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“Appification” Part 2 – What is the impact to ECM?

In my previous post (Part 1), we looked at the appeal of Apps, and why we grew to love them. Now, let’s look specifically at the impact that Apps have to the ECM software industry.

Impact to the ECM Industry

With over 25 years under its belt, the ECM industry (with its Document Management pre-cursor) is a relative dinosaur in enterprise software terms. It was established as an industry, about the same time as ERP, and before CRM, BPM or eCommerce.  So, as is the case with any other respectable octogenarian, we are pretty set in our ways. Yes, we may introduce new functionality or attach another technology segment under the ECM moniker every now and then, and we will endlessly debate if ECM, EIM or Process Services is the right name for it, but fundamentally we are still delivering software the same way we always did.

But change is afoot: Whether we like it or not, the “Appification” culture described in [Part1] is challenging the fundamentals of how the software market works, including ECM, and how relevant it remains to the enterprise of the future. And in Darwinian terms, we’ll have to either evolve to survive, or we will face extinction.

There are two main areas where “Appification” has profound impact to the way we operate today: The way we design products, and the way we take products to market.

Impact to ECM Product Design

“Appification” brings fundamental cultural change, to the way software is conceived, designed and delivered. Every core design element is challenged, as well as every classical development and delivery methodology.

  • The “Apple” effect: Apple’s “Design Thinking” principle, threw the rulebook away when designing the first iPods and the first iPhones. They became icons of usability where less was more: who would have envisaged an electronic device with no buttons, just a glass slab? Where ALL functionality and behaviour is software controlled? Where accelerators, proximity sensors, hand gestures and voice command, would become the interaction controls, instead of a mouse, a keyboard, switches, levers and knobs. How many enterprise, and in particular ECM, solutions offer similar UI experiences?
  • The “Singularity” principle: For years, enterprise software vendors prided themselves on the functionality breadth of their offering. The more features, the more capabilities, the better. Apps challenge that: What is the most critical element of software design? The User Interface and usability? The richness of functionality? The quality of information? Apps’ “task-oriented design” challenges that principle: “Do one thing, very well”. They are designed to remove complexity and isolate distinct elemental functions, and then deliver these in the most intuitive manner possible. What ECM functionality do you include or exclude from an App? How many Apps would you need to provide a complete “set”?
  • The “EFSS” effect: “Enterprise File Sync & Share” has been one of the most disrupting apps in the ECM field. Even though there are clear overlaps, it did not set out to challenge the traditional ECM vendors, as such, it created a completely new market of its own by addressing just four fundamental requirements that traditional ECM couldn’t: Free and backed up storage space in the cloud; content accessibility from everywhere; ability to share larger files than email could, outside the firewall; and transparent synchronization of content across multiple devices (desktop and mobile). Box, Dropbox, Evernote, OneDrive, GoogleDrive, Picasa, iCloud, etc., all became a thorn on ECM’s side, because users liked the functionality they enjoyed in their personal space, and wanted to bring the same capability to their corporate environment. Now ECM has to step up and deliver that.
  • The “Nightly Update” effect: I have about forty apps on my smart phone, and it seems that at least half of them get updated on a weekly basis. Some, more often than that. Updates just happen, without any involvement from me, without any need for IT support calls, without scheduled downtime, without any need for training. App users are not only looking for the same experience from their Enterprise software, but they are looking for the tools to offer this experience to their own customers. The days of the 18-month deployment cycles are truly over. ECM needs to support similarly fast, agile development cycles and continuous improvement, as apps do.
  • The “Device” conundrum: Vendors can no longer dictate the device that their software will run on. Apps have completely transformed user expectations around being device agnostic: They expect the same App to behave appropriately, whether they are using it on a smart phone, a tablet, a desktop browser, or their hotel room TV. The name of the game is “Responsive Design”, where apps understand what device they are deployed on and adjust according to the operating system, the device format, the interaction capabilities, the connectivity bandwidth, security, etc. Enterprise software has a long way to go before it’s truly device agnostic, and introducing device independence in large suites of functionality, like ECM, does not come cheap.

