At the conferences where I speak, when I talk about Cloud Computing and the Software-as-a-Service (SaaS) model, one of my premises is that this new paradigm requires new competencies. More than ever, companies offering Software-as-a-Service need to be true to the “service” component and be responsive to customer requests.

Upon hearing this, many companies immediately think of customer service, which is indeed important.  Nonetheless, many customers and non-customers offer suggestions that could or could not be of value to such organizations.  Companies that hear their customers are also open so something called “open innovation” whereby innovations can come (in part or in whole) from outside the company’s boundaries.

In terms of suggestions, one example revolves around the team at Zoho, a SaaS provider. As can be seen by the image at the top of this post the company made a slight change to its headline statement at the top of its web site between September 4th and the 13th of this year.  About a year ago, I had the pleasure of interviewing the company’s founder and CEO, Sridhar Vembu and must admit I was quite impressed by his vision and intelligence.  At that time, the company web site was little more than a listing of all their applications.

I asked Sridhar if they were thinking of revamping their messaging to focus on customer benefits and improve the general design of the site.  He said they were and a couple of weeks ago, I stumbled upon the new site, which, in my mind, is an improvement.  Nonetheless, in my email congratulating them on the new site, I did mention that it might be a good idea to include two messages: 1) Who Zoho makes companies more productive and 2) the millions of users they have.  See my email below.

It says a lot that a few days later, they had taken action on these suggestions (from outside of their company) and implemented them.  It was certainly possible that the suggestion would not have been implemented, but it is apparent that they take these suggestions seriously and are open to anything that helps them improve. This is a great lesson in whatever name you’d want to put on this (e.g., open collaboration, open innovation, etc.) for other SaaS providers and highlights the type of open company culture that such companies would do well to embrace.

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En las conferencias que he dictado sobre Cloud Computing y el modelo SaaS, uno de mis premisas es que este nuevo paradigma requiere nuevas competencias para llegar al exito.  Mas que nunca, las empresas que ofrecen soluciones SaaS o basados en Cloud Computing tienen que entender que el servicio al cliente y la capacidad para responder a sus usuarios debe ser agil y efectivo.

Muchas organizaciones piensan que esta agilidad aplica a temas de servicio al cliente solamente.  Sin embargo, hay una nueva ola de interés sobre un tema que se llama innovacion abierta.  Basicamente, tiene que ver con buscar nuevas ideas interesantes que pueden provenir de afuera de las “cuatro paredes” de su propia organizacion.

Tengo un ejemplo muy bueno de esto y tiene que ver con la imagen en la parte superior de este post.  Verán que son dos versiones del sitio web de una empresa que se llama Zoho.  Hace un año, tuve el placer de entrevistar a su CEO, Sridhar Vembu.  Me impresionó mucho su inteligencia y su vision.  Sin embargo, una de las cosas que le pregunté es porqué su sitio de Internet no contenía mensajes mas fuertes de los beneficios para sus clientes de sus soluciones.  Sridhar dijo que estaban trabajando en esto y hace unas semanas vi el resultado.

El sitio es mucho mas enfocado a beneficios y creo (aunque solo el tiempo lo dirá) que tendrán mejor conversiones.  Cuando le envié un correo felicitandolo por el nuevo sitio, di otra sugerencia que me parecería muy efectivo si pondrían prominentemente en la parte superior del sitio los siguientes dos mensajes: 1) Como Zoho hace las empresas mas productivas y 2) el numero de usuarios que tienen.  Ver mi email abajo:

Dice mucho que unos dias después, tomaron acción sobre una sugerencia de afuera de su empresa (he recomendado Zoho anteriormente pero no soy cliente).  Para los proveedores que quieran ofrecer soluciones en la nube, Zoho es un excelente ejemplo del tipo de cultura organizacional que tambien hay que tener para ser exitoso.

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Primero lo primero. Es importante comenzar por decir que CRM es realmente una filosofía basada en un principio fundamental: acercarse mas a sus clientes.  Esto implica entender mejor las necesidades de cada cliente, responder mejor a sus inquietudes, etc. Por ende, su éxito o fracaso tiene mas que ver con factores como liderazgo, compromiso del personal y la cultura organizacional.  El responsable por el éxito de una iniciativa CRM no es el Director de CRM sino el Presidente de la organización.

Según la autora, Frances Cairncorss (escritora de la revista The Economist) en su libro, La Empresa del Futuro,  uno de los 10 principios de las empresas exitosas del futuro es que fomentaran una clima organización abierta y una que promociona la colaboración.  Como hemos mencionado, lograr esto tiene que ver mas con liderazgo y cultura organizacional. Sin embargo, como lo menciona la autora, las nuevas tecnologías de Internet servirán como herramientas para apoyar a las organizaciones en lograr esto.

