Consumerization of the Enterprise – Phase 2

Consumer VCs like to make light of the Founders Fund mantra ‘We wanted flying cars, instead we got 140 characters.’ For those of us working in the enterprise, it’s actually the reverse, “They promised us 140 characters, instead we got Workday.”

Since 2010, SaaS applications were supposed to “consumerize”, but as anyone who has used the majority of SaaS applications released prior to 2014 knows, they are still clunky, punishing interfaces that happen to be hosted in someone else’s datacenter. 2014 is proving to be the year where this changes, with a large wave of new-generation SaaS apps that really deliver on a delightful user experience. Employees and managers are taking notice of these new user-friendly tools, causing adoption to explode from the bottoms up.

Consumerization of IT – the second wave

Up until about 10 years ago, large enterprises were the primary consumers of technology, and they drove the agenda for where dollars were invested and innovation happened. But between 2000 and 2008, consumers overtook enterprises and became the largest buyers of technology. Ever since then, consumers have driven the most important innovations. And enterprise technology has struggled to keep up, in what is known as the consumerization of IT.

In the first wave of consumerization, employees brought their smartphones and tablets to work, and expected their IT groups to support these to access corporate systems. But ever since apps like Uber became ubiquitous, a second wave of consumerization has started to happen: Consumers now expect an Uber-like experience in their work lives. And yesterday’s enterprise systems fall woefully short of that bar.

Consumers used to say “I’ll deal with whatever system you give me,” then they said, “I’ll bring a better system, just support it,” now they’re saying “I expect a system that enables a better way of working, deliver it”. The baseline expectation has shifted, and this has been led by an increasing number of experiences in their personal lives becoming easier and better. Using Uber and Lyft as an example, it’s less about the gorgeous UI/UX of the apps, but more about how they rewrote the unpleasant experience of hailing and riding in a cab, making the consumer feel like a VIP in the process.

Customer-facing Systems – the first challenge

This problem is most acute when it comes to the interface between a business and its customers. In the past, most business used people as the primary interface to their customers. But consumers and corporate buyers hate the inconvenience of restricted business hours, long wait times, complex IVR menus, and staff that are often less than knowledgeable. They prefer self-service. And now they expect that self-service to be easily accessible on their smartphone, with the same kind of beautifully-thought-out user experience that they have seen is possible with leading consumer apps. If they don’t find the kind of digital experience that they are looking for, they will often look for a competitor that can offer it to them. And finding a competitor usually requires just a few clicks.

Digital Experience defines your brand

To summarize,  Digital Experience is now defining the brand of more and more companies. Customers expect to place orders, check status, get notifications of changes and updates, etc. via simple and elegant mobile apps. The quality of the experience in using a company’s mobile app now frequently defines how the buyer thinks about that company. This has become so important that Forrester Research went so far as to say that “In the 21st century, successful brands will rise and fall based on software.”

Not just Customers, but Employees too

But it doesn’t just stop there. Although customers are the most important priority, right behind them come a company’s employees. Increasingly tech-savvy employees are experiencing how mundane tasks can be re-written by apps like Uber and Shypp, and are looking to redefine the painful tasks in their work lives. Sadly most current IT systems are a far cry from this. Even the first generation of SaaS solutions are being viewed as legacy and unsatisfactory. Just ask sales people what they think of Salesforce.com. Most will tell you that they hate it, as it makes them do more work. This is because CRM was designed for the sales manager and not the sales person.

Surprisingly, even Workday is viewed as a legacy system in SaaS clothing. Users of Workday in our portfolio companies consistently tell us how much they hate the user experience. (One individual showed me the eight page word document that their HR department had to put together to guide them through the many complex steps of a performance review.) Workday was designed for the HR professional who was OK going through a long training and setup period, and not for the employee and manager who are looking for simple and convenient ways to get their job done.

What we notice with SaaS apps like Salesforce and Workday is a focus on being system of record that solves a particular business problem. Employees are often slaves to the system, doing tedious data entry. What’s missing is a focus on rewriting the way that work gets done. And the quality of the user experience in using the app. New SaaS companies are emerging to address this gap.

