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Monday, December 13, 2010

The pros and cons of being an IT early adopter

One of the trickiest issues faced by a company about to select a new business software (HR or otherwise) is the early-adopter dilemma. Imagine that you have a favorable view of your IT vendor, probably because of a long association or due to a great rapport with your account manager whom you have come to trust over the years. When a new need emerges (say, you are expanding into a new country and need to manage and pay the local workforce) you naturally turn to your vendor who had already provided you with a payroll engine and the "legs and regs" (local rules in our HR tech jargon) for your home country.

Like all IT vendors, yours will tell you through an enthusiastic sales rep, "no problem, can do." Except that there is a little snag: that local payroll is still being developed (if work has started on it at all) and there is no customer live...yet! Actually they are offering you the great honor of being the first customer, or "early adopter" in softspeak. In plain English, they want you to be their guinea pig.

If you have followed a  strict software-selection methodology (such as the one I advocate) you'll probably pause for thought: Shall I do this? Can I trust them? If nobody's bought it yet, or they haven't developed it, maybe there is a good reason for it. This is not an academic question: Oracle, to take one example, developed in the early 2000's a French payroll and failed to get a first customer to use it since the market had serious doubts about the quality of the product. Not even Oracle France was willing to "eat their own dog food" as the phrase goes!

The above are all valid questions and don't let your account manager brush them off as if they were insignificant specks of dust. Not weighed carefully, these issues may well make all the difference between success and failure in your software project.

If you've had a long association with the vendor and like your account manager, shouldn't this be enough? These are helpful points but should not sway you unduly: after all, the account manager can leave the next day and be replaced by an indifferent or incompetent executive. (That is if they are replaced at all - I've seen customers left with nobody to manage the relationship for years!) And just because your vendor was good at one offering is no guarantee that they will be good at another one: many recruitment vendors have lousy learning features and vice versa.

On the plus side, there is one key advantage which the vendor's sales rep will probably be trumpeting high and low: as a first customer, you get to drive the direction of the product, ensuring your needs are covered. "Your requirements, your whole  requirements, nothing but your requirements," your account manager will be waxing lyrical (and commercial.) And who can deny the appeal of having a customized product built as a package system? Doesn't it sound like the best of both worlds?

Maybe, unless the vendor is less than forthcoming with you and is using you just to test the waters. You need to be convinced that after the initial release the product will not be shelved, as it has happened with several products under so-called "controlled availability." Sure, there is no guarantee of eternity in the IT industry (just ask PeopleSoft customers), but you need to factor that in as part of your due diligence. In particular make sure that the vendor has done their market research adequately and that they're in it for the long haul so that, should the first customers trickle in at a snail's pace, the vendor will still stick by the product and not fold it after a couple of disappointing sales quarters.

One thing to check is the vendor's historical credibility. Are they close to their customers? Have they consistently developed according to plan ("the roadmap" in our lingo.) Is this new product of theirs a key area for which you can expect them to make every effort to be successful, or is it just one among a huge portfolio? If the latter, then the risks are definitely higher. And look at yourself in the vendor's larger business scheme of things: are you a major customer? You don't have to be  a global one, but be clear eyed as to the place you occupy in your industry or geography. To remain with another example of a French payroll (successful this time), are you like Société Générale, a major company, in a  major industry in a  major market? If yes, then chances are that the vendor (in this case it was PeopleSoft and the first country extension of their new Global Payroll) will go to great lengths to deliver as promised. (For how to deal with a software vendor bent on reneging on their commitments - apologies for hawking my book - you may find useful Chapter 7 "Going 'Glocal' " of  High-Tech Planet: Secrets of an IT Road Warrior, on the politics of arm-twisting to get what, after all, you've been promised and have already paid for handsomely.)

Another criterion you may want to take into account is the fact that there is a difference between being asked to be a guinea pig for for a new product covering a mature function (such as the abovementioned payroll) and one which deals with a newish area, such as onboarding.  In the former case, the market requirements are generally well-understood and the only doubts are about the vendor's ability to translate them into bytes and pixels. In the latter, the risks are multiplied by the still fuzzy understanding of what will be automated. In particular, pay attention to the internal resources the vendor is committing to the product.

Although personally I don't believe in the concept of co-development between a vendor and a customer (there should be only one development organization, and its place is within a vendor's walls since that's their business) you as a customer should be quite vigilant about what goes on within those walls. Otherwise you may come to regret having traded the peace of a "laggard" for the excitement of an early adopter. The software graveyard is littered with the bodies of early adopters who ended up being the only adopter.

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