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C24 Whitepaper - The Consumerisation of Enterprise Applications


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C24 Whitepaper - The Consumerisation of Enterprise Applications

  1. 1. The Consumerisation of Enterprise Applications – C24 Ltd 1 | P a g e THE CONSUMERISATION OF ENTERPRISE APPLICATIONS Enterprise applications are at a cross roads. Legacy applications are still being sold, used and upgraded whilst many developed-for-cloud apps are being purchased by corporate organisations, creating a shift in the industry that is now a reality rather than a prediction. Startups are disrupting the traditional enterprise application market and increasingly large businesses are taking chances on apps from newer market disrupters. This paper looks to bring together some of the perspectives and research on some of the trends in the enterprise application market as complex business software becomes increasingly consumerised. User Friendly Interface User adoption is critical, especially in an era of BYOD (Bring Your Own Device) or even BYOA (Bring Your Own Application), and the main way of improving satisfaction and adoption of enterprise applications is to improve the user interface. Increasingly, enterprise app vendors are recognising that in order to increase user satisfaction with their solutions, interfaces need to be as user friendly and intuitive as possible; on a level with the types of user interfaces seen in the consumer sector (i.e. Facebook, Twitter or online booking platforms). Nobody would expect to be trained on how to use the functionality in Facebook or Twitter, however many enterprise applications require hours or even days of training before a user can be deemed ‘fully functional’. Analysts have even cited that 80% of enterprise apps succeed due to their ease of use, hence it is of critical importance that new products and functionality upgrades are developed with immediate use in mind. Users expect to be able to sit down and immediately use an application, with little to no training. A founder of a CRM app called CRMNext found that the main reason that 50% of CRM application deployments failed was due to difficulty and complexity experienced by users. Additionally, employees expect to connect to services from a
  2. 2. The Consumerisation of Enterprise Applications – C24 Ltd 2 | P a g e range of devices, in the same way they would access their consumer applications from a web browser on a desktop or via their tablet or smartphone with minimal effort. Compare that with a traditional desktop application that has no mobile functionality, and the gap between the consumer world and the enterprise world becomes glaringly obvious. Combined with the fact that many of these consumer applications are free or low-cost, employees quickly lose patience with applications that can sometimes have cost millions to purchase, implement and manage, but which still do not work and adapt to their evolving expectations. Research cited in a recent article by Forbes highlighted that well designed software interfaces are proven to lead to higher productivity levels as users spend less time figuring out how to use unintuitive applications and more time interacting with the tool. As PC Advisor put it, “the difference is customer experience”. Users must be able to install and be up and running immediately, without reading a manual on how to operate the application. Vendors are therefore looking to make their applications slicker, simpler and low on bandwidth requirements so that apps can be accessed quickly and easily online and through mobile devices. Despite this progress, the cost of simplicity is high – as simplicity for the user is often a result of lots of backend technical work performed by the central IT team to ensure that all tools integrate seamlessly. Instead, IT teams should steer away from the speeds and feeds of IT and instead look at developing valuable ‘business partnerships’ with their application users to ensure more productive and optimised usage of apps across the workplace in the beginning, rather than trying to retrospectively integrate disparate systems. Subscription Pricing Subscription pricing is also a feature of many modern cloud based enterprise applications, further narrowing the gap between enterprise and consumer applications. Whilst companies may investigate a range of options about where to house their IT for maximum cost savings, most agree that software-as-a-service offerings reduce time, money and resources when it comes to managing the ongoing application upgrades and underlying hardware. For instance, Toyota brought a large amount of IT infrastructure back in house, but chose to capitalise on the savings offered by many software-as-a-service applications that enable the delegation of the software and hardware upgrades to the SAAS vendor. The availability of enterprise applications under a pay-as-you-go model means that the playing field has been levelled for many smaller companies who previously could not afford the upfront licence costs – now startups and SMBs have the ability to access enterprise functionality and change perceptions about how applications should work for them.
