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This is an exciting time to be in enterprise software. There are dozens and dozens of interesting new companies that are reaching scale. Marketplace competition between incumbents and up-and-coming companies is intensifying. And, there is increasing interest on the part of buyers to consider cloud options for supporting their business processes. With the cloud and Software-as-a-Service, we have a new chance to get enterprise software right. We saw signs of progress in 2015; in 2016 we’ll really see that promise come to fruition. Here’s what I expect to see:
The rise of Value-as-a-Service
Virtually all enterprise software is either cloud-based or has the option to be hosted in the cloud and delivered as a service. In 2016 the focus will shift away from the delivery model to what is actually being delivered, and rightly so. The cloud economy is redefining customer success, and power is shifting from vendor to customer. Multi-year contract lock-ins are out. Vendor accountability is in.
Customers have a new bill of rights—to demand quantifiable business value from solution providers. The vendors that are best able to articulate and quantify the value they're delivering for their customers—whether in the form of savings, lead generation, revenue improvement or operating efficiency--will be in a much greater position to retain long-term customer relationships.
Fewer and fewer clicks
Richard Branson has it right: Time is the new money. The flow of information and the accumulation of data that humans have to process has accelerated to unprecedented rates, while our time has remained constant.
Software that can maximize human experience, insight and creativity by harnessing all that data to automate routine tasks is the new frontier. The Holy Grail is to have no user interface at all because the software can capture people in the context of what they’re doing and proactively present relevant insights and suggestions, along with the ability to take actions such as selecting, approving or rejecting something.
We’ll move further toward that grail in 2016 with smart, data-driven alerts, push recommendations based on time of day and location, and continued improvements in the ability to interact with systems via voice. Employees will increasingly become exception handlers. Anything that a computer can do better, it will do, only requiring the employee’s attention at a point where they need to solve a problem or do something that only a human can do.
Companies standardize on the postmodern ERP Ecosystem
Gartner has called out 2016 as the year that heavily customized on-premise ERP implementations are relegated to legacy status. Rather than rip and replace these systems, companies will take the path of least resistance by building out a cloud-based ecosystem around them in the areas of CRM, HR, and spend management, to name a few. Maybe by 2020 we’ll start to see total system replacements, but for now cloud applications can help companies wring more value out of these massive core technology investments, and this will be the standard setup for the foreseeable future.
Early cloud adopters leap ahead
Companies that took to the cloud early and have achieved widespread user adoption and optimized transactional workflows now have accumulated large stores of data. They are well positioned to leverage some of the latest innovations in big data technology to overlay their cloud investments to get additional insights that could uncover new areas to optimize for efficiency, or possibly even opportunities to create new revenue streams.
These early adopters are already enjoying greater agility and better visibility into their business, and quite possibly improvements in revenue and cost containment relative to their peers who haven’t made the leap to the cloud. They are well positioned to use data as an accelerator to propel them past the competition.
Cloud deployments will get bigger
Cloud adoption will continue to grow as cloud becomes the de facto standard for postmodern ERP and early cloud adopters will continue to grow their cloud deployments. Additionally, as cloud solutions mature and deliver results, we’ll start to see very large enterprises that never previously considered cloud as an option embrace this new paradigm. Cloud deployments will grow not only in number, but also in size and scale.
Continued emphasis on spend optimization
The outlook for enterprise software is bright due to the cloud, but there are clouds of a different nature on the horizon. Global terrorism is on the rise, as is global warming. We’ve seen seven years of economic expansion and loose monetary policy, but the recession of 2009 hasn’t entirely disappeared from the rear view mirror. Some are predicting continued expansion; others dire collapse. What we are predicting is those companies that remain careful in their spending in 2016 will be in a better position to weather economic turmoil should it come our way.
While no one knows how 2016 will play out, it’s quite clear that companies that are focused on value, on maximizing resources and people and time, on pushing the boundaries of innovation, and on using data to run their business smarter will have the agility and flexibility to manage through whatever will come.