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October 02, 2002) - The enterprise software business is about partnership, not tools. Small and medium sized operations are not usually able to afford the costs of a firm that delivers relationships, so they buy tools. Enterprises (large companies) want far more than tools, they want and need the various bits and pieces that constitute partnership.

At its simplest, partnership is the willingness and ability to understand the world from the customer's perspective. Collaboration, a prime symptom of partnership, happens when a vendor understands a customer so well that the two become better at the customer's job than either one could be alone. Innovation, the deep promise of partnership, happens when the collaboration begins to make the impossible possible.

Peoplesoft, in its early years, ceded all of its relationship business to external vendors (the Big 5 consulting firms). As a result, customers bonded with the people who delivered relationships. Peoplesoft became a tool supplier to their distribution channel and lost the ability to control or predict their revenue and profitability. Like all relationships with distribution channels, things work great until times get tough. In the big company consulting downturn (related to Y2K and web consulting in 1999), Peoplesoft got caught in a squeeze that cost it market share, revenue (their first layoffs) and customer satisfaction. The fact that their current offering is years behind the market and fundamentally inoperative can be traced to the failure to develop a relationship business.

Peoplesoft is hardly alone. Any software company that sees itself as a tools provider is doomed to the same fate.

Building a relationship company requires the following things, in addition to up to date software and a coherent plan to manage its configuration as the company grows.

The key to any relationship is the amount of value that you deliver. While it is important to be well liked, a partnership is rooted in the customer's needs on a business, not personal level. It is simply impossible to solve a certain range of problems without industry expertise and clear examples of success. 

Service Ethic
Any company with long term hopes in our business must understand who the customer is and who the customer is not. Technical arrogance, the hallmark of firms claiming to have "the" answer, has no place in a long term service relationship. Good service demands a fundamental level of deference for the customer regardless of the answer to the customer's competence question. Even idiots can be customers. Service, in those cases, while challenging, can be easily accomplished without allowing the relationship to deteriorate to a peer to peer level. Smug knowledge of superiority is guarantee of bad service. We think the answer can be formulated as "we are personally responsible for our customer's success." 

It is amazing how overlooked basic manners are in Enterprise settings. The reason that enterprise partners are paid in money is because they are guests in the customer's company. Knowing how to get work done while acting like a well mannered guest who is liable to be invited back is the challenging line required by a partnership between a vendor and a customer. Good partners hold doors, get coffee, clean up after themselves and others, start from the assumption that the host is right in his house and the dozen or so other things you were taught about being a good and productive guest.

It's easy to win a proposal. It's easy to deliver a 'one size fits all' product. It's hard to understand a foreign culture while working to improve it. It's hard to own the places where your product doesn't work, fit or perform appropriately. It's hard to take a customers side as an advocate in your company's internal politics. Great partners know how to manage these dynamics and deliver better service because their commitment is to the customer first and foremost.

Finally, a good partner has to have the raw capability to deliver on its promises. As we've been seeing, this is often a question of capital and its availability. As our recession stretches on, more and more companies are winnowing their teams beyond the point that the capability remains intact. As a foundation for engagement, any potential partner should be queried about current finances, made to commit about priorities in downturns, and interrogated about the impact of growth on service delivery. Although a good account manager can effectively manage the relationship for the first four variables, the company's capabilities are the real issue.

We were inspired to detail these attributes by the following piece from hcm.blogspot.com

Hank Stringer is a partner. Somebody that's been there and done that. He gets it! BrassRing should be getting it by now as they have been around forever. Oracle put a high priced suit up on the stage and it sounded good, but I'd be surprised if the credentials of the entire Oracle team were half of those of Hank and his team at Hire.com. ...Said it before and I'll say it again, if you don't have a passion for this industry GET OUT! It's too important, hard and confusing to be anything less than passionate about it.

-John Sumser

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Materials written by John Sumser © TwoColorHat. All Rights Reserved.
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