In this posting of his excellent blog Dennis Howlett makes an observation I would like to question:

"In the on-demand world, you have to continue to grow the customer base in real terms. It seems that in NetSuite’s case, the customer base is not growing as rapidly as they are leading us to believe. Given that Nelson stated the expected customer additions on a quarter by quarter basis are expected to be in the range 300-500, you can be sure this is a metric that will be revisited."

In my experience managing SaaS organization, I learned that functionally rich and business process supporting (read "complex") applications provide opportunity for strong subscription growth on the existing Customer base. It is very difficult to "lose" a Customer in this environment because of their high operational dependency, cost and risk they would have to assume to undertake such a move. Since NetSuite seem to be in transition to different business model from the one they started from, it is only logical that many of their early Customers, who were attracted by very different value proposition do not find the new one very compelling, and leave. Obviously for them the risk & cost equation is not compelling because they do not require such a level of process support.

Given very high cost of Customer acquisition, due to cost of sales and post-sales ramp-up activities, the subscription revenue expansion ( i.e. more users/licenses using the applications within the same organization) offer excellent profit margin alternative to chasing brand new customers at any cost. I do not advocate Sales entrenching, but balanced management of the sales pipeline has good economic reason.

Disclaimer: I have absolutely nothing to do with NetSuite, no have any investment interest in the stock.

I am very intrigued by a concept of Enterprise information flow based on knowledge workers’ conversations as opposed to "snap shots" of data, stored and based in contemporary databases.

"So we’re going to see some things change in the enterprise. Conversation is going to be captured and archived and retrieved and enhanced and allowed to flow. We’re going to use blogs and wikis and twitter and IM and audio and video, we may even have tiny pockets of e-mail and fax and (dare I mention it) telex. Every conversational action will hit an enterprise ping server, populate search engines, aggregators, data miners and online media and even text scrapers."

"Musing about enterprise information and flow"   J.P. Rangaswami

This appears to be an attempt to deal with the perennial adoption problem - people like to communicate using unformalized data supported by conversations, chat, email and wiki technologies, while Enterprise software applications need normalized data to process into meaningful information in order to support business processes. The root of this problem can be exemplified by the desire to gain great value of 360-degree visibility of Customer at a minimum of user keystrokes, which in my opinion is not a technological issue, but a change management one. It requires substantial intellectual effort to transform contextual data of tribal knowledge into Enterprise grade information, and even more so, if we consider a model of extended Enterprise, as it is proposed:

"We will be able to manage vendors at least as well as they manage us. We are calling this VRM, Vendor Relationship Management. The project is being launched within the Harvard’s Berkman Center. The core concept is that the individual should be able to manage their relationships with their vendors and suppliers, based on the idea that they actually know more about specific preferences, updated data, etc. And, further, that most CRM systems oversimplify customer data in order to segment, and to effectively manage the info; ultimately they are just a sales system, not a relationship system."

Doc Searls

"The need for change bulldozed a road down the center of my mind. - Maya Angelou (-1928)

Perhaps a better question to ask would be "How can we "mine" conversations to support a Business Process? - There is a lot to learn.

In the words of Robert Heinlein - "I am only an egg".

“Measurement of the project’s value post-implementation is often sadly lacking unless the organisation has a PMO or other business structure that sees and measures the big picture.”

http://blogs.zdnet.com/projectfailures/index.php?blogthis=1&p=574

In my 30 years of experience there was only one project which had specific monetary targets to achieve, and metrics to assign accountability. Needless to say this is still my favorite one. IMO opinion that is the start of any business case for any BPR/IT project.

This is the name of Ron ‘Tater Salad’ White’s comedy show and it made me think - is it actually true?

[youtube]http://www.youtube.com/watch?v=8suVjclu8Zo[/youtube]

Can application of business process fix stupid? After a period of reasonable deliberation, I have come to the conclusion that Ron is right, they don’t call him “Tater Salad” for nothing. Even BPR can’t fix stupid, but it can eliminate it.

Nine weeks ago I ordered an audio adapter for my Blackberry Media Player, which never worked as advertised, from Seidio (seidioonline.com). After a long wait I called them and found out that they misspelled my address and the package was returned to them by USPS. After waisting half an hour of my time validating my address they assured me that I will have it in a few days. A couple of weeks passed with no package in sight, and I called them again, but nobody could explain the mystery of the missing package. I asked to cancel my order and to return the payment to my credit card, but was begged to wait just a little longer. Week later I filed a dispute for the charges with my credit card provider and completely gave up an idea of stereo sound coming blissfully from my Blackberry. Last night I got an email from Seidio, telling me that the package was returned again by USPS and requiring to validate the address. Imagine that to my surprise they shipped it now to my billing address and made 2 errors in it.

You probably wonder, as I do - how difficult would it be to automatically grab the addresses from the web form completed by a Customer to print shipping labels?

Sandy Kemsley in her Column2.com blog touched on the issue I would like to explore:

“Another issue is that the business tended to abdicate their responsibility for stating what they need to IT, so IT had to just make some guesses about it (which never works out all that well). Now, much like Connie Moore’s earlier comments on how business and IT need to be blended, not aligned, Phillips said much the same thing about breaking down the barriers between business and IT.”

The terminology, used in IT environment to describe business processes improvement and automation initiatives, is pretty telling – the IT talks to “Business” to understand “their” requirements to build software applications, test them, and “deliver” them to “users”, who are rarely happy with the results. Now, as a true believer in Neurolinguistic Programming, I will try to analyze the implications of this language use:

1. There are two parties to this initiative them (business) and us (IT), and in the best case scenario our interests are aligned, which means they are not really the same;
2. “Business” communicating requirements to IT, implies that “business users” truly understand how existing processes may and can be improved and automated. This assumption on a part of IT is a very dangerous one at best, because the development of a meaningful process improvement strategy and implementation of this strategy with an appropriate technology requires efforts of multi-discipline professionals, and leadership perspective, that most organizations do not have an access to internally. The “business users”, who are interviewed by IT business analysts, are certainly quite knowledgeable about the processes currently employed by their business units, and may have some valuable ideas for their improvement, but they rarely have appreciation of effect their requirements on end-to-end organizational process flows between the business units, technology ramifications, and over-all application thought leadership required to produce positive ROI;
3. “Deliver” implies supplier/customer relationship and by extension denial of responsibility for overall success or failure, and explain lack of satisfaction with the results.

I want to make very clear, that this is not a rant about qualifications and quality of people involved - for the purpose of this discussion I assume that we are talking about competent professionals of high integrity, who are not completely focused on politics (see Seven antidotes to the caustic politics of IT failure). I believe that common methodologies used to define, justify, and execute these initiatives are fundamentally flawed, and as such produces unacceptably low yield of success.

There is nothing as useless as doing efficiently that which should not be done at all.
Peter Drucker

I believe the missing key is thought leadership, a holistic approach to Organizational Transformation that promotes integrated methodology of clear statement of goals, agreed set of metrics, which would allow to optimize business processes to the stated goals, change management program to assure adoption, application design focused on support of the change management program, technological implementation of software to support the application, contextual process/application training program to support adoption, and finally – compliance performance monitoring to assure that the investment is actually achieved.