Pilots - What are they Good For?
In Part I of this series I’ve questioned the fact that Enterprise software providers cannot provide a trial version and have compared the purchasing of a core software without trying it out to buying a car without driving it.
In today’s article, I’ll go even further and claim that going through a POC is a win-win exercise important for both you and your software provider.
For the purpose of this series, by “POC” I mean a Proof of Concept or a Pilot period, usually lasting 1 month, sometime paid but usually unpaid.
Sure, it’s good for you
Purchasing any product, and Enterprise software in particular, is an act of choosing the best option out of several alternatives of which there is missing information to some extent. When companies purchase Enterprise software they need to evaluate alternatives about which they know very little. They would normally know the price, main functionalities, SLA, and that’s about it. However, they will forever be unclear about the exact same things that the software providers work hard to downplay and camouflage; software bugs, level of service, level of expertise, and the suitability of the solution to the needs of the business.
Moreover, as customisable as a Software can be, it always requires a level of organisational adaptation which is impossible to predict and quantify during the purchasing process, and it is sometimes difficult to envision how daily work will look like with the new solution. Therefore companies tend to focus and give extra attention to topics which might seem very important at the time of the purchase but ones which might be completely irrelevant once the software is fully integrated into the organisation (i.e. can users upload their quality records with the Excel spreadsheet they’ve been using until now, and which are now completely irrelevant and replaced by the QMS which the company purchased).
Therefore, the early stages of software evaluation are all about getting to know each other better and building trust before continuing down the road together. For the purchasing company, the main goal of a POC is the evaluation of the system within the organisational and business contexts, giving her the chance of using production-similar data, on top of company infrastructure, using actual company processes, and most importantly, by future end users of the system! This way, she can identify major bugs and roadblocks which might have been “worked around” during the demo and evaluate the usability of the system and how well it is received by end users.
Moreover, POCs enables her to get a better understanding of the implementation process and the support model, and therefore helps her to revalidate the cost structure proposed by the vendor, and make sure that there are no hidden fee laying around somewhere.
But it also good for you, Software Provider!
Let’s face it, Software providers will forever try to present their product in a flattering manner, focusing on its strengths, its “killer features”, unique UI, etc. Also, they will downplay its weaknesses, and try to “camouflage” it as much as possible (AKA “It’s not a bug, it’s a feature”). They will give as little information as possible to demonstrate that their product address what they see as the needs of the customer, and will try to create a sense of urgency by focusing on compelling events, whether real (i.e. an upcoming inspection) or made up (i.e. price increase). And who can blame them? We all do the exact same thing when we go out on a Friday night! We pick the clothes that make us look taller / thinner / prettier, we pick the jewellery that will make us appear successful, and we’ll try to drive the “right” kind of car to make an entrance (but one which would be easy to park J ). We all try to look at our best and as attractive as possible when we try to find our next partner. That is just human nature.
The underlying assumption of this approach is that once a customer makes the purchase, he cannot go back, often referred to as the vendor lock-in effect; once a customer purchased a software, they were basically “married” to it and is unlikely to switch systems again.
However, in today’s SaaS world, there’s usually several software solutions to each need, and with today’s advanced data migration tools customers can migrate from one software to the other fairly easily and with little effect on business continuity.
Moreover, in a subscription model it takes months to fine tune the system and reach a working mode plateau. In their first year of service customers tend to perform more changes to the system, roll out new processes, ask more questions, and require more assistance as they learn the solution and fine tune it to the needs of their business. For SMB subscriptions it usually takes more than a year for a contract to yield actual profit due to this intensive learning curve.
All of a sudden selecting the right customer becomes super important! Making the sale is not enough anymore, and you actually need to think about the long-term engagement and compatibility with the customer before engaging with it for the year; the subscription model makes it imperative that we consider the long term, rather than just focus on a single sale.
A customer who is unhappy with the product, speaks lowly of it, and churns within the first year is both a danger to the brand as well as a significant risk to consume disproportional resources from the vendor which will derail him from focusing on the customers to whom he brings true value. Projects fail for many reasons, be it technical compatibility with requirements, management failure, or simply poor “chemistry” within the project team, and sometimes it is wiser to walk away from projects that are doomed for failure but will drain everyone’s resources in the process.
Bottom line, it all comes down to building trust in baby steps. Very much like you wouldn’t marry someone you’ve just met, both Enterprise companies as well as Software providers need to make sure they know what they’re up against, and that they enter this new engagement with clear and realistic understanding of what to expect and what would be considered a success.
A POC is the perfect tool start a new engagement in a small and uncommitted manner which can later grow to a long-lasting relationship.
Stay tuned for Part III in which we’ll cover some important aspects of the evaluation period.
Have your thoughts about POCs? Share them with us in the comments!