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Why is a Software Company Talking About Organizational Change?


February 10, 2014

And, Sustainable Public Financial Management (PFM) reform?

Doug Hadden, VP Products

By most people's measure, FreeBalance is a software company. We build budget, financial and HR software for governments. Some would say that we're in the general 'ERP' category although we don't build software for the private sector. So why are we focusing on solutions for organization change at our annual conference?

(I follow the themes from ERP company conferences. The main theme: we're the best. The message:  buy more software.)

Power Shift to Customers

The software industry has evolved through short acronym eras. Innovative new software is introduced that defies current categories. Experts and analysts see the trend and define new categories. We've seen the recent rise of 'augmented reality', 'collaborative commerce', 'Internet of things', 'consumerization of IT' and 'big data' among others. The underlying theme to many of these new technologies: customer empowerment.

That is: the empowerment of consumer and business customers in the commercial and government relationships.

Don't be fooled by how new technology is leveraged by providers of products and services. This is a temporary stage, a pattern common to digitization. (For example, the music industry made huge profits by digitizing analog music for CDs. Look at what has happened since.)

The Complete Solution Set

Companies define their categories. It becomes a mindset. The definition of categories can be very narrow. (For example, most software companies try to reduce services revenue as a ratio of overall turnover. And, companies find international expansion difficult when defined categories make no sense globally.)

The customer problem with 'categories' is that they are required to integrate product and services sets to arrive at solutions. Many high technology firms are so obsessed with optimizing categories that they fail to realize how products are really being used – the problems being solved, and the burden to make all this happen.

Customers are looking for comprehensive solution sets. (Any software company struggling to be a "product company" doesn't get the new dynamic.

The Governance Problem

FreeBalance builds software. The sea change at FreeBalance occurred when we realized that our business wasn't software: it was enabling country growth through sustainable reform. Software is one cog in the solution to the governance problem of how to sequence reform based in the country context. The design of the FreeBalance Accountability Suite enables progressive activation. But, governments need to know what processes should be modernized, in what order, and how to help the public service adapt.

Organizational change management is critical to PFM reform. That's why we're talking about it. And, why we brought in international experts to provide context. And, why we've added internal expertise and partnered with firms who specialize in organizational change in government. And, why we're running workshops on the subject so customers can share good practices.

(Subjects include capacity building, security and reputation, change and project management, impact of post 2015 MDGs, transparency and open government.)

Customer-Centric Implications

This was our 8th FreeBalance International Steering Committee (FISC), our 3rd Minister's Roundtable and the first Host Country Workshop. FISC has evolved over the years from a conference focused on resetting our product roadmap to one focused on sharing good practices. The customers still reset our roadmap. (I know of no other company that does this.)

The challenge for us is to keep our ears open this week to better understand the customer context. To talk less about ourselves – to talk less in general – which is hard to do when you're excited about what you're doing.

That's our organizational change challenge.

Listening is one thing – analyzing the other. Our PFM focus facilitates analysis on one hand, but can limit thinking on the other because there is a lot of orthodoxy in the domain.

This is the real challenge for customer-centricity: corporate hubris. Thinking that you know more than your customers.

Session Related to Change Management

We blogged and tweeted during FISC. Some sessions related to organizational change included:




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Doug Hadden

Doug Hadden

Executive Vice President, Innovation at FreeBalance
Doug is responsible for identifying new global markets, new technologies and trends, and new and enhanced internal processes. Doug leads a cross-functional international team that is responsible for developing product prototypes and innovative go-to-market strategies.

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