Part 1 of this blog series talked about my very first attendance of BigIdeas, BigMachines’ annual user conference that takes place in the fall in Chicago. I wasn’t the only one that attended BigIdeas 2011 for the first time, as in May 2011 the company’s financial backers brought in David Bonnette, a seasoned Oracle executive in the customer relationship management (CRM) realm, as the new president. Mr. Bonnette has since gradually replaced the company’s founder and former CEO Godard Abel.
The highlights of Bonnette’s keynote presentation were that BigMachines has recently moved towards acting as an established company with more structured processes rather than as a slightly disorganized rapidly growing startup. Predictable results for both the vendor and its customers should come from more simplified and prepackaged offerings, and the upcoming BigMachines 12 release was previewed.
Partners Presence Confirm BigMachines’ Clout
Another impressive fact about BigMachines is its extensive partner ecosystem, which is unmatched by its CPQ competitors, not even by the venerable Cincom Systems (see TEC’s recent article entitled “Reconnecting with Cincom Systems “). Indeed, it is astonishing to see archrivals such as Oracle, IBM (Cast Iron), and salesforce.com sponsoring an event of a vendor of BigMachines’ size. Okta, PROS Pricing, Vendavo, Xactly Corporation, Channelinsight, InsideView Technologies, Accenture, DocuSign, Pierce Washington, EDL Consulting, Lumo Graphics, and Cloud9 were other sponsors and exhibitors.
It was a bit surprising not to see Microstrategy and Right90 at this event, given established alliances, while the Microsoft Dynamics CRM partnership is still budding. The only apparent non-show was SAP, where Cincom Acquire, Configure One, and Cameleon Software for now seem to have the upper hand.
About 70 percent of BigMachines customers are salesforce.com’s customers too, while Oracle CRM On Demand customers account for about 10 percent. With Oracle, the alliance is more of a co-opetition, in light of Oracle having four sales/product configurator products: in Oracle E-Business Suite (EBS), Oracle JD Edwards EnterpriseOne, Siebel CRM, and Agile PLM.
Oracle and salesforce.com even had back-to-back keynote presentations on the second day of the event. Somewhat surprisingly, there was no competitive banter a la Ellison-Benioff, and both partners concur about the difficult times for sales teams and how cloud-based social tools might come in handy to overcome today’s hurdles.
Justin Shriber, Regional VP, Oracle SaaS Applications Group, said that historically S&P 500 companies have missed their numbers 81 percent of the time. Ironically, today’s sales teams may be stumbling now due to the once winning strategies of the past. Surveys show that 89 percent of sales personnel are not coached (but rather thrown into a deep end to sell) with a resulting 85 percent/25 percent marketing leads vs. sales leads ratio, and the average tenure of sales executives being shorter than two years.
Insightful sales leaders understand that sales organizations built during boom times often break and become a bottleneck when the economy stalls. More importantly, they know how to retool their teams to achieve sustained growth. These leaders teach the following three important lessons (borrowed from professional sports) that allow sales to deliver strong results even when times are tough:
To explain the latter issue, a sales department is again the bottleneck in tough times. In good times when demand is abundant, the bottlenecks are rather product development and customer service departments (as supply is chasing heavy demand), and some compartmentalization (“not my job description” attitudes) can be justified so that these departments can focus on their competencies. But in tough economy, other departments need to help the sales folks’ efforts.
Social Intelligence’s Importance
Thus, enterprise-wide performance management, inter-departmental integration, and collaboration in an enterprise are critical, according to both Justin Shriber and Peter Gaylord, Director of Product Marketing of Sales Cloud at salesforce.com. Not surprisingly, both have touted and demoed their respective social tools as possible enablers: the recently released Oracle Social Network (formerly Webcenter 2.0) and salesforce.com’s Social Enterprise portfolio (revolving around the Salesforce Chatter’s social platform and a number of other recently acquired tools).
InsideView’s breakout session explained how social media is changing how customers interact with enterprises and how they buy today. A vast majority (92 percent) of customers will not return unsolicited cold calls and emails, and 70 percent of consumer initial research on products is now done in social media. Customers’ social media conversations with peers are creating so called Big Data – a concoction of both structured data and unstructured content. For marketing and sales reps, making sense of all of this data can be overwhelming.
Best-in-class sales persons use sales intelligence based on aggregate data from a host of social sources. To that end, InsideView provides subscription-based software that monitors, aggregates, and analyzes digital and social networking content and extracts relevant prospective contacts or company information for generating sales leads. This process in which InsideView goes well beyond providing mere contact info (which one can find in former Jigsaw, now Data.com, or NetProspex), is referred to as “social selling.”
BigMachines’ Leaders Speak Out
Towards the end of the event I had the chance to meet with David Bonnette, BigMachines’ newly inaugurated president, and Will Wiegler, VP of Marketing. My provocative questions and their frank answers were as follows:
PJ: What is your exit strategy? Is configure price quote (CPQ)/quote to order (Q2O) sustainable as a standalone market in light of recent acquisitions in your space (most recently Webcom by Callidus Software)?