Impact to ECM Go-to-Market Strategy

Whilst the ECM Engineering teams are grappling with the product design changes forced above, Sales and Marketing also need to completely re-think their approach to the market, in order to move into the Apps market space. Here are some of the key decisions they will need to make:

  • Who is our “App” customer? ECM vendors have to consider two distinct App target audiences. One audience consists of the internal Enterprise users, for whom the ECM vendor will have to provide specific apps and UIs, in order to access the repository and its services. The second audience relates to their client organisations’ own customers. The ECM vendor will either have to supply App development SDKs and tooling for the organization to create their own customer-facing apps, or work with channel partners and integrators to deliver specific vertical line-of-business apps on top of their platform.
  • Who is our buyer? IT is no longer the default target buyer for ECM platforms. The Apps culture has created a whole new set of buyers who are empowered to make purchasing decisions, outside the constraints of IT procurement. Human Resources, Marketing, Operations, Risk Officers, Compliance, etc., all have an expectation to choose their own tools, just as they choose to download a new app on their smart phone. Talking to these new buyers involves learning a whole new set of vocabularies, and a business outcome focused dialogue that does not rely on feature and function details. Few ECM vendors today have the capacity and the vertical domain expertise to carry these business conversations in a credible way. As a result, developing partner ecosystems with the relevant granular domain expertise, has to be a key component of the new go-to-market strategy.
  • How do we license apps? Most ECM vendors, have grown in the era of perpetual, inflexible, buy-once licensing. App users are expecting significantly more flexible licensing terms, which are mostly subscription based. And, while it’s relatively simple to come up with a subscription-based licensing structure, it will still require fundamental changes around invoicing, revenue recognition, renewals, compensation strategy, etc. On top of that, Apps are not designed for the high-value low-volume models that Enterprise software was established on. That model will need to turn on its head, to keep ECM components relatively inexpensive, and finance the product through volume sales.
  • Try-before-you-buy? App users are spoilt for choice: They are used to downloading an app, trying it out, testing it, and if it is perceived as adding value they may decide to license it. ECM vendors need to start offering wider choices, if they are going to compete: Free trial downloads (the Open Source market has a distinct advantage here); more Proof-of-concepts to get users to explore the value and complexity in business terms, Real live pilots that continue into production or can be safely scrapped; Agile development cycles that allow customers to fail often and fail fast.
  • How do we scale down? Traditional ECM markets are all about scalability: ever increasing content, ever increasing user bases, ever increasing processing capacity. Of course you can buy more capacity, more storage, more throughput. Music to our ears. But that is a one-way street, they were never designed to support flexible scaling. The new market models, primarily established by the Cloud providers but also evidenced in Apps, expect the ability to scale up or down on demand. In ECM terms, it’s very unlikely that the content volumes will scale up and down (except in the case of major ROT clean-ups, or periodic Records Management dispositions). But scaling the processing capacity to accommodate seasonal fluctuations, scaling user numbers to accommodate temporary workers and 3rd parties, scaling infrastructure to accommodate migrations, testing and consolidations, are all unpredictable usage-models. How will ECM vendors split their monolithic “All-in-One” pricing, to allow for “Pay-As-You-Use” revenue models? And how will they reconcile traditional investment and R&D budgeting, with unpredictable and varying revenue streams?

Adopting an “Appification” strategy

ECM vendors have some tough decisions to make, if they decide to play in the App economy. They need to decide, strategically, what their end-goal is and decide if this is a viable market model for them.

  • Just because you can, does not mean you should! That’s the first step: Will vendors really commit to moving into the App market, or will they chose to remain a more “traditional” ECM vendor? There is certainly enough market scope for both, at least for the next few years, but the gap will get bigger and the window of opportunity smaller. To borrow a phrase from a colleague of mine: “You cannot be a little bit pregnant”, when it comes to “Appification”. It’s either all-in or all-out.
  • If vendors choose to follow the “Appification” path, which App game do they want to be in? There are three fundamental variants, and they will have to decide which combination they will invest in: App Interfaces, requires them as a vendor to deliver their products to the end-users through apps. That typically means providing access to the ECM platform and functionality through a set of native “App” user interfaces. A lot of ECM vendors already have mobile interfaces to complement their standard desktop UIs. App Solutions, fits vendors that want to target specific with line-of-business apps. Few ECM vendors have been able to play that game successfully. It requires deep investment in vertical or horizontal domain expertise, it creates a very complex maintenance model since they have to keep a large portfolio of Apps in sync with changes to the core platforms, and they are in constant competition with System Integrators and customers’ own IT groups, who think they should have ultimate control of the business users. The final App space is App Tooling. Giving the market the services, development environments, integration capabilities and necessary tooling, to develop their own Apps on top of a core platform. This targets a more modern, microservices-based, component-based, architecture which supports agile development models, but it also creates a whole new ecosystem of buyers, mainly architects and mobile app developers, which does not represent the traditional sales market, or support infrastructure, of ECM vendors.
  • Whichever App game they choose to play, ECM vendors will need to build an ecosystem of App expertise: User Experience designers, solution domain experts, agile developers and project managers, distribution partners, DevOps support, Cloud-first architects, digital marketers, SaaS finance experts, etc. Every segment in the business will need a set of new or complementary skills, and they are not skills that can be learned easily. They will need to be acquired.
  • And the final strategy point is relatively unique to ECM vendors: The information we keep is hardly ever transient. It’s volume driven, regulatory controlled, security-sensitive and persistence-critical. None of these characteristics are native to the world of Apps. Which makes the separation of functional strategy and Information management strategy critical. – Any level of functional innovation provided at the App level, has to remain cognisant of the Information architectures it needs to access, reference and maintain.

