They say that ‘the Dutch’ are conscious spenders. We (yes, I’m Dutch) are known to be very much on top of our money, invest cautiously and ensure we squeeze every cent out of a Euro.Well with that in mind, I should probably refrain from investing in Software Implementers, right? All the stars are aligned for a ‘more for less-scenario’ in the software market: cloud, plug-n-play solutions, offshore delivery. The good old times of mega-implementation projects are soon gone and SI’s will be far and few. Or are they? A conscious spender thinks twice, so let’s spend our money where our mouth is and do exactly that.
Cloud
Whether the stars align or not – one thing is clear: we do need to look up for a trend that is for sure continuing the next decade. Everything moves to the cloud and subscription-based models. This makes the market, as we all know, more competitive so indeed drive the ‘less-for-more-scenario’. But at the same time, it is not easy for large enterprises to adopt a pure public cloud offering. Complex processes, customised backends and homegrown integration into various systems, makes it sheer impossible for these larger customers to simply replace everything with a cloud solution. Hybrid looks to be the max obtainable goal for them: a mix between on-prem and cloud or going private cloud – and many scenarios in between.
The result for larger enterprises is that yes, they will get more for less when it comes to the software and license cost. But the implementation of this all will remain a sizeable project at itself.
A note on Low Code No Code
Just plug ’n Play, right? No implementation needed; it all works once you turn it on. It's what we will all adopt in a few years from now... right?
But hang on. This is all fine if you’re a new, ‘born in the cloud’ company that has from day 1 committed to sticking to using what comes out of the box. But doesn’t the same scenario unfold here? What if you’re an establish medium-sized or large business? There are 2 very important hurdles to task before this scenario can pay off.
1. Processes, tasks, plans all need to rally around how the software works instead of the other way around. It’s not easy for a sizeable business to just adopt a new way of operating that perfectly fits the software which initial intend is to support the business itself…. So while implementation and running the software might be cheaper – what of that gain, do we lose in the short to medium term by having to change how a business runs?...
2. Change management – time and time again – is the overlooked child here. Companies can buy better software at a reduced price. And yes, perhaps changing the way companies operate will in the long term pay off – but change management is not only about processes. It’s the people that play a vital role: consumption drives success here. You need to take the users on a journey of change if you want change to be understood, accepted, and executed well. If users put their heels in the sand, the change to low-code/no-code will come at a cost.
Offshore for sure
If we have learned one thing in the last 2 years it is this: the world can be stopped by a virus, but the virus does not stop the world from spinning. The remarkable way in which businesses adjusted to working remote astonished many. But in ‘software-land’, the tools and processes were ready to go from day 1. Remote delivery from off-shore lower cost countries was already a proven concept, with many Software developers and implementers having people all around the world collaborating over phone and internet. Covid-19 has merely accelerated things. The advantage of being onsite – mainly claimed by the smaller local implementers – is falling away and thus the drive for off-shore delivery at lower cost will increase and so the cost of software delivery for customers will go down.
So… the sky is Grey?
Not at all! The way I see things, the sky is blue and the sun shines on all kinds of clouds of different sizes and forms. The trends towards 2030 indeed point to cloud and lower code, but at the same time we need to be realistic about who benefits fully from these trends and who will only cherry-pick from it when it works. In essence there is just more flavours on the menu.
For software vendors, this means that the market diversifies but that indeed the focus lies on cloud and low code in order to stay relevant in the market. But for Software Implementors, the future looks brighter than ever.
First and foremost: here is a tsunami of large projects coming in the next few years of large enterprises wanting to move to a hybrid model, many of them going private cloud. Smart tools and Automation will mean projects will be more efficient and have a faster time to go-live – but due to the customisation remain sizeable projects, also in the next decade.
Secondly, SI’s will be asked more and more to act as business partner, helping customers adopt and consume their software with maximum value realisation. Change management, business and functional consultancy and academy support will all become important revenue streams.
Thirdly, the drive towards off-shore delivery largely solves 1 problem: gaining access to talent. Local developers will more and more become local experts in their field, while attracting new talent for delivery will come from countries where there is still plenty of supply like we see in India and the Philippines currently to name a few. The smaller tiered partners will still play the card of having local knowledge about the markets, while the larger players will bet on their brands, their robustness and support models with many of them already having consultancy arms up and running.
The winner gives it all
Fast forward to 2030, my expectation is that Software Implementors will still exists, and implementation projects will still be a sizeable market given the difficulty for large corporations to move away from a customised software-landscape. But staying relevant means that you sit on top or in front of the trends. Building our consultancy capabilities now, in order to win later, is going to be key. Helping customers implement, embrace, and consume a software product will give customers the most value for their money – and to take it back to being Dutch: this is exactly where I’d put my signature under. But these days this isn’t such a Dutch habit anymore, it’s how the world runs. And that means that in the competitive SI-market, it is about driving software adoption, -consumption and transformation - the winner has to simply give it all.
Ok, that's my 2 cents, anno 2022, on what might be out there as a future... but anything can happen really, as we see ever so often these days.
Jip
