A new mindset: Consumerization and enterprise software

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Enterprise applications haven't innovated as much as their consumer counterparts. Employee expectations based on consumer tech experiences are going to change that.

During the last decade, by the time 2010 rolled around, one of the main forces behind consumerization in the enterprise appeared: Consumers overtook businesses as the main buyers of technology. Businesses had traditionally held that distinction, and in advance of further technological disruption to come, the rules began to change.

Enterprise software used to be a phenomenon of business, for business and by business. Providers sold to important decision makers and department heads in the corporate hierarchy and software design reflected that reality; the user experience, how employees would interact with these applications, was not a main driver in the market.

Take CRM software as an example. I have seen enough statements in my review for this article to be convinced that a great many sales reps hate Saleforce. Surprise -- it was designed to make the manager's job easier, not the reps'.

At the beginning of 2015, no one in the enterprise software business, whether a legacy company or a SaaS startup, can afford to ignore consumerization. The cloud and the SaaS delivery model were major innovations in enterprise software. But there were few changes in the software itself. It continued to resemble the unengaging products of yesteryear that employees had to use. However, with the amount of choice in the consumer technology market these days, and the expectations around ease-of-use and acquisition that the market is creating in the minds of consumers -- and by extension, employees -- the disruption caused by consumerization is not leaving the enterprise market untouched.

An abundance of IT options

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The consumer technology market has given rise to the "bring you own" movement in business: bring your own device, bring your own application, even bring your own technology. Managers, schooled in the, shall we say, old-school methods of central IT and corporate control, find consumer tech disruption a bit unsettling. The security concerns are very real -- stolen mobile devices, hacked networks, breaches of proprietary data.

But there's an app for just about everything these days, and a great many of them are good enough for solving business problems. And they are just a mouse click and credit card swipe away. A new mindset in businesses is at play: Employees have an abundance of IT options at their disposal, and their actions are having a real effect on enterprise IT. They are, as a technology-empowered group, able to make decisions that only managers were once able to make.

Shadow IT is real, and many CIOs are under pressure to address its problems and changes. But consumerization is here to stay and is going to change the way work gets done and how enterprise applications are designed. This article reviews several informative articles and reports over the last few years, to highlight what forces are shaping consumerization in the enterprise. A new mindset requires new models and approaches. Let's start with what the definition of consumerization is.

Definition: The impact of expectations

In its March 2014 Consumerization of IT in the Enterprise Study, IDG defined consumerization as:

"The propensity for users' experiences with technology as consumers to impact their expectations regarding their technology experiences at work. Unlike in the past, new information technologies are increasingly emerging in the consumer market first and then spreading to business organizations."

Techopedia added to its own definition, shedding light on the new business mindset:

"The consumerization of IT reflects a larger shift in corporate philosophy, where companies traditionally maintained full control over their employees in terms of policies, benefits and behavior. In recent years, companies have allowed more flexible work arrangements and turned the management of retirement plans, for example, over to employees. BYOT (bring your own technology) is part of this shift as well, as employees demand and are granted the ability to work with devices of their choosing."

Consumerization is accelerating and changing enterprise tech

In a 2012 article, Uzi Shmilovici identified three key paradigm shifts that are accelerating the consumerization of business software:

  • The devices we use: People naturally want to use the devices they have outside work in their work as well. Companies are compelled to support BYOD, or in some cases even provide devices. "That's why SAP's CIO purchased 40,000 iPads. It is a bottom-up decision made by the employees and not the CIO."
  • The way we work: "Sure, you can use that overly complex enterprise storage server with four levels of authentication. Or not." Employees are opting not to -- shadow IT -- and CIOs aren't happy that data isn't centralized anymore. But enterprise startups are now offering enterprise accounts that can work beyond teams and individuals -- something to help the CIO sleep at night.
  • The way we interact with software: It's not really fun to use next-gen apps outside of work and then be required to use clunky business applications once you get there. "We're seeing use cases in which people use consumer apps or new generation business apps for their daily needs and then dump data into bloated enterprise software on a monthly basis because they have to." Because they have to -- which is going to pave the way for better user experiences in enterprise software.

Shmilovici also predicted three ways that consumerization will change business computing:

  • A new class of enterprise software: This new class is emerging with development costs down and increasing demand for better user experience. "With a strong focus on user experience and on making the software useful for the users themselves and not only to their managers, this type of software accelerates adoption and provides 10X the value for a fraction of the cost."
  • Dramatic shift in discovery channels: Employees find new apps the same way everyone else does: organic search, social media, and app stores with peer recommendations. These have done away with committees and trade magazines. "The employees bring their apps and collaboration tools from home and effectively make the decision for the enterprise."
  • Failure of traditional vendors to adopt: "Don't want to name names but it is absolutely insane that most of the traditional vendors failed to put together good mobile apps." The handwriting is on the wall for all to see.

The new enterprise disruptor

In an article for our sister site ZDNet, Dion Hinchcliffe wrote that consumerization goes beyond new hardware, applications, and platforms. It is about a new mindset: "one where users tend to lead the IT charge." Users have the technology needs, the resources, and the urgency to find solutions, more than the IT department.

"It creates a widening chasm between what's readily possible and what centrally managed organizations can achieve on their own. I've been arguing for decentralization of IT for some years now but I didn't quite expect it to take this turn, in that I expected IT leaders to see the writing on the wall and actively create programs to move IT selection and innovation closer to the ground, so that more choice and options were available. I'm now seeing that the consumerization tidal wave is actually being actively disruptive to IT, who is largely going along with it because they can't stop it."

