In the book Built to Last, Jim Collins and Jerry Porras spoke about the “genius of AND”. The basic idea is that companies who define their capabilities or their markets as exclusionary choices are limiting themselves. The real power comes when companies embrace the contradiction inherent in what otherwise might be two opposing concepts. For example, forcing an organization to focus on both flexibility AND speed. Or developing a solution that is both deeply functional AND simple to use. The end result of this kind of focus is inspiration and innovation – a way to meet both needs without sacrificing either one. And when that happens, it’s usually a game changer.
The retail industry is sitting right at the intersection of an enormous number of these contradictions. Retailers must embrace flexibility AND speed, personalized AND cost effective, integrated AND best of breed, unique or differentiated AND easy to maintain. Consumers, of course, are driving the need – they are crashing through channels and exposing all of retailers’ vulnerabilities and expedient choices that have, in the past, sacrificed one opposing force for the other.
The technology industry understands the challenge of managing these contradictions because they are at their own crossroads. Any software company selling on-premise licenses knows the drill: you sell a solution. The retailer implements it, customizing along the way and integrating to other systems (probably point-to-point integration with no hope for upgrades).
Before too long, the cost of implementing an upgrade far overshadows the upgrade’s value and the retailer falls behind, or worse, finds themselves version-locked, unable to upgrade at all. The maintenance payments stop, the retailer’s opinion of the software vendor plummets (even though it was likely the retailer’s own decisions that led to this point), and the next thing you know, the retailer is out evaluating all kinds of solutions for a total replacement – because even to get back on maintenance, that’s essentially the kind of project they’re looking at anyway.
In one sense, all this hype about cloud is solution providers’ attempt to try to avoid this outcome. They argue that the flexibility gained by not customizing and the speed of deployment gained by not having to wrangle a bunch of integration to other systems is worth it. There are some notable fully integrated solutions out there where their business model and their success have historically been built on the idea that the integration is so good, it’s worth giving up some on the functionality. And they’ve made a very fair argument against customization: “I mean, how differentiating is it, really, to have a unique (i.e., custom-developed) accounts payable process?”
What does all this have to do with NetSuite? Easy: they are, like many of their peers, sitting at the center of a lot of different crossroads. To their credit, NetSuite has been busy focusing on a lot of AND’s lately, and it is visibly paying off in their solutions.
For example, on the commerce platform front, NetSuite is very far down the road of having a truly single platform for store and eCommerce, and is easily able to demonstrate some of what this means in terms of customer engagement. Browse online and leave something in your shopping cart – and that becomes an upsell opportunity for the store associate the next time you’re in store, rather than just a retargeting campaign within your browser.
With NetSuite’s acquisition of Bronto Software, the power of a single platform becomes even more interesting – enabling them to soon end the debate of transactional data or non-transactional data as the basis for marketing with AND – retailers should use both at the same time, in line with the customer experience they are trying to create as it is happening.
A lot of the things that NetSuite is doing on the architectural front are designed to replace flexibility orfunctionality with AND – get both, through more sophisticated workflow configuration tools, and a more robust developer partner environment (the SuiteCloud Platform) to make it easy to get “customization” without risking the base implementation – version-lock should be a thing of the past with NetSuite’s cloud solution.
The risk with some of these AND’s is that they come at the expense of others – even in the world of AND, companies need to focus on only a few or risk spreading themselves too thin. With some of these configurators and workflow managers, retailers (especially smaller ones with fewer resources) may find themselves tied to an implementer where they might’ve been able to avoid one in the past.
Certainly among the sessions there was a passion among the customer base to try to figure out things for themselves as much as possible. NetSuite will need to be careful that the complexity that comes with flexibility doesn’t turf out those desiring “simple” instead. Reference implementations and more investment in training resources will help here – things that NetSuite announced at the event.
Finally, as NetSuite pointed out themselves, the company turned 17 this year, the age equivalent of a teenager leaving primary education and home for college life – a tricky time for any teen as they make their last transition from child to adult. NetSuite clearly wants to maintain the image of tech industry rebel and start-up-like innovator. Many of their clients feel the same way – disruptors like Fitbit, Pebble, and even men’s clothier Alton Lane.
But NetSuite also clearly desires to continue to grow upmarket. The retailers who live in that market space have a different tolerance for disruption than their smaller, high-growth peers. Many are too big to be able afford many mistakes. Even as they are disrupted themselves by consumers, what they tend to want more than anything else is stability and security – a sense that the money they’re spending is not a risk, but is helping them mitigate risk.
And, let’s face it, seventeen may be young in human terms, but in tech years it’s old. The challenge for NetSuite will be successfully navigating a path between disruptive AND mature, especially if they want to relate well to retailers with a much lower risk profile than some of the company’s current customers.