.
Stewart goes on to quote Jive's Gia Lyons, "Most of what we do could be done with almost any other social software tool, but naturally, we only make ourselves available to Jive customers." Stewart then writes in reaction, "If most of what they do could be done with other software, then why only make themselves available to Jive customers? After all, isn't professional services an even larger source of revenue than the software? That's how SharePoint works. Microsoft sells a basic infrastructure on which lots of 3rd party consultants build and customize tools that meet each companyâ•'s needs."
I would certainly agree with the last statement about revenue sources. When I was part of a large consulting firm we usually figured the system integration costs were about 3 to 5 times the software costs.
Stewart then implies that software vendors will not have the objectivity of third party implementers who can use a variety of tools. Having been on all sides of this equation, I think that this is a complex issue. I like Jon Mell's comment to the post, "I think itâ•'s slightly more subtle than vendors only trying to validate the sale. If a customer invests in Jive (or any other product) there is a mutual interest in making sure the solution works. If that also happens to validate the vendorâ•'s sale it doesnâ•'t automatically mean itâ•'s wrong and not in the customerâ•'s best interests."
I would add that just because the professional services firm is independent of the software vendors, there are many alliances that will provide motivation similar to an internal services provider. I was the alliance sponsor for three portal software firms while working for a large consulting firm. There were several tiers of alliances and many wide-ranging agreements and motivations. In the end you have to be able to trust your service provider, whether they are inside or outside the official software provider and trust that there is full disclosure
I have also seen situations where the software firm's internal people partner with a third party developer. This happen on a knowledge management project I led in the early 2000s. It worked well because the internal experts gave us their unique knowledge to help with the implementation and served as a connection to the software firm. The project was a success and promoted by both the very large software firm and the consulting firm, my employer.
In the 80s I was involved in another situation were it made sense to use the software firm's service providers. My employer was a firm that sold CBT software. This firm originally thought that over half their income would come from selling software. I was the head of customer development and we only used our tools. What actually happen was that selling software accounted for only about 10% of our revenue. The rest came from custom development, as our clients would rather pay us to use our tools than purchase the tool themselves. Now software for learning development is a bit of a specialized case, as you need expertise in creating good learning materials as well as using the software.
In the end the answer to the question is not yes or no but the old "it depends." There are many issues to making enterprise 2.0 work (see McKinsey on Making Enterprise 2.0 Work is Reminder of Process Centric KM in Early 90s) and I think there is a role for software firms to engage in this implementation for everyoneâ•'s success.
What has been your experience on this issue?
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