Just how exciting can a contract management, pricing and sales quoting vendor be? Turns out it might just shake up the enterprise software industry.
Software user conferences are annual homage-paying events. It doesn't matter if it’s a mega-event like Salesforce’s DreamWorld or a small vendor’s. User conferences are one of those "must-do" activities that conjure up excitement and dread in equal parts.
Sitting in a hotel for three days viewing an endless succession of PowerPoints listening to executives exclaim how “thrilled” they are to share [insert software name here] is like being condemned to Purgatory. The bright spots are networking, after hour parties and the occasional useful training session.
Moving Off the User Conferences Script
600 sales, legal, pricing and contract managers filled a small hotel this week to attend the Apttus, a cloud-based Quote-to-Cash software vendor, Accelerate user conference. Just how exciting can contract management, pricing and sales quoting be? This is a long established software market sector with over 20 competitors fighting it out.
The conference opened with Kirk Krappe, Apttus’ Chairman and CEO, giving the company’s performance report. To date, Apttus has managed about four billion contracts, processed around eight million sales quotes, grown one hundred percent year over year growth, added new executives, maintained profitability and opened new offices. Krappe declared his product is a “killer app” by pointing to the results his customers have realized: thirty percent increase in sales deal size, twenty percent increase in renewal value, and eighty percent decrease in sales contract processing time.
Then he did something revolutionary.
Despite delivering these results, Krappe stood on stage and said “no amount of passion and capabilities can prevent one from making mistakes.” He went on to list the mistakes the company has made under his leadership ranging from hiring the wrong people, inadequate staffing to not having the operational infrastructure in place to serve customers.
Apttus lost track of the customer experience which is a core value,” shared Krappe. “And it was these operational growing pains that prevented us from being able to deliver consistently at our high standards. I realize we had fallen short and had not made the necessary investments.”
While sharing with the audience how he and his (mostly new) management team were going to not let this happen again, a very interesting view of Apttus’ vision emerged. This Quote-to-Cash solution provider has a real potential to disrupt software markets.
Shaking Up the Enterprise Software Market
If Apttus delivers on its promises, which is a high probability given Krappe’s desire to avoid having to admit to mis-steps, the effect on the enterprise applications market could be disruptive. Not because a Quote-To-Cash vendor is extending its footprint into adjacent markets but from how Apttus is doing it. Krappe is meeting his customers’ needs based on how they do business, today and tomorrow, versus the traditional “we know best” attitude of enterprise software vendors.
The biggest opportunity Apttus can exploit with its expanding capabilities is the new nature of work. B2B companies increasingly realize that hierarchical organization structures inhibit flexibility and innovation. Companies are moving to dynamic organizational models based on cross-functional teams organized around customers and kept aligned through SLAs. These types of structures enable organizations to predict and respond more accurately to evolving customer expectations.
This shift, however, highlights the gaps in traditional enterprise software solutions and how established vendors cannot support the new nature of work. Apttus’ expanding footprint could position them not only as a logical replacement to today’s dinosaur vendors but also a foundation from which to develop a whole new class of business applications.
Meeting the New Demands of Customers
Apttus’ future is being driven by a diverse group of functional users, who currently number half a million. They are pushing the company to deliver capabilities that historically are expected from a completely different set of application vendors.
For example, Apttus’ sales contract management functionality is being used by customers to manage direct and indirect buy-side procurement contracts. By itself not enough to raise Ariba/SAP’s eyebrows, but a move by Apttus to manage suppliers and offer an integrated solution of contract and supplier lifecycle management surely will.
Likewise, Apttus’ new capability to provide real-time, interactive operational analysis for CFOs expands its footprint into markets aggressively defended by analytics and financial vendors like Oracle, Intacct and others. Apttus delivers an easy-to-use dashboard that alerts a CFO to where revenue risks lie, models "what-if" solutions, enables collaboration with stakeholders by opening Chatter inside of Excel, and implement policy changes (discounts, terms, etc.) with one keystroke so changes are automatically reflected in every price, quote, contract and sales opportunity in the system.
Apttus is deepening its revenue management capabilities with deal management, forecasting, pattern matching, revenue recognition and operational compliance. That will bring the company into the cross-hairs of Lattice-Engines and other predictive analytics vendors who stake claim to the markets of intelligent sales enablement, sales operations and marketing automation.
What’s driving Apttus is its deep collaboration with customers and, according to Ray Hein, SVP of product management, “product development teams that walk in the shoes of customer users to understand their problems, challenges and develop the best solutions.”
Yet no company is perfect. Part of Apttus’ strategy is their platform dependence on Salesforce’s Force.com. Tying their future so tightly to Salesforce could be a strength or weakness; it all depends on what Salesforce does in the future and its continued success. How Apttus navigates future uncertainties will be an indication of just how ready this company is to disrupt established markets.
Title image courtesy of Ian Turton (Flickr) via a Creative Commons Attribution-NonCommercial-ShareAlike License
Editor's Note: Read more from Christine in What Successful B2B CMOs Will Do in 2014