Why You Should Say NO to Professional Services
This article talks about how we think about the role of professional services in the Enterprise SaaS industry and the onboarding experience we aim to create for our new customers.
If you have a growing number of software buyers, you might have a problem with “professional services”
I am talking about the type of services that customers have to pay for to get their software working. I am talking about those services that seem to often go beyond the scope and over budget. Those services that you are expected to pay 1x or even 2x of your annual SaaS fees to get your system working and live – and with maybe a decent level of user adoption.
The Salesforce success story was originally built on the genius of their “no software” brand strategy
“No software” talked to those IT customers growing increasingly tired of software implementations that ran over time and over budget. It’s perhaps no coincidence that Salesforce.com was born on the eve of the infamous ‘Y2K bug’ – arguably the high water mark for on-premise business software sales and software sales hype.
Salesforce.com tapped a market that was fed up with hyped promises from vendors who handcuffed customers to expensive implementation programs that took months to show any sort of usable solution.
I was one of those customers. I had been badly burnt on a CRM implementation.
So, I fondly remember trialing salesforce.com in 2004.
How cool was this! Within an hour I had my CRM up and running and I didn’t need to worry about installing a bunch of CD-ROMs or worry about upgrades or data backups. I was in control.
More than a decade on, what happened to the SaaS dream in Enterprise land?
It seems that we have moved these same problems from on-premise into the cloud!
Sure, Salesforce.com provides more functionality out of the box than ever. And there are thousands of cloud applications for the enterprise that can be activated in hours.
Yet, I see so many of our Enterprise clients experiencing long implementation delays and incurring huge bills on solutions that enjoy low user adoption.
It’s because of something I’ll call the “configuration conundrum”
Most execs now understand that customising a software solution is an expensive adventure. The large waterfall software project is usually a high risk road to big budget overruns.
But what about system configuration? There’s no coding required. So it must be all good right?
Savvy business software buyers are awake to the reality that highly configured software solutions are almost as “bespoke” as a solution riddled with custom code. This is because they require “experts” to set up and “experts” to support. You know, the people in “professional services” – they are the young dudes charging $200 an hour.
Or you might be lucky enough to employ people who know how the solution is set up. They are the gatekeepers of interminable change requests. And they know they are indispensable.
They also talk configuration yet if you pull back the covers you will start to find hidden scripts, SQL injections all over the application. You got yourself your very own unique product and all the nightmares that will bring.
“Out of The Box” versus “Configuration”
Savvy buyers also understand the distinction between “OTB and Config”
Out of the box (OTB) software means it works when you turn it on. Or you might need to turn some features on or off. Whereas, system configuration requires you to use your keyboard and your brain – you have to think thru the impacts on the solution or you need to “know stuff” about the solution
A simple example would be – say – your iPhone. If I want to activate a personal hot spot with my phone – I just turn that feature on. That’s “OTB”. Whereas, when I need to connect my phone to my Exchange email – that’s configuration because I need to know the details of the server. It’s not as easy – but I am OK with it. Configuration is manageable when it is standalone and “linear” like this.
Adding my exchange server address has no impact on 99% of the iPhone features. But the problem is that most business software configurations are related and therefore “exponential” in the way they increase complexity. eg. add a custom pricing field to your opportunity table and that has flow on effects. Add a reference table for product categories and you just doubled the complexity. And so it goes.
How Much Configuration is OK?
The nature of Enterprise software is that each customer will have some unique requirements. They are going to need some custom fields, some custom tables perhaps, custom business rules etc. This is especially true of sales compensation. It is inherently complex.
How many features in the solution can you configure before the “configuration conundrum” kicks in and your project goes south?
The answer is – somewhere beyond six configurations – and somewhere before you get to 35 configurations.
Why is This So?
Take a sheet of paper. It’s thin. For our purposes – “thin” is a metaphor for simplicity. Thickness is a metaphor for complexity.
Take the sheet of paper and fold it.
Let’s think of that one fold as a configuration. If it’s a normal piece of paper you’d find in a normal office – it’s about 1mm thick.
Now that you have folded it – it is about 2mm thick.
Metaphorically, you have doubled the “complexity” – but really, the paper looks no thicker than it was before. Do it again, and then fold it again, and one more time.
That’s four folds in all. It’s now one and a half centimeters thick. It is noticeably thicker than a normal piece of paper – but hey, it’s still less than one-inch think.
Let’s do it six times then. Now you are noticing a difference. It’s now 6.4 cms thick. That’s more like the thickness of a book than a piece of paper.
So, at six configurations we have noticed a change. Your Incentive Compensation Management solution is noticeably more complex – but it’s manageable. You have got your hands on it…you can still hold a book in your hand – pretty much like you hold a sheet of paper.
Now, let’s say we let our project go – let’s make it really “customer focused” and we allow 35 x configurations – that’s an additional 29 x configuration steps.
How thick you do you think it will be?
Yes, it’s going to be one fat book. A set of encyclopaedia’s maybe? Maybe a 10 metre thick book? Maybe 100m even? What do you reckon?
Before you turn over the page, write it down.
Well, that piece of paper is really thick
If it is resting on your hand… the top will be touching the moon.
Yes, The Moon!
Your piece of paper is now 250,000 kilometers thick!
That’s what happens when you start creating a really complex sales commission solution out of a standard product. It get’s really thick and it gets very hard. Way beyond what people realize. The project becomes “unknowable”.
You are well on the way to the moon when you hear people say things like “we just need better documentation”. It sounds great in a PM meeting. So sound. But it is bulldust. It is rubbish because you have left the Earth’s orbit of what can be understood or explained. You are going to the moon.
Oh, and remember that project meeting where a certain stakeholder demanded that extra configuration ticket. It was so important, right? Do that and you can now go to the moon and back
But sadly, here’s the thing. So many enterprise software projects never make it back. They reach the moon and all the poor suckers working on the project get stuck there. The budget gets cut. The project goes into maintenance mode. There is no money or resources to ‘fix things’ and return to earth where everyone could live out a happy career thereafter.
So, it’s time to call time on “professional services” for sales incentive compensation management.
To be more specific, I am talking about professional services staff who are in fact wannabe product engineers. Because that’s what we are playing at when we go beyond 6 x configurations – the project managers, the BAs, the product support people, those cool guys who can write a little bit of script to get you out of a fix etc.
Instead of professional services… what you really need is people who can simultaneously traverse these four domains when they set up the product to deliver you a solution.
People thank know:
- What the business requirements are
- What the product does
- How to make the requirements fit what the product does
- How to say no to all but the most mission-critical requirements that require a configuration or customization
So, if you are adding more than six configurations – you have made one or all of these mistakes:
- You have the wrong people setting up the product
- You have chosen the wrong product
- Your business processes are broken
Usually, the blame rests with the people.
Maybe Your Product Fit Isn’t Great
Business processes are never perfect – just don’t try to replicate them in a software system. The fact that this mistake is actively encouraged by most stakeholders doesn’t make it forgivable.
Finally, a good question might be – how many people do I need to set up your new product?
I don’t have a rule for this. But if I did, I’d reckon it would involve the number of fingers on my left hand.
Yes, I imagine you are rolling out your new sales performance management solution across the universe with thousands of users with as many user stories signed off by the steering committee.
You need trainers, you need lots of resources. You just got sign off on a massive budget. That’s all good. Just don’t let any of these people near the product set up.