Pick Market Niches with Great Care — Ready Fire Aim Won’t Work for Market Niche Decisions

Building markets on monies spent, but for solutions that are under utilized, is a problematic endeavor. Consider that 1) the big purchases have already been made and 2) that the solution purchased has not proved to be popular.

Consider the enterprise business market for social collaboration software. This market includes products like Microsoft® SharePoint® and IBM® Lotus Notes. Traditionally purchases of SharePoint and Notes have been plagued by low levels of user adoption within the enterprise. Answering “why” adoption rates are low has proven to be a risky endeavor as research power houses like Forrester Research are at a loss to explain clearly a pervasive reason for low adoption rates. Rather, Forrester and others contend that low adoption rates are the result of a combination of factors, including low levels of “user friendliness” in the features of SharePoint and Notes as well as a tendency to push users into re-engineering daily business processes.

Business Process Re-engineering (BPR) is neither a trivial thing to achieve, nor an area where most consulting firms ought to venture to find new business. Sales cycles are very long. As well, the typical BPR solution requires the buy-in of multiple silos from within the enterprise; for example, for banking and finance, Audit, Compliance and MIS/IT may all have to endorse the same solution before an order will be placed. Building consensus among these three powerful organizations can literally be a multi year effort that will prove expensive, not only with regards to the amount of time required to pull off the deal, but, perhaps, in terms of additional parties who may have to be added to the sales team (for example, an ex CEO or other key influencer who can persuade all three groups to endorse the solution) at a costly price.

If major BPR is required to resuscitate the fortunes of Notes, or SharePoint within a business, then why go there? Rather, as I see it, a better case for building a niche upon a purchase already made is to demonstrate how SharePoint or Notes can be applied to an additional need, one that is compelling, but not addressed properly within the enterprise. Once again, turning to banking and finance, the need for constant compliance reporting across this highly regulated industry will provide a greater driver for an attractive market niche with a substantially attractive value proposition. Just compare the cost of using something already purchased, for example SharePoint, for compliance reporting vs the cost of licensing IBM OpenPages. No brainer?

© IMB Enterprises, Inc. & Ira Michael Blonder, 2011 All Rights Reserved

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