Bottom line

There is no doubt that “Appification” is affecting not just ECM vendors but the whole of the Enterprise software market. ECM vendors have a choice: Either they will adopt an App strategy that fits their profile, or they will languish in the ever-decreasing pool of “legacy vendors”.

“Appification” is not a project, it’s a fundamentally different way of software life. The problem however for all of us in the ECM market, is that it’s a new, scary life, and it requires fundamental changes across the whole of the organization: Cultural, financial, and operational. Every department from product design to sales and marketing, to HR, to support, need to take a leap head-first into a massive transformational exercise. How many ECM vendors have the capacity, the investment capital, and are committed to undertake that transformation?

No more “On-premise vs SaaS”, please!

(c) George ParapadakisCall me OCD, if you want, or a pedant: Am I the only one annoyed by the “On-premise vs SaaS” question? It makes as much sense as asking “Indoors vs Credit card”

On-Premise is an architectural deployment decision (On-premise vs. Cloud). It defines where your software would physically be deployed, and the access and connectivity options available to you. It’s a decision that has to be taken in context of the rest of your enterprise architecture landscape and your long-term design strategies.

Software-as-a-Service (SaaS) is a licensing model and, if you are comparing it with anything, it would be with Perpetual Licensing which has been the traditional IT licensing model for many years. This relates to how you are going to pay for using the solution: Pay a large sum (usually) up front as capital expense (Cap-Ex), and you own a perpetual license to access the solution forever. It is then your choice if you also pay and an annual support fee as an Operational Expense(Op-Ex). But the license to use the software is yours forever. Alternatively, in SaaS, you pay a much smaller amount per user/per month (all Op-Ex), which is flexible as your requirements change. In the SaaS model, you don’t actually own any licenses you are effectively “paying rent” only for as long as you are using the solution. This has nothing to do with where the solution is physically deployed.

And just to confuse the definitions even further, SaaS is also sometimes used to refer to the responsibility for administering the systems and supporting the solution. Typically, in a perpetually licensed environment, the license owner is responsible for the administration of the solution (or a third-party, if Application Management has been outsourced). In the SaaS model, the administration burden typically lies with the solution provider, not the organisation paying for the services.

The confusion has come about by the fact that, most commonly, perpetually licensed software tends to be deployed on-premise and managed by the license owner, whereas SaaS software tends to be deployed on cloud and administered by the service provider. But it does not have to be that way: Theoretically at least, there is nothing stopping you from deploying your perpetually licensed software on a private cloud, instead of on-premise. There is also nothing stopping you from negotiating a SaaS payment model with your software vendor, even if the software is deployed on-premise.

So the question of “On-Premise vs SaaS” usually implies: “On-Premise, perpetually licensed, self administered VS Cloud hosted, Pay-as-you-use, provider managed”.

And I’m not even going to start talking about what this implies for private vs public vs hybrid clouds and Single instance vs Multi-tenant architectures, which are also often lumped under the “SaaS” moniker, even though they have nothing to do with SaaS.

I know the differences are semantic but, as Information Management professionals, we have a duty to be clear about the terminology we use. Our clients have more than enough to be confused about, we don’t need to make it any worse.

P.S. As my good friend and fellow pedant, Chris Walker reminded me, the correct term is “On-Premises” not “On-Premise”. He is right of course. There is no excuse for bad English either! 🙂

3 steps to a Compliance Strategy – As valid now, as ever!