Como líder verdadero de la iniciativa de CRM, el Presidente de la organización necesita realizar una comunicación constante hacia sus colaboradores.  Para esto lo normal es utilizar a las formas de comunicación existentes como lo son las reuniones, folletos y correo electrónico.  Sin embargo, una nueva clase de software empresarial basado en redes sociales y tecnologías llamadas “Web 2.0” habilita la comunicación bidireccional (o multi-direccional) para fomentar una cultura de participación.

Aunque se ha escrito mucho sobre el uso de tecnologías Web 2.0 y redes sociales publicas como Facebook y YouTube, hay beneficios importantes en el aprovechamiento de las tecnologías Web 2.0 privadas (internas a las empresas).  Por ejemplo, en Agosto, la firma consultora McKinsey publicó un estudio que encontró que los dos puntos que mas nombraron las empresas como beneficios percibidos por adoptar tecnologías Web 2.0 internamente fueron el de un acceso mas rápido a la información y una reducción en los costos de comunicación.

Hace poco, la empresa Socialtext, adopto una estrategia de ofrecer su plataforma de comunicación empresarial basada en tecnologías Web 2.0 sin costo para hasta 50 usuarios.  Mejor aun, dicha empresa ofrece su herramienta en modalidad de software como servicio lo cual no requiere instalación por parte de sus clientes.  Adicionalmente, adoptar esta clase de herramienta prepara a su empresa para adoptar la siguiente fase de CRM llamada CRM social antes de sus competidores.

Hábitos de uso. Durante mi carrera (mas larga de lo que quisiera recordar) dentro de la industria de tecnología siempre he quedado sorprendido con la cantidad de software y hardware, adquirido por millones de dólares, que nunca se utiliza.  Esto es especialmente cierto cuando se trata de software que impacta el proceso de negocio de ventas ya que tiene ver con vendedores.  Los vendedores de una empresa son los que generan los ingresos y ellos son los primeros en reconocer su valor a la organización.  Por esto, no hay que subestimar el esfuerzo involucrado en evangelizarlos sobre los beneficios de adoptar nuevos procesos de negocio que incluyen el uso de un “software CRM.”

Hoy en día, veo empresas grandes y pequeñas, inclusive algunos de mis clientes, cometer el error de pensar que, por pagar millones en adquirir un software en particular, este problema será resuelto.  Aunque es importante que la herramienta sea bien diseñada, muchos disminuyen la importancia de direccionar sus mayores esfuerzos al tema principal: el talento humano.  Esto incluye adquirir servicios de consultaría de empresas expertas en el tema y asistencia a entrenamientos apropiados.

Personalmente, he visto empresas grandes y pequeñas, pagar millones tras millones por licencias de software subutilizados porque se les agotaron los recursos para atacar la dimensión de factor humano de su iniciativa de CRM.  Para la mayoría de empresas comenzando una iniciativa de CRM, veo poca necesidad de adquirir grandes aplicaciones con licencias costosas antes de resolver los asuntos relacionados con procesos de negocios y el talento humano.

Para la mayoría de las empresas (excepto las mas grandes) Colombianas implantando estrategias de CRM, sugiero que miran muy de cerca la opción que ofrece la empresa Zoho.com. Hace unos dias tuve la oportunidad con dialogar con el CEO de dicha empresa y esta ofrece un CRM muy completo a bajo costo y fue creado por una empresa que conoce los mercados emergentes y esta disponible en español.  La empresa ofrece tres usuarios de su CRM sin costo con la posibilidad de comprar mas usuarios por el costo de US $12 por usuario por mes, una fracción del precio de licencia de opciones similares.  Adicionalmente, al igual que Socialtext, dicha empresa tiene una modalidad de software como servicio lo cual no requiere instalación de software y permite avanzar a un paso mas rápido.

Recuerden que CRM es una filosofía que involucra todo contacto con los clientes y esto incluye la postventa.  El CRM de Zoho incluye herramientas para manejar el soporte postventa con los clientes con la creación y el siguientes de “tiquetes” para hacerle seguimiento a cada incidente con cada cliente.  Adicionalmente, le empresa ofrece un componente que integra a su aplicación con Microsoft Office.

No haga una inversión desequilibrada. Estos son solo dos ejemplos de nuevas opciones que existen para apoyar a empresas con interés en implantar una iniciativa de CRM.  Para una empresa con 20 usuarios, adquirir una solución proveniente de una gran multinacional puede costar mas de $US 20k para el primer año.  En contraste, abriendo su abanico de opciones para incluir a empresas como Zoho y Socialtext significa que solamente una fracción de dicho presupuesto se pagaría por licenciamiento para que el resto del presupuesto podrá ser invertido en capacitación, servicios adicionales de tecnología de un proveedor local y, mas importante aun, servicios de consultaría de negocio (CRM).