DB: Given that I have just started at the company, we are not yet thinking about the end game for BigMachines, and I will rather talk about our growth strategy. The main pillar of our projected stellar growth for next couple of years is to do more in the CPQ market in terms of selling to new customers and new industries. There is still plenty of arable land in this space, and we are the leader: our revenues equal the combined revenues of our competitors. Also, we currently have the following three engines – (direct) sales, channel, and e-commerce – and there are abundant cross-selling opportunities to existing customers as well.
Over time, we plan to broaden our functional footprint by enabling customers to further generate and protect their revenue. The latter aspect can be done by contract management, asset-based renewals management, upgrades, etc. Many issues and considerations take place in sales and engineering departments before the configuration and quoting take place. For now, we will develop those adjacent functionalities internally, but you can never know whether, say, in two years time our approach to acquisitions might change.
PJ: What about the true multi-tenant software as a service (SaaS) discussion? How does your repeatability theme jive with your customized UI practice?
DB: Our competitors have long portrayed as negative the fact that our customers have customized their user interfaces (UI) and the system in general (and thus are not all on the same latest release). Our recent meteoric growth might indicate that their negative campaigns are not really resonating with the prospective customers. In fact, true multi-tenancy and being on the latest release mantras do not really resonate with many customers, and it is rather beneficial to the vendor for the economy of scale R&D and support reason.
WW: If anything, many of our customers prefer to be on their own schedule with regards to when they are ready to migrate, plus, they like the flexibility to tweak their client side. Having said that, going forward, in line with our predictability and repeatability mantra, we will strive for fewer customers’ customizations and for more of them being on the latest product release. But we don’t foresee every customer to be in a one-size-fits-all setup (with everybody being on the same automatically updated release) for some time to come.
PJ: How is the novel QuickConfig multi-tenant offering, which was introduced in late 2010 (see the related blog post) doing?
WW: The prepackaged and simplified configurator product on salesforce.com’s Force.com platform (with no other modules such as our extensive admin tools and rules engine/repository) is very nascent, but we have recently had a few go live customers. Stay tuned for more information and updates.
PJ: Your partner ecosystem is impressive, but what about the formal SAP relationship and certification?
WW: We do have a relationship with SAP and some SAP resellers (e.g., Espline), but not nearly as close and strategic as with salesforce.com and Oracle. Getting more strategic and closer with Microsoft Dynamics CRM is on our to-do list for next year, while a strategic partnership with SAP is not yet being sought by our customers.
Let me point out here that we have a number of integrations to other enterprise resource planning (ERP) systems beside SAP and with no customer relationship management (CRM) integration at all, due to BigMachines’ ability to go standalone. When and if our customers require some pre-packaged and certified integration to a particular product (via their Big Idea voting mechanism) we will act on it.
PJ: What do you plan to do differently and better than your predecessor?
DB: First of all, let me reiterate that my predecessor and the company co-founder is still involved with the company as an advisor, and our new directions have gotten his blessing. It is just that BigMachines is taking another step in its corporate evolution from a startup to an established company.
For one, we are instituting corporate-wide process changes in line with how an established company runs its processes, from recruiting new employees to reporting our taxes. Second, the changes will come in terms of predictable outcomes for all of the constituents: BigMachines, our customers and our partners. Based on early adopters’ experiences, standardized products and best practices will simplify CPQ complexity as it has already happened in the realms of ERP and CRM.
PJ: Why do CPQ projects, independent of vendor, sometimes last for months (if not years)? In particular, why have some BigMachines implementations gone badly in the past: for being oversold and/or the lack of good implementers (due to high growth and supply chasing demand)?
DB: One should understand that, even though not as broad and complex as ERP or CRM scopes and processes, CPQ processes are still complex. There is plenty of forethought required in devising product lines, variants, rules as well as quoting and selling process proposal generation and approval steps.
For our part, BigMachines might have had some protracted implementations for all of the aforementioned reasons as well as for early adopters over-customizing their systems (which makes difficult for them to migrate to the latest release that now natively provides functionality that they have had to customize the system for). Still, our longest implementations do not exceed the six to nine months time frames.
WW: With our decade long experience at hundreds of customers we have been developing best practices and industry frameworks for more rapid user adoption, sometimes measured in weeks. We strive to make our CPQ system as easy as Facebook, which actually was how one customer (TE Connectivity, formerly Tyco Electronics) described the use of BigMachines by its users. We will question customers’ need to customize the system and try to wean them off those bad habits bearing in mind that some customization might always be necessary.
ChicagoBusiness.com’s recent blog post may shed more light on Bonnette’s vision. Dear readers, what are your comments, thoughts, suggestions or individual experiences with BigMachines’ Q2O and CPQ workflow-based engines?
What do you think of the company’s strategy and related moves, and do you think that the CPQ software market is sustainable in the long run? Generally speaking, how do you handle your sales processes (manually, in an automated way, somewhere in-between) and what percentage of your products and services are configurable?