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Is Every Company Really A Software Company Now?

Posted by Neil Sheppard on December 4, 2023
Is Every Company Really A Software Company Now?

It's often said that every company is a software company in the modern market. Let's explore what this means, if it's really true, and how enterprise architecture can enable digital transformation.

“Every business is a software business”

Watts S Humphrey, the "father of software quality", Winning With Software: An Executive Strategy (2001)

It was 22 years ago that software engineering expert Watts S Humphreys first argued that every company, in every industry, was really a software vendor. Since then, his statement has only become more true.

  • Instead of buying CDs, we subscribe to a music streaming service
  • Instead of buying DVDs, we subscribe to a video streaming service
  • Instead of visiting our bank, we use a banking app
  • Instead of calling a taxi, we use an app to summon a driver
  • Instead of going to a travel agent, we book holidays through a website

Even companies still offering physical products, do so through ecommerce. This means that almost every product and service is offered through a unique software experience.

“You used to think of a bank as a place, a physical thing with a big safe in the wall. Now it’s a virtual thing. It’s about enabling your life and helping you solve big problems."

Deborah Hopkins, Chief Innovation Officer, Citigroup

Just as good customer service is a competitive advantage for any organization, in the digital age, a user-friendly website or application is now key. In fact, OnePoll found that 55% of customers have changed service providers or reduced service levels because of tech problems, and an Apica survey discovered poor website and app performance harmed customer loyalty.

This means that the digital user experience that you offer your customers is a part of your product, and quality there is just as important. So, again, no matter your industry, you are, at least partly, a software company.

Surely It Can't B2B?

“Name an industry, and odds are it’s being disrupted by competitors deploying digital technology”

Daniel Pink, Digital Vortex: How Today's Market Leaders Can Beat Disruptive Competitors At Their Own Game

It's easy to think that business-to-business (B2B) companies are sheltered from this. Many feel that sales calls and corporate events will never be replaced by software.

However, Gartner predicts that, by 2025, 80% of B2B sales interactions between suppliers and buyers will occur in digital channels. They found that 33% of buyers desire a seller-free B2B sales experience overall, rising to 44% for millennials.

A high-quality, digital user experience is just as important for B2B vendors as for consumer retail. Still, the need for technology doesn't end with your customer-facing software.

Even companies that sell through third parties and don't need to offer a customer service experience will still need effective software behind-the-scenes. A modern enterprise resource planning (ERP) platform is vital for ensuring your logistics are sufficient, for example.

When both B2B and business-to-customer (B2C) companies have digital ordering systems, a low-tech supply chain just isn't going to cut it. Still, that isn't even the full extent of your software needs.

Employee Experience Needs Good Software Too

"How do companies deflect the pressure from their people using digital technology? How do companies avoid having employees swivel-chair between 13 applications, on average, a day, burning up 33% of their productivity? And now, how do companies take generative AI to completely rethink the game in terms of their business processes?"

Bill McDermott, CEO, ServiceNow

Customers aren't the only ones who benefit from new technology. PwC found that 61% of workplace supervisors spend too much time struggling with imperfect technology when they could be focusing on their workload.

Software has largely replaced the commerce experience. That means that poor software creates a poor environment, and that will rapidly lead your customers and key talent to look elsewhere.

So, good software is now key for success in the modern market. Why, however, does that make your company a software company?

Why You Need To Be Making Your Own Software

“Every company is a software company. You have to start thinking and operating like a digital company. It’s no longer just about procuring one solution and deploying one. It’s not about one simple software solution. It’s really you yourself thinking of your own future as a digital company.”

Satya Nadella, CEO, Microsoft

So, we've established that your digital user experience is a competitive advantage in the modern market. Can't you just make do with a basic website?

Well, yes, you can, but you won't get very far. Having a competitive advantage that anyone else can have is hardly a competitive advantage.

To thrive, you need to create customized, optimized digital user experiences. Third-party tools and external consultants may be necessary, but either way, you're going to need to get involved with building a unique experience for your customers.

Even if you can find a platform that allows you to customize the software experience for your customers, you'll still need to connect it to an enterprise resource planning (ERP) system and ensure your logistics will support the experience. There's no point having a great ecommerce website if the products your customers order on it never actually show up.

Whether you spend time purchasing, implementing, and customizing a third-party software package that works, or whether you take the plunge and start building your own software, you need to start getting your hands dirty with software on some level. Essentially, the process of digital transformation is the process of becoming a software company.

That software, if you build it right, will be the silver bullet that takes the market. This is why we say that every company is now a software company.

“Bill Ford said recently that when he was growing up he used to worry about making more cars. Now he worries—what if we only made more cars? Just making more cars is not our future.”

Venkatesh Prasad, Senior Technical Leader, Ford

Keeping Track Of Your Software

“The information about the package is just as important as the package itself"

Fred Smith, FedEx founder

So, you're a software company and likely need to undergo a digital transformation to support it. The key now is to understand your software landscape and application portfolio, so you can ensure it's optimized and tailored to your customers and needs.

To do this, you need a single source of truth where anyone in your organization can access information about your IT landscape and application portfolio. This brings a range of key capabilities:

  • You know your as-is IT landscape and how it can be optimized and tailored to your users
  • You know who the user base of every piece of software you use is
  • You know how each piece of software you use fits with the others
  • You know what your software is made of and where it was acquired
  • You know your route forward into digital transformation

To store intelligence on all of these topics somewhere that anyone in your organization can access and visualize it, you need LeanIX EAM.

How LeanIX EAM Supports Digital Transformation

"Regardless of industry  your company is now a software company, and pretending that it’s not spells serious peril"

David Kirkpatrick, Now Every Company Is A Software Company, Forbes Techonomy

LeanIX EAM is your workspace for digital transformation. It stores all the information about your software and how it interacts with the real world, so you can get a clear picture of your business and its true nature as a software company.

You can then work with that data to map out your path from where you are to where you need to be. Navigate digital transformation confidently with the software intelligence you need.

To find out more about LeanIX EAM, book a demo:

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