La idea no es gastar menos sino invertir de forma balanceada en los factores que incrementaran las posibilidades de éxito. Al comienzo el tema de cultura organizacional, comunicaciones internas y conocimiento del talento humano tiene mucho mas impacto (en mi opinión) sobre el éxito de las iniciativas de CRM que la herramienta de software de CRM especifica.  Por ende, yo invertiría acorde a esta filosofía para incrementar mis chances de éxito y lograr un retorno de inversión mas grande y mas rápido.

Para las empresas interesadas en comenzar su proyecto de CRM ó reactivar un proyecto fallido, es importante aprovechar una variedad de ofrecimientos de mercado nuevas e innovadoras que no implican sumas desproporcionadas de inversión.  Todo esto no implican que no hay un papel que pueden jugar las aplicaciones con licencias y tarifas de servicios mucho mas costosas pero dichas empresas tienen que claramente demostrar que el valor sea también proporcionalmente a la inversión (mas grande).  Las opciones son sanas para todos y abren nuevas posibilidades.

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In my last post, I spoke about my conversation with Sridhar Vembu, CEO of Zoho Corporation, an innovative software company headquartered in the US, but with most of their employees based in India and China.   I wrote mostly about the ingredients of the company’s success.  In this post, I’d like to delve a bit further into Sridhar’s vision and philosophy and its applicability to Latin America.

While I was speaking with Sridhar, I was reminded of John Hagel’s book, The Only Sustainable Edge.  In it, Hagel mentions two important areas touched upon by the Zoho CEO. The first one has to do with Zoho’s ability to offer customers value at an affordable cost which is in synch with Hagel’s assertion that technology innovations are opportunities to “create more value at less cost.”  Zoho’s location, recruiting, training and company culture paired with its bet on cloud computing make are certainly aligned to a goal of creating more value at less cost for their customers.  Additionally, Hagel points out in his book that managing across two cultures “can create new opportunities to enhance performance by drawing on the best of both cultures.”  Certainly, this is not news to Sridhar who lives and breathes it every day.

In Latin America, many discussions on entrepreneurship center upon the disadvantages of the region when compared to the U.S. This runs the gamut from lamenting the scarcity of investment capital; the lack of the right human capital and other ecosystem and infrastructure components that are missing. As an aside, the same day of our talk, Sridhar actually wrote a post on his blog about the VC issue. However, anyone from Latin America who could listen to Sridhar speak about his particular voyage, would actually start to feel as though companies coming out of emerging regions such as Asia or Latin America are at a distinct advantage when compared to US companies. What a great perspective!

While players such as Salesforce.com, Microsoft and Google have solid and focused SaaS offerings, Zoho has been adding applications to its suite at a blistering pace.  Though the company’s user base also continues to grow, it’s only a fraction of Google’s user base.  Sridhar has heard this observation before and I’m sure can read between the lines of the sometimes veiled (sometimes not) insinuation that this means that they will eat Zoho’s lunch some day.  Nevertheless, I believe Sridhar is correct (at least for the time being) in asserting that Google’s rising tide can lift all boats floating in the SaaS “sea” since they are helping to educate customers on the value of these new SaaS offerings.

The company is profitable and is free to follow its long term strategy.  While the Google threat (and others) will probably get more palpable as time goes by, I agree with Sridhar’s view that companies don’t get killed by competition; they commit suicide. Nevertheless, one area where I believe that the company needs to improve is in its customer messaging or marketing in general.  For instance, instead of a list of applications on the homepage, it would make more sense to quickly set up customers depending on their specific vertical or business process.  Fortunately, this is precisely one of the areas for improvement that the company has targeted and openly acknowledges that it could do better on the marketing front.

Final Thoughts

I think it’s obvious that I truly enjoyed my conversation with Sridhar on a number of levels.  He mentioned that he is quite passionate about the topic of how emerging market companies can compete with companies based in developed markets, which is also a strong passion of mine.  During our talk, I got the sense that Sridhar has a firm conviction that companies from emerging countries can truly compete on equal footing with “marquee companies” and actually possess advantages that they need to leverage.    Hopefully, at a later time, I can speak a bit more in depth with Sridhar about the topic of digital innovation in emerging markets.

As a VC in my previous life, I had the opportunity to speak with extremely intelligent and capable entrepreneurs and investors.   After my conversation with Sridhar, I’m as impressed with him as with any other person I’ve met.   Different people are remarkable for different reasons.   For instance, Google’s founders had the insight to understand the need for organizing the world’s information with the oncoming, accelerated adoption of the Internet. Even more importantly, before they fully saw how big and successful they could become as a company with an actual business model, they jumped in and started solving the problem.

