What does strategy have to do with buying business software?

i came across a very interesting article by daniel rasmus , which was in turn was inspired by an article by doug henschen late last year. the article talks how more and more business intelligence vendors are adding collaborative capabilities to their suites. multiple players have tried to do this, including microsoft with sharepoint, sap with streamworks and ibm with cognos 10.

while it’s always good to have a few extra features in your software, things start getting a little confused when your crm provider also includes email, your email application also includes shared folders , your collaboration vendor throws in light weight reporting and business intelligence tools, and your accounting system suddenly goes “social”.

it is understandable why vendors want to do this – the cloud deployment model offers a great opportunity to blur traditional software boundaries, enter high demand markets (is it a wonder that everyone is clamoring to enter the collaboration market), and make the user more committed to your solution.

but from an organization’s standpoint, solutions with overlapping functionality create a great temptation to use the tool immediately available to manage data (for example store an invoice in the “shared folders” section of your accounting system) and as a result fragmenting corporate data, and creating scores of mini information silos. as an organization increases in size, this potential for fragmentation grows exponentially.

companies therefore need to take a careful look at their application portfolio, and decide exactly how they distinguish software categories, exactly what they want from each software category and how they will interact – erp, crm, collaboration, social. special attention might be necessary in the area of collaboration, since it can have such a far reaching impact on organizational performance. conceptual models might be of help here. for example i had proposed a model about how “social software” can best enter the enterprise .

daniel rasmus has the following incredible suggestions about how to see collaboration software in the organization (we suggest a similar approach : whitepaper – collaboration or chaos ).

focus on deploying a set of collaboration tools that connect with other technology, not collaboration tools within other technologies. people only have so much time, and there are personal switching costs involved in deciding which tool to use to share something. there are also costs involved in remember where you shared something, or even in remember to check various locations to see if people have shared something you need to know about.

the best implementations of collaboration software should have a single interface that brings everything together for the end user, and makes the same conversations available on mobile devices that are accessible on larger clients.

but all of this goes to strongly underline one thing – the importance of a strategic, long term view while selecting your company’s software.