According to Hinchcliffe, consumer IT is disruptive in the enterprise due to several key factors:

  • Almost zero barrier to acquire: A few minutes of research, several mouse clicks, and a credit card. Boom. As opposed to the slower, official IT procurement process. In 2012, Hinchcliffe put his support behind enterprise app stores as a way to counter the dangers of shadow IT, and this idea has since been gaining traction.
  • Easiest to use: Simply put, consumer IT has to impress and even delight. Traditionally, enterprise IT has not. In the past, managers decided which applications would be used, and user experience was not a priority. Consumer IT is disruptive because it is designed around the user experience.
  • More advanced and innovative: The "capability gap" is widening. Consumer app developers are racing to use cutting-edge technologies, while traditional enterprise vendors are "turning out relatively uninspired mobile versions of their apps and generally not taking advantage of the intrinsic power and innovation inherent in iOS and Android platforms and compatible devices."

IDG: Demand for next-generation applications

According to the IDG survey, respondents indicated that their organizations are moving beyond common "early-adoption" applications to CRM and ERP, and 55% said that consumerization trends are increasing demand for new apps from both enterprise users and customers. But this is not easily done: Just under one-third indicated that is extremely or very challenging to make document management, business intelligence, and CRM apps available on consumer devices.

A major consumerized tech trend, the Internet of Things, also had the attention of IDG survey respondents; 57% said they expect it to have a moderate to significant impact on business computing. Consumerization is driving adoption of related technologies as well. 60% said consumerization would boost the use of cloud computing in their organizations, and roughly half said they anticipate the same result with web applications, mashups, and social media.

Rebooting the enterprise user experience

Just how powerful are employee expectations in the wake of consumerization? In October 2014 Tikue Anazodo put it bluntly:

"Employees have realized that software doesn't have to suck. They have realized that software doesn't have to be unnecessarily clunky and slow. They have realized that real-time social components that help streamline P2P communication can be built into any application. They have realized that software doesn't have to be confined to a desktop computer, and that in fact software can move around with them on any device they own. They are aware of all this because the consumer applications that they spend most of their free time on are clean, intuitive, collaborative and portable."

According to Anazodo, any new SaaS vendors are building user experiences that are on level with those of consumer tech vendors and are focusing on the following key pieces:

  • Mobile UX (user experience): There are more than three billion connected mobile devices in the world. The typical enterprise employee owns at least one, and mobile sales are outstripping those of other devices. With six billion connected mobile devices expected by 2020, "modern enterprise software needs to move with employees on the mobile devices that they spend the majority of their time on."
  • Collaboration: The most important employee workflows in an organization include collaboration. "Collaboration in modern enterprise tools needs to be seamless and as close to real-time as possible."
  • Optimizing user workflows: Next-generation enterprise providers are taking a hard look at how to reduce the time and effort needed to carry out tasks with their applications. Think quality, not quantity: "It is no longer all about the number of tasks a user can perform with a specific tool, there is now a lot of thought being put into how quickly and efficiently an employee can perform tasks using said tool."

Rising expectations: The baseline has shifted

David Skok wrote at the end of 2014 that the enterprise is in "Phase 2 of consumerization." In the first phase, workers brought their mobile devices to work and expected corporate access through them. Then consumer developers began to push the user experience envelope in mobile apps, and this is becoming the new expected normal in the workplace:

"Consumers used to say, 'I'll deal with whatever system you give me,' then they said, 'I'll bring a better system, just support it,' now they're saying 'I expect a system that enables a better way of working, deliver it.' The baseline expectation has shifted, and this has been led by an increasing number of experiences in their personal lives becoming easier and better."

If businesses have not realized that their customers expect first-rate digital experiences, they will have to very soon. Nor can they afford to ignore their employees' expectations of apps and software. Tech-literate staff members don't want a daily dose of painful, frustrating enterprise apps; they now know there's a better way. But many enterprise vendors have yet to catch up.

Skok said that innovative SaaS providers are going beyond cosmetic changes and are "focusing on rewriting mundane, inefficient, time-wasting tasks, and poor communications between different parties that need to work together." His poster child for this movement is Hubspot's Sidekick sales app. Designed around making the sales rep's job more efficient, it conducts research into a prospect, automates data entry into CRM, and checks to see who from the client firm has spoken the prospect (unlike the aforementioned Salesforce...).

Revolution from the bottom up

Enterprise application vendors have been slow to respond to the forces of consumerization, which is perhaps not surprising. Deep organizational change is not an easy thing to do for large established companies. The SAPs and the Salesforces of the world of enterprise software got into the game in previous decades and under old rules -- before anyone had heard of the cloud, software as a service, or consumerization in the enterprise -- and before employees had a real say concerning software design.

We are now several years into the changes in the enterprise wrought by consumerized tech, and 2014 seems to have been the year when things began to rumble. 2015 and beyond portend even more exciting changes. As far as bona fide innovation in enterprise apps goes, I'll be paying attention to SaaS startups. That's not to say established vendors won't innovate and acquire effective next-generation technologies. But they have the weight of institutional inertia working against them.

Consumerization in the enterprise is truly a revolution. It is flowing out from changes in technologies percolating into businesses and changes in how employees see their work and the new possibilities that exist. You can't stop it: Technological innovation has put real power into the hands of workers in the 21st century, and the innovations both in enterprise software and the whole culture of business will be profound. It is a revolution set on a solid basis. The front-line employee now has the means to solve problems with newer and better applications and the opportunity to freely acquire them. This may be a watershed moment -- only time will tell -- because in just a matter of years the way we work in all kinds of organizations could undergo a digital transformation.

Dropping names

Interested in a mini who's-who of next-gen applications? In addition to Sidekick, these firms and platforms got notable mentions in my review for this article:

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