  3. 3. The Consumerisation of Enterprise Applications – C24 Ltd 3 | P a g e As cloud technology matures and becomes more accepted at the corporate and enterprise level, larger businesses are also experimenting with non-traditional approaches that enable them to access subscription based pricing – without needing to go through layers of finance sign offs that may be required for high-cost capital purchases. Many are now utilising cloud based services such as Amazon Web Services or Microsoft Azure Cloud to deliver reliable infrastructure services on demand with lower costs of entry than would be available years ago. This also delivers a benefit for software developers who may not have previously had the capital available to build expensive infrastructure platforms on which to house their software; they can now enter the market at a lower developmental cost and bring products to consumers faster. But it isn’t just startups and disruptors who are delivering their solutions via subscription models. The majority of the mature enterprise application vendors all have their own software-as-a-service offerings to meet the demands of a changing consumer market. Oracle has reported that revenues from new software licences have dropped by 17% whilst at the same time revenues from their cloud services have increased by 29% in the same period, showing the shift in the market as vendors pivot to match client demand. Open Source Development Many consumer or freemium apps take advantage of the cost benefits that Open Source platforms offer, building on previous development work carried out by online communities to offer bespoke functionality for their applications. Whilst Open Source apps still have very low market share (as little as 1 or 2 percent in the ERP market), software vendors are recognising that in order to integrate effectively into organisations’ IT environments, it is crucial that new as-a-service applications are developed on industry standards. The rise in the use of common public cloud services will mean that many established software vendors are pushed to ensure that they deliver services that can be delivered across these public cloud offerings, by following industry recognised standards for maximum interoperability with other applications. It is expected that the increased popularity in Open Source development will further penetrate the enterprise application market, and one suggested way cited in Enterprise Apps Today is for Open Source app developers to build on an Open Source core, but develop safer, bespoke software around this that can be supported and commercialised for better security and steadiness.
  4. 4. The Consumerisation of Enterprise Applications – C24 Ltd 4 | P a g e Integration A key feature of many consumer apps is their ability to integrate into popular application ecosystems. For instance, many SAAS CRM systems (even free versions) come ready with the ability to integrate into mainstream email clients. Within the enterprise application space, this level of integration is limited. Companies such as Salesforce are looking to create their own standards by creating the Salesforce App Exchange where developers of products that are complimentary to Salesforce’s CRM can develop, integrate and publish apps that work in conjunction with Salesforce. Outside of initiatives such as this, integration is mainly limited to integration within a vendor’s portfolio set according to a Forrester report. For instance, you can purchase an analytics tool from the same vendor that created the ERP software and integrate the two solutions. Outside of the vendor portfolio, the level of integration is low and adherence to standards is mainly limited to a hardware and infrastructure level. Improving integration is an obvious objective, however it is not a simple task as enterprise applications consume, produce and store huge amounts of data, and integration between not only different applications, but on premise and cloud services, means that real-time reconciliation of data is critical for the integration work to be deemed a success. Furthermore, integration work on the part of the software vendor across a number of different applications also ignores the fact that many enterprises have legacy IT infrastructures that do not adhere to the standards warranted by most modern application sets. Consumers are used to the flexibility and agility experienced when accessing web applications across the internet and understandably expect their work applications to meet those same high thresholds of agility and integration. Mobility As employees demand more from their corporate IT systems, mobility will inevitably increase in importance as mobile or remote working becomes the norm in most workplaces. Users will expect to access their applications from wherever they are, whether that is at a coffee shop using public Wi-Fi or in a branch office. Additionally, users will want to dictate the device they use – in the same way that they would access their own personal applications (mobile banking, shopping, TV streaming services) via a range of devices to suit location and accessibility. A recent IDC survey revealed that 40% of devices used to access business applications were personally owned by the user – and this is an increase of 10% from 2010, so we can only assume this will increase. Despite the evident trend, this expectation from the user is not matched by the enterprise. In fact, 75% of organisations in the survey have no business applications - or plans to create these applications – designed for smart mobile devices which highlights the disconnect between user expectation and business reality.