To get around the inefficiencies at work, employees and managers are purchasing next generation, consumer-grade, SaaS applications using just a credit card, without waiting for IT approval. Savvy SaaS vendors take advantage of this with either Freemium offerings, or low priced offerings that enter via an individual or small department. Then, once they have proven the success of the system, they call higher in the organization to expand the usage of the application, touting the success of the current users as proof of the effectiveness of their software.

For this strategy to work, the developers of this next generation of SaaS apps know that they have to immediately delight the user, and keep them engaged over time. There is a huge focus on the user experience. And careful steps are taken to measure and optimize user engagement. These apps are no longer the old style of thin client web application where the page is rendered on the server, and has to be reloaded with every change in the app. Instead the application development paradigm has changed, and developers now use frameworks like Meteor to build “thick client” apps written in Javascript to enable the kind of instant refresh that consumers have gotten used to in Facebook, Google Maps, etc. Part of the magic of Uber is that you see your car moving on the map, without having to constantly hit the refresh button.

Frequently, mobile apps are becoming the most important client, as users look for the convenience of any time, any place, access, and apps take advantage of the many converged features on a smartphone (geo-location, multi-modal communications, camera, address book, calendar, etc.)

Companies like Zendesk have led the way by re-writing how businesses interact with their customers. And the experience of using the app is a pleasure due to “beautifully simple” design. Their application is easy to set up, simple and intuitive, yet full of powerful functionality. By dropping a couple of lines of JavaScript onto your web site you enable an entire customer self-service help desk. That help desk enables a new and easier way for customers to interact with your business and get resolution to their problems.

Changing the way that work gets done

Looking below the surface of the design of the UI, we see a renewed focus on how work gets done. Much like Uber, SaaS application designers are going beyond skin deep UI changes, and focusing on rewriting mundane, inefficient, time-wasting tasks, and poor communications between different parties that need to work together. We’re seeing slick new applications like HubSpot’s Sidekick that do most of the research for a sales rep before they make a call, and then do all the data entry into the CRM system for the rep. Sidekick also checks to see if anyone else in the company is talking to that customer. Unlike CRM, this kind of tool is aimed directly at helping the sales person do their job better.

Sidekick Email Profiles

HubSpot’s Sidekick browser panel that pops out as an overlay when viewing contact information in another application

In the HR space, we are seeing apps like Namely that provide human capital management that is employee and manager-focused. Namely drives employee engagement and adoption through mobile self-service tools that make employee and manager’s lives far simpler. This has the interesting side effect of reducing work for the HR staff, as they no longer have to enter the data. The result of intense employee engagement is that Namely is able to help create the culture that attracts the best talent. And once they have joined, Namely helps drive alignment around corporate goals, and reinforces the cultural behavior that the CEO believes in.

image

Namely’s Company Feed (similar to Facebook)

Apps like Slack are improving team communications, making it easy for employees to stay informed on topics that they care about. Lever, recognizing the severe talent war that exists in the tech world, provides a hiring platform  so elegant and powerful that hiring managers, employees and candidates love to use it, and collaborate tightly on identifying, qualifying and selling the best candidates. Soapbox replaces the employee suggestion box, and uses employee up-voting to identify the most popular suggestions. 15Five replaces erratic communications between employees and managers with a simple weekly report that catches issues before they become major problems.

image

15Five’s weekly questionnaire

Summary – Consumerization of the Enterprise, Phase 2

Several people have suggested to me that we have reached the end of the era of big new SaaS applications. They see the main categories that they were used to in the past like Accounting, CRM, HR as being taken already by large public companies. They are often surprised by my answer: No, we’re at the beginning of a new era. The new era is about mobile and SaaS apps that rewrite the way that work gets done. And while they are at it, the user is delighted with consumer-grade, “beautifully simple” UI.

Strap-in and get ready for a fun ride. We’re finally in the fun phase of the “Consumerization of the Enterprise” revolution.

