What Brands Need to Know About Buying Enterprise Software

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By: Bill Hanifin, CLMP™ |

Posted on December 27, 2019

What brands need to know before buying enterprise software

Is the current model for enterprise software providers about to shift dramatically? The Head of Global eCommerce at Steve Madden thinks it might happen. During a presentation at D2C 2019, Jeff Silverman, President, Global eCommerce, recounted a story inspired by listening to a recent vendor pitch.

The salesperson from the enterprise software provider was describing the path for Steve Madden to follow to get their platform into use. The deal structure included familiar components: a 6-figure up front implementation fee and a project plan of 6-9 months to make the technology ready for use. As soon as user acceptance testing was completed, a pilot would begin.

Upon completion of a successful pilot period, Steve Madden would be on the hook for monthly service fees that packaged software license fees, maintenance fees, upgrades, and a package of support services. There would be a multi-year agreement in place, with heavy cancellation fees if Steve Madden wanted to end the agreement before its contractual term.

The Steve Madden executive shared that five years ago, he would have considered this approach not only standard fare, but pretty much the only item to select from on his menu of options. Today, as he told the story, he viewed the model as outdated and not especially competitive.

There’s a technology transformation underway

The new technology model is built around a shift in perspective. The shift is that the provider puts the success of the customer at the center of the agreement and is confident it can deliver valuable services to retain that customer’s business over the long term. Providers can light up technology platforms much more quickly and will less and less depend on a contract to protect customer tenure. Instead, they bet the veracity of their product and the quality of their service will get the job done.

There is a wave of technology providers who set expectations for quicker start-up times, lower up-front fees and a “cancel anytime” policy.  Loren Padelford, General Manager, Shopify Plus, reinforced the need for this new approach from technology providers saying, “Enterprise software is a fabricated reality” and reminding all who listened that “1,000 humans and 2 years of a massive onsite team aren’t required for anything”. In other words, the age of true cloud-based software as a service has arrived.

This new age of software support is timely as mid-tier brands in retail and financial services are clamoring for platforms that embody the capabilities of sophisticated "enterprise-level" software. While they need these capabilities to compete with their most virile competitors, budgets are not unlimited, and mid-tier retailers/businesses find it challenging to get what they need packaged in acceptable economics. 

Customization, data handling, and quality partnerships are front and center

We wanted to understand the mind of Chief Technology Officers who are at the forefront of delivering these new models and turned to Kevin Sagon, CTO, Augeo FI, for insights. Augeo FI provides customer engagement and loyalty solutions for over 1,200 financial institutions in the United States and has been at the forefront of transforming software implementation practices.

Kevin echoed the challenge we described in the Steve Madden story: how to provide platforms and processes that can scale both vertically and horizontally from a client and cost perspective, while balancing cost-efficient customization options and delivering enough power to differentiate to its clients. He shared the higher points of a vision that unlocked access to hundreds of potential clients through a forward-looking integration of its software at a handful of key network points in the payment processing network. This creates an implementation scenario that allows for as much or as little customization as clients need while enabling programs to come to market quickly.

Kevin said that some of the magic that enables the company’s approach to implementation has to do with data acquisition citing, “The Augeo FI team has developed the tools and processes to efficiently understand, scrub, and map hundreds of different data formats for both real time and batch loyalty data acquisition. This helps us guide clients in the navigation of their data needs in a fraction of the time a typical data exchange takes to establish. This is particularly helpful when combining and correlating data sets from multiple sources to supply a unique and comprehensive view for both our clients and our client's customers.”

and of course, competitive pricing

About adapting to newer pricing models, Kevin shared that Augeo FI employs a mutual success model that allows programs to grow over time at a competitive price point. He said, “We are intentional to extend an economy of scale to our clients, giving them access to the tools and processes typically reserved for only the largest players in the market at a competitive price.”

On sparking innovation, Kevin believes that seeking out quality partnerships is a key to ongoing success saying, “We constantly strive to integrate partner offerings that bring depth and relevance to the products offered by our clients and source best-in-breed offerings from the market to our clients. All of this must be done with an economy of scale that keeps pricing competitive and offerings relevant and leading edge.”

Kevin Sagon is a new breed of CTO, part of a tribe that understands that having the most extensive feature and function list may not always be enough. Creating a delivery and support model that puts the client (i.e. your brand) at the center of attention, and aligning resources to deliver quickly and flexibly are equally weighted keys to success.

This is refreshing news to every brand on a search for technology to bring its marketing strategies to life.