Solving such grandiose and ambitious problems is something that is handsomely rewarded and rightly so.  Nevertheless, there are a number of dynamics, which are creating the need for new types of companies:  ones that offer digital innovation at a lower cost.  New technologies such as cloud computing, virtualization and SaaS delivery provide the digital foundation.  Also, as it turns out, emerging markets such as Asia and Latin America, actually offer advantages that astute entrepreneurs can leverage.  As Zoho’s trajectory points out, to execute this correctly takes a number of competencies such as a clear vision, competent leadership, focused development of human capital and above all…patience.

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A couple of days ago, I had the opportunity to talk with Sridhar Vembu, CEO of Zoho Corp, a strong player in the SaaS software market. The company’s corporate headquarters are in Pleasanton, California and the majority of it’s about 1000 employees are based out of India and China.  These and other characteristics make Zoho and Sridhar, who has spent half his life in India and half (presently) in the states, an excellent model for digital innovation in Latin America.

First off, what really struck me about Sridhar after our chat was the balance of three key characteristics of his personality that came across:   1) His passion for the “people aspect” of building a business, 2) his practicality and incisive thoughtfulness and, finally, 3) an underlying, intense pride (in his people, what they’ve accomplished, etc.) and competitiveness.   Incidentally, my own opinion is that this type of open personality, high level of intelligence, balanced outlook and strong personal drive will be key leadership traits for achieving success in the coming years, but that’s a topic for another post.

I won’t go into a ton of detail about the company because there’s a wealth of information on their site and in other articles. If you want to delve deeper into the company’s history and Sridhar’s unique (and, in my mind, spot on) thinking about digital innovation in today’s context, check out Sramana Mitra’s excellent interview. In a nutshell, Zoho bet on cloud computing and the SaaS delivery model early and are just now really hitting their stride in the market with about 2M users.  Also, as a recent article in BusinessWeek Magazine states, Zoho competes with behemoths such as Google, Microsoft and Salesforce.com.  All this from a point in 1999 when, as Sridhar mentioned, they had one key goal: survival.  Now that’s a goal many small business people can identify with, but particularly, those in emerging countries such as in Latin America where capital is in even shorter supply.

So what happened after 1999 to garner them so much success?  It had nothing to do with getting Venture Capital (VC) funding since they’re a private company which has bootstrapped itself since the beginning.  Sridhar mentioned that their strategy has focused on depth of functionality, breadth of offerings, integration and support.  The integration focus is a boon to usability because they are able to integrate key functionality from their applications into the work processes of their customers.  Through “contextual information integration” things like email (even Gmail) are integrated with the CRM product so that customers can get their work done faster.

In terms of support, at least one person I referred Zoho to here in Latin America, has had an incredible experience in this regard.  Sridhar mentioned that part of their engineers’ training entails alternating time on the support lines as well as monitoring the support database helping them into the customer mindset from the outset.  In order to execute such a strategy, Sridhar mentions a trait that the company must possess: patience.  Patience to develop employees straight out of high school into productive professionals, patience to solve what Sridhar describes as the small business “IT problem” and patience to build an organization for the future.

What a terrific model for Latin American companies to follow.  There’s a ton of talent down here and, Sridhar and Zoho’s journey can be a lesson for many.   As he mentioned, Sridhar himself looked to a number of Japanese companies such as Honda as models to follow.  After WWII, Japan was a developing country (like India or all of Latin America) and through patience and dedication, they were able to achieve the economic and technological feats we take for granted today.  It’s important to note that modeling yourself after someone doesn’t mean cloning them and Sridhar has certainly adopted some characteristics of the Japanese model, but not all.

This last point is an important one.  Just this week I was in a meeting with some entrepreneurs when someone asked me if Colombia’s path to success was, among other things, in finding an instantiation of a Stanford University (the context of the conversation was the lack of an ecosystem in these countries such as exists in Silicon Valley).  I feel that Zoho’s example shows that you don’t need a carbon copy of another country’s ecosystem, you need to build on the strengths you have and, in Zoho’s case, that was patiently sticking to their strategy and building their organization.

Sridhar made a great point about the fact that in Silicon Valley there’s quite a bit of talent to choose from no matter what expertise you need.  It seems to me, Sridhar has taken a disadvantage in emerging markets (scarce talent pool with world-class expertise) and converted it into an advantage. By giving young people without a college degree a chance to successfully prove their mettle and compete with international powerhouses such as Google and Salesforce, Zoho benefits from the resulting highly committed, passionate and dedicated group of employees it is nurturing.  Aside from this, such a highly motivated group of collaborators injects much energy into the company and, according to him, “keeps [him] young”

In tomorrow’s post, I’ll delve further into Sridhar’s vision and philosophy and its applicability to Latin America.

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