If you are developing an app that that rewrites how work gets done, my readers and I would love to hear more about it. Please tell us about your app, in one paragraph, in the comments section below.

(Disclosure: Zendesk, HubSpot, Namely, Lever and 15Five are Matrix investments.)

About the Author

David Skok

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  • We are looking at the paradigm shift in the eSourcing sector. Our aim is to bring truly usable, on demand tools to procurement professionals and assist is the centralisation of information, obtaining pricing and negotiation.

    We have found that we are still very much ahead of the curve. Many SaaS applications in the market tend to be the larger players with new SaaS offerings but are not truly multi tenanted applications and have certainly not embraced ‘consumerization’. In the past we have called the ‘consumerization’ of software products ‘Gamification’ and for us this is really related to the adoption procurement tools from a buyer and supplier side.

  • Well written David! Couldn’t agree more. Having previously developed and commercialised a SaaS application within Project Management, your description of the transformation of the SaaS industry feels strikingly familiar and to-the-point. While the PM app we developed is now likely to be perceived as legacy, the new venture I’m involved with is not.

    With Mobilimeet (www.mobilimeet.com) we are aiming to rewrite the way everyday business meetings are prepared, executed and followed up – with a mobile first approach. Mobilimeet changes the way you handle your meetings and allows for both organizers and participants to work more efficiently. We recently released for IOS and iPhone: http://bit.ly/1tCWGJN (with more platforms to come).

  • Eero Raun

    At Zoined, we want to get retail analytics tools in the hands of the store managers and purchasing managers, so that the analytics departments would not be the only gatekeepers to valuable metrics and KPIs, at http://zoined.com

  • Great article, as usual, though I think the high expectations come more from the rise in competition than from consumer expectations. At the end of the day, if someone wants to buy HR software, they’re not going to demand a better UI, but they’ll certainly choose a vendor that has it. Companies are starting to realize that forcing their employees use bad software has a cost, so great user experience and ease-of-use are now valuable features.

    At Appcues (http://appcues.com), we’re helping SaaS companies grow their business through more effective user onboarding. Instead of spending 6 weeks with a team of developers, a product marketer can create and publish beautiful, personalized onboarding experiences within minutes, all without touching a line of code.

  • David, you asked to hear about applications that are rewriting how work gets done. At iLiv (iLiv.com) our SaaS product All-In certainly qualifies.

    All-In represents a deep re-think of how people work together to get the right things done on time. It hybridizes project management, project collaboration, and communication into a one-page synthesized view of everything each individual has to do on all their projects. In All-In, the organizing principle is the passage of time, expressed though the metaphor of orchestral music composition and performance. The software functions as both the notation system (where the processes are defined and distributed) and the metronome (whereby the processes’ tasks get done in sequence and on time). Composers (PMs, project leads, domain experts) discover, define, and refine collective work processes. Performers (everyone else) get notified about the what, why, how and when of their tasks — then do the work and mark it done. Everything is tracked and reportable. The value proposition for every user is productivity; for managers, it’s transparency, continuous improvement, and all that measurable productivity going straight to the bottom line. The business model supports both internal and cross-enterprise collaboration equally well (because interacting with people outside the enterprise is where the money is made).

    With respect to the topic this blog post, the UI is unique, innovative, and elegant. While the app is deep, it looks and feels “consumer simple”.

    Andrew Culver

  • Gregory B

    Completely aligned with what you wrote David. We keep telling companies they should stop punishing their employees by forcing them to use “ugly” interfaces.

    We picked one simple process: Visitor Management, we are transforming it into a cool experience for visitors, staff and front-desk. We think it is time to get rid of the old log book at reception desk! http://www.proxyclick.com

  • Spot on article David!

    At Pie – http://www.pie.co – we’re building chat for work. Pie is the fastest, easiest, and most fun chat app you’ll ever use for work. With our extreme consumer-like design & polish we push the boundaries of the consumerization of the enterprise.

