April 17, 2012Doug Hadden
Part 1: Public Financial Management focus is marketing, but not spin
Doug Hadden, VP Products
We operate in cynical times. Social media quickly uncovers the truth in marketing spin. It’s got to the point where there is so much marketing hyperbole in the software industry that everyone dials the spin down a few notches. There seems to be an escalating marketing spin arms race. And, the tech media seems to follow company exploits like gossip columnists. I’m not sure what Larry Ellison, Charles Philips, Mark Hurd, Leo Apoteker, Carly Fiorino or Meg Whitman think about all of this. Perhaps they have been hoisted on their own spin petard.
Are we spinning?
We try to differentiate at FreeBalance. I don’t think that’s what we understand as “spin”.
Isn’t this all marketing, really?
Yes. But, not in the “spin” way. Marketing isn’t all “Mad Men.” The experts at Pragmatic Marketing provide an excellent framework to explain marketing. (And, they have some great courses and seminars.)
We used many of these techniques in 2006 during a corporate “pivot” that has resulted in a doubling of revenue and staff. Not in some insidious way – as a framework for re-invention to something that was better as a for profit social enterprise.
Some of our key uses of the Pragmatic Marketing FrameworkTM
Analysis: we discovered that traditional ERP vendors fail often in government financial implementations, particularly in developing countries. (And, custom developed solutions tend to become obsolete fast). We also learned where our processes for customer support were not optimal
Result: improvement of products with Version 7 with more configuration and flexibility to handle changing needs without code customization. Change of processes including FreeBalance International Steering Committee, customer service scorecards, SWAT teams and elimination of barriers from support to product development. The process is now ISO-9001/2008 certified.
Analysis: we discovered that Public Financial Management was our distinctive competence, but that we needed to keep up to date with PFM changes.
Results: more participation in PFM events, seminars and groups to gain more knowledge and to share knowledge.
Analysis: software companies typically own the product roadmap. I’ve often said that the product roadmap is usually: “here’s what you’re going to get and here’s when you’re going to get it. Too bad if it doesn’t meet your needs. By the way, you have to upgrade to the latest version if you want support.” This approach presented problems for government customers. Governments need to budget for upgrades. And, governments operate with different fiscal years.
Results: we changed our roadmap process significantly. Now we produce a roadmap every January that is vetted and changed by our customers. We release products when it is convenient for customer budget cycles, including pre-releasing to some customers. And, we don’t sunset products and longer.
The Pragmatic Marketing FrameworkTM provides most of the tools necessary to fashion a go-to-market strategy. Software vendors in the enterprise of government spaces tend to operate with similar go-to-market strategies. The “distribution strategy”, “product portfolio” and “customer retention” tends to be similar. “Pricing” tends to follow similar patterns. The Framework enabled us to rethink the conventional thinking in software companies resulting in:
- Selecting partners based on government experience and skills rather than size
- Product portfolio tuned for Public Financial Management through the PFM component map
- Customer-centric business model and reorganization (described above) including more participation in implementations to ensure success and the opening of local offices to help sustainability
- Support for the concurrent user pricing model despite the enterprise software trend away from concurrent pricing
This is a good lesson to those companies looking for disruptive competitive advantage in markets. As I’ve written before, innovation favours the agile.
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