Business Apps Spur SMB Consulting Opportunities
With product margins thinning and technical services becoming more automated, many solution providers need to find ways to add value. The most logical place to do that is in business consulting, where application software can lead to lucrative contracts that can transform how organizations operate.
Traditionally, this kind of opportunity has been largely reserved for consulting firms that target the Fortune 1000. However, as business application software becomes easier to deploy in the small- and midsize-business (SMB) space, the opportunity to generate additional business consulting revenue in that area is steadily expanding.
The market runs the gamut from large application software providers such as SAP to smaller vendors such as Interneer, a provider of business process management (BPM) software that's delivered as a software as a service (SaaS) application.
"One of the things about SAP applications is that they create a lot of drag factor for long-term engagements," said Kevin Gilroy, SAP senior vice president of global indirect channels. "The economics of SAP applications create a lot of wealth for solution providers."
SAP is looking to drive those opportunities more aggressively and has identified about $22 billion in revenue opportunities for solution providers, Gilroy said, adding that the company expects to drive about 40 percent of its sales through the channel by 2015—up from 33 percent in 2012.
SAP obviously isn't the only company pursuing that opportunity. As SMB organizations become more sophisticated about the potential business impact of an IT investment, they are looking for application software that allows them to operate more nimbly than larger rivals, according to Interneer CEO Romeo Elias.
Interneer recently released the Interneer Intellect 7 Platform, an upgrade to its BPM application that adds support for a wide range of browsers and additional file formats. It's designed to provide an application environment that allows organizations to manipulate and adjust workflow processes without having to hire an application developer to do that customization.
That creates a unique business consulting opportunity for channel partners because it allows them to rapidly prototype changes to workflow in collaboration with customers, which, in turn, generates business consulting opportunities, Elias said. Customers tend to feel better about those kinds of investments, he said, because they add value to the business, versus paying fees to have a vendor configure and install on-premise software that, once deployed, often can't be customized without the aid of an application developer.
"When it comes to BPM in the SMB space, it has less to do with the size of the organization than it does with maturity," said Elias.
Currently, there is significant upsurge in BPM activity because with the introduction of mobile computing devices, organizations of all sizes are looking to re-engineer processes in ways that make it easier for them to manage both inside and out of the office.
That kind of macro-level change to computing environments requires BPM software that is specifically designed to allow organizations to easily experiment with changes to processes, Elias said. These processes can either be rolled back or enhanced as the organization becomes more adept at working with mobile computing devices.
For most customers, IT is a means to a business end, but too many solution providers in the channel have focused on the technology as an end in itself, rather than as a way to help customers achieve a business goal. The good news is that as application software continues to evolve in the age of mobile and cloud computing, demand for business consulting expertise in the SMB space has never been greater.