  • Great article! From my perspective, one of the biggest benefits to the consumerization of the enterprise is that it increases the market size of people you can sell to.

    Instead of focusing on selling a single person (the decision-maker) the power of is that you can cast a wide net, get employee usage, and then work up the food chain.

    It seems like the most successful companies go from one user to many users very quickly (i.e. – Slack, Yammer, etc). A great user experience pours gas on this fire.

  • Preaching to the choir David. I spent the 90’s managing an ERP/CRM practice at Deloitte. The end-user was and continues to be an afterthought in employee facing application design. Thanks to consumerization and the migration of LOB API’s to the cloud, the enterprise is poised for user-led productivity gains that are unprecedented. it is a great time to be in enterprise software!

    We started Nuiku (http://nuiku.com) 2 years ago to build a smart intelligent assistant that uses natural language processing and artificial intelligence to simplify work. Imagine speaking to an assistant that understands your role, is connected to the systems-of-record that matter to you, and learns. We like to call it the Natural User Interface (NUI) wave of the future where the world of work is simplified and the end-user is the hero.

  • Jeff Pollock

    Thanks for your post and this forum, David. Very helpful.

    Our company provides a solution that rewrites how work gets
    done throughout the entire value chain of infrastructure construction and asset
    management. We offer a SaaS solution called Idencia that serializes infrastructure
    products and creates a timeline of the product’s history that can be used from
    birth through end of life by the manufacturer, construction contractor and
    infrastructure asset manager. This eliminates quality control paperwork
    required of line workers in the manufacturing process; enables real-time access
    to product-specific information for the construction contractor; and, with the
    business intelligence packaged in the system, automates maintenance scheduling
    and record-keeping for the asset manager. This platform will include sensor feedback in a future generation to further automate the work of the asset managers in the inspection process.

  • Great one David!

    We are right with you. Voxa is creating a Messaging Intelligence Platform that helps business users get visibility and control over their email. Email isn’t going anywhere in the enterprise. The necessary ingredient is not a replacement to email, but an intelligence layer that helps users prioritize, filter, and manage it.

    Voxa standardizes email workflow across organizations through Salesforce.com connector and smart synchronization of team contacts and conversations with objects in the CRM. We are all about smarter email for business.

    Voxa Alerts beta invites are available for FREE at http://alerts.voxa.com.
    Keep up the good work!

  • David, I enjoyed the post! I agree we are in a new era and seeing a number of industries with SaaS applications that are rewriting how work gets done.

    At CloudNine (http://www.cloudninediscovery.com/) we are in the litigation discovery and document review space, which has traditionally been dominated by complex data processing and review software requiring extensive training to operate plus a significant investment in infrastructure to handle the large data sizes. To make matters worse, when a lawyer (typical user) requires data to be processed, the options have traditionally been to either call on a vendor or their IT department to get them to help. Both of which require a number of forms to be filled out and a couple dozen back or forth emails to get the project initiated, plus a kickoff call with the assigned project manager. Needless to say, both options
    are a BIG hassle, very time consuming and expensive, not to mention that it can
    take days for even a small amount of data to be processed and prepared for
    review.

    We believe there is a better way and have developed an easy-to-use eDiscovery software that is ‘100% automated’ that allows lawyers to get their data processed and ready for review in minutes, not days, without having to deal with a vendor or IT department, all for about half the cost.

  • Alison Shurell

    Enjoyed the article – thank you!

    You know how lawyers take too long to do things and cost too much? Well, we are addressing this issue in a way that benefits both the client and the attorney. Up until now, trademark attorneys and branding teams have had to wait up to a week to find out if names they are interested in trademarking are safe to pursue. Traditionally, significant manual human effort by attorneys and paralegals has been required to conduct a comprehensive trademark search. Trademark databases and the internet must be searched and language experts engaged to explore identical and similar marks, word meaning in multiple languages, and internet domains to determine if the name can be considered. This process may be repeated with over a hundred name ideas just for one naming project. What we’ve done at TrademarkNow (http://www.trademarknow.com), is replace this manual human involvement with unique artificial intelligence based on 12+ years of research in domain models of trademark law, linguistics and machine learning. We provide trademark teams with access to this via a simple, easy-to-use SaaS platform that presents results in a visually clean and prioritized manner. Now, enterprise trademark teams, outside counsel, and branding agencies can get a comprehensive trademark search report in about 15 seconds, instead of a week. This dramatically diminishes the time and money spent on naming projects and equips teams to make better, faster decisions.