3Steps Compliance StrategySome of my old FileNet friends reading this article will smile… I realised today to my surprise, that it’s over 11 years ago that this simple concept was first articulated, and went on to form the basis of our compliance messaging, transitioned into IBM after the acquisition, and was presented in many conferences and briefings. The result of a quick brainstorm before a breakfast briefing for Bearingpoint, at an off-site annual kick-off session, the picture on the left is a scan from my original notebook where it first appeared, in January 2004. I have evidence of this still being included in presentations as late as 2011. In the world of PowerPoint slides, does that make it a classic?

Now, it may be an old message, but it is as valid today as it ever was. And since I’ve never written about it in this blog I thought it was worth re-introducing it to a whole new audience.

What does a company need to do, to be compliant?

There are three very fundamental and very explicit stages for an organisation to achieve a “compliant” status. These apply equally to every vertical industry, be it Banking, Insurance, Telco, Retail, Pharmaceutical, etc. And they also apply equally, if “compliance” refers to regulatory compliance in a Nuclear plant, financial compliance, or Health & Safety at a local school.

Step 1 – The Present: Become compliant

What do you need to do today, to comply with the rules and meet the regulations? What changes in procedure, what risk controls, what equipment checks, what training? This stage includes designing and implementing everything that a company needs to put in place, to be able to certify that today, it is compliant with each regulation the law currently subjects it to. Implementing this stage requires the company to (a) identify and understand which regulations are relevant and what they are expecting (b) identify possible areas and processes where the company is at a risk of not compliant with the regulations, and (c) implementing any changes necessary to remove those compliance risks.

Step 2 – The Future: Remain compliant

This is the part that is often forgotten, and ends up costing organisations millions in fines: Looking at the future. Becoming compliant is not enough, it’s just the first step. As an organisation, you need to ensure that compliance is sustained consistently in the future. That every system, every procedure and every employee remains within the controls and guidelines specified by the legal regulations or the company policies. At a manual level, this involves regular training for employees and regular testing of all the various controls and devices implemented in Step 2. The best way to implement Step 2 however, is automation. Putting in place systems and processes that not only monitor the company’s compliance, but that enforce it. The less a company relies on individual employees to maintain compliance the less likely it is to fall foul of compliance breaches through human error. Automation reduces training requirements, reduces management overheads, and it reduces wasting operational cycles for testing and reporting.

Step 3 – The Past: Demonstrate compliance

The final part of the process is looking at compliance retrospectively: Are you able to go back to a specific point in time, and demonstrate to a regulator, and auditor, or even a customer, that you operated compliantly. Are you able to shoe what decisions were made, what policies were in force, who made the decisions and what information they had available to them to support that decision? This is all about Records Management and audit trails. It’s about maintaining evidence of your compliance that is complete, accurate and irrefutable. Preparing for that retrospective compliance review in the future, should be a core part of the design of any compliance system implemented today.

So the meme Become – Remain – Demonstrate (or even “AchieveSustain – Prove”, as the alternative version that our U.S. marketing folk seemed to favour) summarises the three key steps that you need to remember about structuring a compliance programme. If you are faced with a new regulation, new management, or even a new mandate to create or replace IT systems for compliance, use these three steps to validate if your compliance strategy is complete or not.

The Great Big File Box in the sky – help me out here…

October 20, 2011 4 comments

The internet is buzzing with the success stories of Dropbox.com and Box.net. How much they’ve grown, how much they are worth, who’s likely to buy whom, where does iCloud/iPages come into it, etc., etc.

Am I the only one who doesn’t quite get the point here? Yes, I can see how it makes file sharing easier and how it potentially reduces internal IT costs by outsourcing the management of large volumes of information.

How is this ever a good strategy?

We have spent the last 20 years, trying to educate companies on the need to organise their information rather than just dumping in on shared file drives. Classification, version control, metadata, granular security, records management, etc. Anything to convince users to think a little bit further than just “File, Save As” in order to minimise the junk stored on servers, to maximise the chance of finding information when you need it and maintain some sense of auditability in your operations.

So instead of moving forwards, we’re moving backwards! First Sharepoint and now these wonderful cloud services, allow us to shift our junk from our own fileservers to The Great Big File Box in the sky.  With no plan, no structure, no governance, no strategy, no security model, no version control or audit trail.

How is this ever a good idea? I plead ignorance – please help me understand this…

Did anyone go to an “all you can eat” buffet restaurant and not come out feeling bloated??

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