Best of Breed—It’s a Matter of Strategy

In my last article “CRM in 2020 – The Suite Versus Best-of-Breed“, I discussed the battle between the “suite” approach to software production and sales, versus best-of-breed. Best-of-breed has come about through the advancement of APIs so that customers can now have the best possible software for all their various company functions, all connected through an API. There is no longer a need for the “suite” approach, which consists of several different applications all developed by the same company; they can’t all possibly be as good as each of their relative competitors.

As a developer, one problem with the “suite” approach is that you lose focus. I believe that focus is the core of everything, and focus is something possessed by a best-of-breed developer.

The Heuristic Approach

Since I’m going to use a word, “heuristic,” that some readers might not be familiar with, I’d better define it. According to the Random House Unabridged Dictionary, the word means “pertaining to a trial and error method of problem-solving used when an algorithmic approach—a set of rules for solving a problem in a finite number of steps—is impractical.”

An algorithm allows you to make discoveries that are known beforehand, whereas the heuristic approach allows you to make discoveries that are not yet known; the location of “moving targets.”

Chess players have found a fundamental difference between the heuristic and algorithmic approaches. It is possible to play chess with an algorithmic approach, but there is no guarantee of winning. But the heuristic approach allows you to truly master a situation—and win.

The heuristic view is more of an evolutionary approach to strategy and programming. It is used in specialization, which is best-of-breed, and that specialization needs to be built into corporate strategy.

Strategic Errors

We know from history that when a company discovers an error in its strategy, it’s usually too late. This is because of the fundamental difference between strategic management and operational, or day-to-day management. Operational management can make changes on the fly, but the strategy is utilized over long periods, usually years. It cannot be changed overnight. A prime example is Kodak, who discovered that they should not have clung so tightly to the film model of photography in the face of the digital photography explosion.

At Pipeliner CRM, we know this all too well. We made a strategic decision 10 years ago to utilize Adobe Air as our platform because at the time there was no advanced web technology. There weren’t as many code libraries and components you could take from, and not even as many programmers as we have now. It wasn’t until HTML 5 became available that we were able to change this long-term strategy.

Temptation to Bundle

That temptation to create a “suite” approach can creep into a company strategy, and it shouldn’t.

In the software industry, there is an unbelievable temptation to bundle everything.  An example from my own industry is marketing and sales—a CRM bundled with a marketing automation application. The two areas are very obviously of equal importance—but does that mean they should be a single application?

This reminds me of an old story: who in a restaurant is more important, the chef or the server? The restaurant lives by the meal cooked by the chef. But what if you have terrible service? The customers will leave, and won’t recommend the place. The answer is that they are of equal importance, but totally different.

It’s the same with sales (CRM) and marketing. They have to work together—there’s no question that they must be in alignment. But like the chef and the server, while they must be in alignment, they’re very different. Therefore it’s a mistake to think that there should be one single application for both. There is even the opinion in some places that if they have a common GUI, they both work equally as well. Not true.

A better approach would be, what is the best application for each group? The flow of data, the processes, and the workflow between the two must be seamless. With APIs, we can do that today.

For ourselves, for Pipeliner CRM, we are here for sales enablement, period. We are not here to enable marketing, because marketing has a very different approach. I do believe that sales and marketing must be aligned—but they must be aligned on the data and process side, not on the functionality side. The functionality is very different. Marketing is all about the web site, social media, and getting leads. Sales is all about obtaining and keeping customers.

Competition

There is also very separate pressure from competition in each area. Let’s say, for example, you’re a CRM company and you’ve purchased another company’s marketing tool. There are hundreds of other marketing tools out there. The question is, did those marketing competitors stop developing when you bought yours? No! They’re going to continue to evolve their single approach. And because they’re working on that single approach, they can program more efficiently than another company—say, yours—that is trying to program for multiple products.

The company trying to combine products has an additional problem: they must create an overall GUI for multiple products. They can’t just buy a product and incorporate it—otherwise, they would just have different products under the same ownership.

Suite Approach is a Dead End

With the advent of advanced APIs, today the suite approach is a total dead-end, both for developers and customers. Not only that, it’s a wrong strategic decision for both.

Time will tell if I am right. I made another prediction 20 years ago: that open source software was the future. I made this prediction at a press conference at a famous cafe, Cafe Landtmann, in Vienna, and was told by the head of Microsoft Europe, at that same conference, that I was completely wrong. Of course, we now know that Microsoft totally reversed that position, and purchased GitHub, the biggest open-source platform in the world, for $7.5 billion.

The different applications within a suite can never be equal with their counterparts in the single-development, best-of-breed arena. It’s just not possible, even if they develop a great GUI to encompass them all.

This brings us full circle back to what we discussed at the beginning of this article: focus. The lesson you learn from focus is efficiency. And from efficiency comes productivity, and that leads to long-term profitability.

“With brilliant simplicity, it leads to the most stringent successful forms of specialization, often in niches, which may be small, but precisely for that reason are usually very profitable.” —Unknown