  • Jeff Haller

    Spot on David (as usual)! At DataServ, we have taken the boring task of data entry for fundamental transactional tasks such as AP and AR and replaced it with automation of those repetitive low value tasks. This in turn allows company employees to focus on much more intelligent and rewarding tasks that add value to their business. Radically altering the way AP and AR people work is much more fun then just UI! the users are instrumental in buying our solutions.

  • Karen Adams

    Great article David. Thank you. We’re walking out this very transformation at The Prosperous Shop. We offer ‘big brand analytics for SME retailers’ ‘you’re very own Head Office in the cloud’.
    Open up your shop, open up our app, action the insights, enjoy the crazy ROI as your profits lift, shut up shop, go home, see the kids.

  • David,

    http://www.rivalry.com – Sales Coaching Platform rewrites how sales coaching occurs. Namely is one of our best customers!

    Also, I love the title of your blog. Great minds think alike! http://www.jonbirdsong.com/2014/03/13/consuming-the-enterprise/

    Best,
    Jon

  • Hi Jon – great post!! And a great place for Atlanta to become a leader. Glad to know that Namely are a customer.

  • Thanks for the shoutout David!

  • Great article, David!

    At DocSend (docsend.com) we’re providing actionable insights to salespeople and marketers about what happens to their documents after they send them to prospects. Through rich page-by-page analytics we empower people to know who to follow up with, when they should follow up, and what they should focus the conversation on. We see this as a long neglected final frontier of understanding customer touchpoints along the purchasing funnel, and we’re thrilled to shed light into this black hole. The customer has been at the center of the product development process from Day 0, and it’s enabled us to grow rapidly by getting new users onboarded and productive with little or no direct contact. Building an enterprising offering with a “consumer” orientation sets a high bar for product experience, but it can enable a much lower-cost sales model.

    Also very happy to count Namely as one of our dear users!

  • Good article. The key point in adoption of these apps is that customers and employees will make the choice for the enterprise. Traditional enterprise software (including Workday and the like) has failed to engage its users because it is chosen and designed by corporate IT and corporate leaders. Consumerisation is currently bypassing corporate structures and leaders need to be much more open minded and allow a more bottom up, organic approach. I have written a white paper on this subject at http://www.sunstonecommunication.com and will be looking to launch some more material in the New Year.

  • Exactly right Kenny. (I think the savvy CIO’s are embracing this change.)

  • Hi Dave, sounds like another great tool to help salespeople. Thanks for adding the description. This is likely to be interesting to other readers.

  • Fabrizio Miglior

    Inprivate.info is changing the way teams keep track of their projects. Mainly used by private equity, advisory and law firms, our Saas helps managing contacts and deals with an intuitive Ui and with accelerators, like sending updates by inbound mail. A performance appraisals tool is also included, where employees give their opinion to their colleagues by numerical ratings and textual comments generating the summary profiles for HR, with a social-network like user experience.

  • peterarmstrong

    Great article, David!

    At Dashcube (http://dashcube.com), we are based on the idea that planning and communicating should be unified, not integrated. The idea is that, while individual apps for planning and communicating might be simple in themselves, the act of integrating them with each other is inherently painful. To people familiar with the collaboration app space, perhaps the best way to describe Dashcube is that it’s “Slack plus Trello”, where tasks in a project are also robust communication channels. But we take unification to the next level, adding in-app, in-context one-click video chat and screen sharing. This means that you can click on a project or a task (or a person) and click an icon to launch a video call with everyone following the project or task. As a way of working, this is no small thing: it immediately establishes a context for the call, and makes talking with people wherever they are in the world, as easy as tapping them on the shoulder. There’s a lot more to Dashcube, including our project replays, which are like interactive game film for project teams. We’re in free public beta now, and you can sign up at http://dashcube.com.

    questions.

