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The other day, I was in a discussion about application software. When I started in the industry, all the software you got, you got free with hardware. Now, I reckon you (should) get the hardware free with the software. In those days, customers wrote their own applications. Now, they are bought, at enormous cost and, if the users are very foolish, customized at yet further cost. All because commercial-off-the-shelf is still cheaper than do-it-yourself.

The result is a bit like modern shopping centers. Fine if all you want is (I really can’t start listing all those names, I’ll get into terrible trouble if I do, but you know the stores I’m talking about, don’t you) (I’m English, but I believe the American shopping mall suffers from the same syndrome) sameness, but if you want something just a teeny bit different, you’re on your own. Today’s application software is a bit like that. You can have any process you like as long as it begins with an “S” (as in SAP).

All well and good, and a lot of people make a lot of money installing and customizing this stuff and it all works jolly well. With luck. But the result is that all these businesses end up behaving exactly alike. It gets so that, if you know about the processes beginning with “S,” you can predict their behavior.

Now, some of you will have seen the advertisements from the UK bank that offers its customers the telephone number of their local branch, rather than a call center. So they can talk to a person, rather than one of those systems that requires you to select from the following options before connecting you to someone in Kuala Lumpur, named Sharon (a likely story). Well, it is the same with business processes.

What enables an organization to distinguish itself from its competitors is distinct and different behavior. Different behavior requires different business processes. This is fundamentally counter to the strategy being sold to, and followed by, most of the industry. Just as you can order a car with just the features you want; just as medicine is beginning to contemplate personalized therapies; so the software business will have to return to the days of tailored solutions.

This is not to deny that there is a place for generalized solutions. There are processes where it is counterproductive to be unique. But, where organizations are customer-facing, where they want to obtain competitive advantage, they will have to be able to tailor their behavior (and business processes) to be different from their competitors’. They may even want to tailor their behavior to the expectations of individual customers. If you haven’t noticed, the finance industry already does a lot of this for “high value customers.”


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