How Do You Demonstrate The Real Value Of Collaboration (Software)?

As I cruised the pavilion at Cisco Live in Las Vegas last week, the display that held my attention the longest was the Collaboration ROI booth. There, the network infrastructure provider making waves in the collaboration software market was demonstrating calculations it had done on how its various solutions were improving efficiency and productivity for specific jobs in verticals like retail banking. In the example I reviewed, banks using virtual loan officers were able to obtain more small business customers because the bank was able to have someone "there" to answer the prospective customer's questions. Now, with all the activity going on around me, why was this so fascinating? Put simply, it relates to a fundamental issue for all vendors hoping to compete in the collaboration software space: How do you differentiate in this crowded market?

Forrester divides the collaboration software market into four broad categories - email/messaging; collaboration platforms (e.g. Microsoft SharePoint, Lotus Notes); real-time collaboration (e.g., instant messaging, videoconferencing, Web conferencing); and social computing (e.g., blogs, wikis, social networks) - with a myriad of vendors jockeying for position in each of these groups. Marketers looking for a way to have their products stand out in this space can no longer rely on features, as those are becoming standardized, and have started to look for ways to demonstrate business value. Vendors developing ways to assess value and then arming their clients with that tool is something I've argued for recently. Of course, providing such counsel leads to marketers asking us the tough question: What metrics should we focus on to demonstrate value? The traditional discussions have all been around operational cost savings - travel reductions, employee retention, and IT savings - and customers overwhelmingly admit to perceiving these benefits in using collaboration technologies. However, none of these really differentiate: All collaboration software has the potential to help businesses cut travel, retain employees, and reduce IT operating costs. So, while marketers attempt to talk about their tools in terms of efficiency and productivity - like faster time-to-market for new products - the messaging doesn't resonate with the buyer (only 17% of collaboration software decision-makers report faster time-to-market as a benefit of collaboration tools, compared to 62% who stated that travel reduction is a benefit). For marketers looking at this reality, the obvious question is, "What's the answer?" This brings me back around to where I started this post - at the Cisco Collaboration ROI booth.

The simple truth is that productivity and efficiency measures are different for each type of job that could benefit from collaboration technologies. Forrester advises IT decision-makers looking at these tools to first understand the challenges their people face and then find a solution that maps to that problem. So, when a vendor approaches with an overly broad story about making information workers more efficient, it comes in at a level too high to be appreciated by the business. And - more importantly - it gives the feeling to prospective customers that the tool being pitched may not suit the needs of their workers. What I found interesting about what Cisco was putting forward in the ROI booth was the attempt to make the connection to a role in a business both qualitatively and quantitatively - targeting at a level you rarely see from the larger vendors. It is the level at which I believe vendors need to discuss the value of their technology, but it raises a bigger question: Does this model really scale for large software vendors?

As currently constituted, large vendors develop horizontal products and rely on partners to customize them for a specific need. They often have a sales force organized into vertical teams, which give them insight into particular types of customers. However, as the Cisco example demonstrates, value is not derived at the vertical level, but at the job level, and I don't foresee large vendors developing that level of specialty in their sales forces. So, while small, niche SaaS players may be able to focus on serving the collaboration needs of a particular job or set of jobs, large vendors need to find another approach. To this end, the partners that large vendors traditionally relied on must have a bigger role in the collaboration software marketing conversation. Partners should help vendors investigate the needs of specific jobs in the verticals they serve and feed that information into the marketing departments so job-specific collateral can be created. Beyond that, product teams must work closely with these partners to ensure the horizontal tools can be tuned to the needs of these specific jobs. While these seem like modest steps, for some vendors it can mean an entirely new way of working with their channel. That said, with the collaboration software market seeing more and more new entrants, it's the only way vendors can ensure they can get their share of the pie.

Comments

targeting a job function

Great article. I could not agree more. We (www.dresoftware.com) have had that approach from the beginning. We target Sales and Marketing professionals with our collaboration product. As time goes on, we will continue to focus on those job functions, which is why we will be adding full web conferencing capabilities to our collaboration platform this summer. We really view our producat as a supplement to the tradtional CRM solution.

the SaaS angle

One advantage we at Kavi (http://www.kavi.com) have found with our SaaS collaboration platform is the added benefit of faster time to market and inherently lower TCO for SaaS combined with the normal ROI factors of a collaboration solution as outlined by TJ.

Hey, why not give customers benefits on both sides of the purchase?