  • Thanks Fabrizio. I wish you the best of luck with the business.

  • Sounds very cool, Peter. Thanks for adding.

  • Hi Johnson, that is a great pain point to be focused on. I wish you the best of luck!

  • Hi Bradley, sounds like an incredibly painful process prior to CloudNine. Best of luck with the business.

  • Hi Jeff, sounds very cool! Thanks for adding.

  • I love your focus on making the sales rep more productive! There’s clearly a lot more than can be done in that area. I wish you guys the best of luck!

  • A really key point, that I didn’t emphasize enough. Thanks for pointing this out.

  • Nice!

  • Very cool!

  • Thanks Andrew. This is a really interesting area that has traditionally been tough to address. The trick is making sure that the data entry work is light and easy, otherwise users are inclined to skip keeping their projects up to date. I’m guessing that’s where you’ve spent some of your energy. Best of luck with the business!

  • Great looking UI! Well done.

  • That’s a really interesting problem area. So many of us have experienced the frustration of poorly run meetings with bad follow up.

  • Hi Alun, nice place to focus. Clear business ROI. Thanks for adding!

  • Great example! Thanks for adding.

  • Hi Allison, thanks for posting. I can see huge value in this, including for startups who are searching for a product or company name.

  • Thank you for the great article! At Salesfusion (www.salesfusion.com), even though we are a Marketing Automation platform company, we innovate around the user experience of both the marketer and the sales person who is viewing and taking action on the marketing insights living natively in their CRM. We all know that communication between sales and marketing can be painful or disjointed! The end user experience of the hand off from marketing to sales and back to marketing is the challenge we believe is solved by flexible native integration (our CRM-style database allows us to excel here). As we continue to innovate on the user experience of the individual components of our platform (beautiful campaign designer and dashboards!), we also keep a strong focus on the user experience of those interacting with our data surfaced in CRM.

  • That’s exactly right David. Personal productivity is the ignition key. Thank you for the encouragement, and for the depth that you bring to every post.

  • 11Ants Analytics

    Hi David, I always enjoy reading your articles, this one as much as any. To take you up on your opportunity for some promo! : At 11Ants Analytics (www.11AntsAnalytics.com) we’ve developed 11Ants RAP (Retail Analytics Platform) – a SaaS solution which empowers a retail marketing assistant or a category manager to understand things about her customers which would have previously required a data scientist. Helps the retailer grow customer visits, basket size and margin all with a few fun clicks of their mouse.

  • wtf

    Are you high or something?

  • Alison Shurell

    Thank you, David. Yes – we are planning on packaging our product for start-ups and SMBs in the near future. Please let me know if you’d be interested in talking about this further with any of our founders!

  • Thanks for creating more awareness around startups that make business apps for the first time ever pleasant and meaningful for everybody in an organization.

    In our case at Impraise (http://www.impraise.com/#discover-impraise) we help people continuously learn and develop through real-time 360 feedback with a simple mobile app.
    The whole market of performance management is shifting and we see loads of companies seeking for empolyee-driven peer coaching.

  • ELDIABLO

    WTF DAVID SKOK

  • ELDIABLO

    I LOVE YOU DAVID SKOK

  • Jeff Anop

    David, great post! What direct-to-consumers markets/industries do you see being ripe for disruption by consumer Saas? I love how this is transforming businesses, but could also greatly impact consumers!

  • Scott Golas

    Xmplifi.com is an uber content syndication workflow solution that via our brand manager dashboard builds customized messaging by each social media channel – and places it on an promoters desktop or mobile device. Each message is accompanied by a unique URL specific to the channel, source and promoter. This allows promoters to publish the message with a press of a button and with game mechanics that reward them for doing such.

  • JJJ

    #DAVIDSKOK4LYFE

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