  5. 5. The Consumerisation of Enterprise Applications – C24 Ltd 5 | P a g e The reason for developing mobile versions of enterprise applications is not just to keep the user happy, but is a way for the enterprise to keep its employees connected to customers for 24/7 support and also to reduce the costs associated with purchasing devices. After all, if the user is happy to bring their personal tablet that they know and love to work for certain tasks, then that is one more device that does not have to be purchased by the company. It is important that corporate IT teams are not left behind on this issue, as their lack of involvement could lead to serious security breaches if not managed correctly. According to Gartner, 64% of enterprises said mobility projects forged ahead without the full involvement of the IT teams, with many employees utilising a range of consumer applications, personal data storage accounts and their own devices. Employees were even starting to develop their own applications on cloud infrastructure in order to do their jobs more efficiently. This is a valuable resource that organisations should harness rather than prevent. Furthermore, sales and marketing teams are encouraged to spend more face to face time with clients; on the shop floor, in meetings or travelling – and mobile devices better lend themselves to this flexible approach to information delivery. Enterprise software vendors are now having to think about how they can make their apps more consumer-like in a bid to make them more attractive to organisations who are recognising that desktop based applications are not going to work within a flexible and collaborative sales environment. Generational Changes The move to increased mobility and higher expectations is somewhat down to a change in the age of new employees coming into workplaces. Millennials have grown up with the internet – it is a ubiquitous resource in their daily lives; supporting their school work, research, job applications, personal entertainment and work support and guidance. Combined with an enterprise software industry that has remained relatively unchained over the past decade, and the conflict between expectations and delivery is ever more present. Larger vendors are failing to invest in redesigning their applications, merely adding functionality to their vast portfolios in a piecemeal fashion. Compared with startups who are designing user-friendly interfaces from the ground up, the gap between consumer software design over the past 24 months and legacy enterprise applications that are over 20 years old is widening. Many software vendors are now implementing cloud versions of their tools, yet these alterations have usually been done retrospectively and user interfaces are often not the primary defining feature of these newly launched tools. And the generational issue goes beyond the user interface. Millennials now expect to be able to interact socially with colleagues and collaborate in real-time, and many software products are being developed to address this need for social collaboration in the workplace, such as Yammer, which not only enables
  6. 6. The Consumerisation of Enterprise Applications – C24 Ltd 6 | P a g e conversations via technology but can act as a knowledge hub where specialists can share insights and information with each other. This change in expectations has meant that the enterprise market has really been opened up to software startups that previously used to battle with credibility issues when selling to large corporate customers, but can now differentiate themselves against the legacy enterprise application providers in the market. Bring Your Own App Following on from the theme of ‘bring your own mobile device’ is the trend of ‘bring your own app’. Tech savvy employees are no longer waiting for their company’s IT team to find a solution; they are solving the problems themselves by developing their own apps or code, or introducing applications they have found or use at home, to the workplace. This is not a new phenomenon, in fact as far back as the 1980s, ‘bring your own app’ was a trend where workers would bring in their own spreadsheets and formulas developed at home to assist with day to day work activities. Picture the situation. You ask your marketing department to design an e-newsletter that is going to be emailed out to prospects. The IT department previously installed a marketing application that includes a newsletter function, but it doesn’t track opens or personalise the emails – it just allows you to design a newsletter and send it en masse to an email list. Your Graduate Marketing Assistant tells you that the online e-shot tool, Mailchimp, might be a better (and potentially free) option that can help with tracking and analytics – and is available immediately to use. It will probably deliver more than your installed legacy product can do, however it is not a ‘company approved application’. What is the best course of action? As a workforce we are all more technically savvy than ever before, and organisations are trying to channel this energy for ‘bring your own app’ into managed application stores, where users can go into a ‘store’ of pre-approved apps selected by their company and choose which ones they want to use. It may be that a company offers a range of email clients that workers can choose from – after all, if it means the employee can do their job more productively on a technology platform they are familiar with then it makes sense for the company too. As previously mentioned, Salesforce’s AppExchange application store is positioning itself as a hub for enterprise applications, all centred around the core CRM system. This not only drives integration between software products, encouraging developers to create plugins for their tools to help foster collaboration between applications, but also encourages a newer generation of developers to create applications at the enterprise level; with a clear route to consumers through the AppExchange. Companies not using Salesforce’s AppExchange or another bespoke application store need to ensure that they have sufficient policies in place about how employees interact with personal applications in a work environment. This extends to what tasks the
  7. 7. The Consumerisation of Enterprise Applications – C24 Ltd 7 | P a g e personal apps can be used to deliver, and also what data can be processed by these applications. For example, a CFO would not want his staff exporting confidential financial data to an employee’s mobile device to review within a personal application that may store all data in a public cloud storage service. Conclusion In conclusion, there is a change in the enterprise application industry developing at both sides of the market. Software vendors are recognising that they need to make their solutions more user-friendly and are developing more consumer-type interfaces to enable them to reach a new generation of workers who expect high levels of flexibility and agility across their applications. And on the other side, customers of enterprise application products are now seeing their employees taking proactive steps to find the applications that best suit their job requirements rather than waiting for their employers to find a solution. This creates a bridge effect, where software vendors and employees are meeting in the middle to move enterprise applications forward and develop functions that are aligned to user needs rather than purely confirming to company processes. About C24 C24 Ltd is one of the UK’s leading privately owned specialist managed service and hosting providers, based in the Midlands, UK. Working with businesses all over the globe, the company manages, secures and delivers critical business applications to over 100 countries, with a particular focus on the legal sector. We focus on specialist application hosting and business analytics, working with companies across the UK and the globe to deliver bespoke enterprise hosting and business intelligence solutions.
  8. 8. The Consumerisation of Enterprise Applications – C24 Ltd 8 | P a g e References