Showcase Your Business as a Thought Leader » Publish Your Blog, Videos and Events on ALL EC » Save 25% Now
Welcome Guest | Sign In
CRMBuyer.com
salesforce commerce cloud

Middle Office or No-Man's Land?

By Denis Pombriant
May 20, 2018 5:00 AM PT
apptus has shifted its focus to the middle office where back-office data can influence front-office processes

It was once common knowledge that Apttus was the next big acquisition target on Salesforce's radar, until Salesforce decided to acquire another CPQ (configure, price, quote) vendor to augment its Sales Cloud. In the two-ish years since, Apttus has nicely pivoted, diversifying its partner base and justifying its existence with a new strategy and nomenclature around what it calls the "middle office." I was present at Accelerate, the company's annual user conference, last week in San Francisco.

As you can assume, the middle office is neither front-office customer relationship management nor back-office enterprise resource planning. It is a potentially viable territory where back-office data influences front-office business processes. As you might expect, the middle is rife with landmines for all companies with aging on-premises ERP system and a need to connect with cloud CRM.

That the middle office has taken so long to emerge from the cloud revolution does not make it suspect as an entity; it more reflects the reality that it wasn't needed as long as front- and back-office infrastructures were being built out.

However, front- and back-office clouds largely are built out at this point, even if there are many holdouts, and this raises an interesting question: Can independent middle-office vendors survive, or will they of necessity be absorbed by either ERP or CRM purveyors?

The Data Dilemma

Apttus tried to answer that question for itself last week by highlighting its unique perch overseeing the sales process with a platform (OMNI) and analytics capability (MAX Proactive) unique to its central domain, utilizing the data models on either side.

Demonstrations using focused artificial intelligence and machine learning showed Max advising sales people on next best actions in a variety of situations, from identifying target opportunities to closing the quarter.

As with any such sales analytics, the machine learning requires a hefty data set to properly train it to make the best recommendations. Unfortunately, a chicken-and-egg situation crops up almost immediately for many sales organizations: Their data is in one or many ways inadequate.

Either it reflects bad practices that the client company wants to get away from -- such as excessive discounting -- or the company has a chaotic sales process, and its data doesn't lend itself to training anything.

Only about a quarter of sales organizations actually have the well-managed sales processes that truly would benefit from Apttus style analytics, based on decades of excellent research from CSO Insights, which I've referenced previously. Another quarter have chaotic processes and would need a lot of work getting up to speed.

That leaves half of the sales organizations in some form of no-man's land, in need of better processes but lacking the data to train a model.

Adaptability Matters

Apttus could dedicate itself to the top quarter of companies and make a nice living, while others work to catch up -- but if history is a guide, many won't. Fortunately, Apttus doesn't have to limit itself. In addition to its machine learning, Apttus has given itself a back door for getting into sales organizations that lack the needed training data but avidly want to improve.

The Apttus model has a capability for setting explicit rules in the event ML algorithms fail to find enough data to grow on. This leaves the organization free to work and collect better data in advance of a time not too far down the road when it can train its algorithms adequately.

It's a neat trick if it works, but the fly in the soup is that any SFA vendor with analytics can do the same thing. Where Apttus further differentiates, though, is in its easy ability to access the data models on each side of the middle office and adapt to specific situations.

That means it can use back-office data such as pricing, personnel and catalog to steer front-office processes, which include making quotes and closing business. Its real advantage might be that its focus is on the middle and not the more provincial needs of either major silo. As CEO Kirk Krappe says, it's in the middle where commerce gets done. He has a point.

My Two Bits

Apttus -- and any other middle-office vendor -- has an opportunity to stake out a unique territory that, from all indications, has a valid rationale for its existence. However, a valid rationale isn't enough to guarantee success.

Other vendors, especially in the front-office cloud, easily could take over the niche and turn it into a feature. Apttus' challenge is to put enough "stuff" into the middle office to make it difficult for others on its flanks to muscle in -- and it has the stuff.

That's why it introduced OMNI, its version of a platform that consolidates its advances in CPQ and machine learning into a useful whole, and importantly, a digestible narrative.

Apttus' big challenge right now is to be crisp in its messaging and positioning to get its ideas to the largest audience, and it has some work to do -- though it's early days. Speaking with a representative of Thompson Reuters, a year-old customer with 1,200 sales users, it appears that Apttus knows what it is doing. The need now is to scale.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.


Denis Pombriant is a well-known CRM industry analyst, strategist, writer and speaker. His new book, You Can't Buy Customer Loyalty, But You Can Earn It, is now available on Amazon. His 2015 book, Solve for the Customer, is also available there. Email Denis.


Facebook Twitter LinkedIn Google+ RSS
salesforce commerce cloud
How do you feel about the latest challenges to Facebook's reputation?
I think the critics have ulterior motives. I'm a Facebook fan.
I don't like it, but there's no alternative, so I still use Facebook heavily.
I have adjusted my Facebook privacy settings to suit my comfort level.
I only use Facebook casually, and I avoid posting anything very personal.
I check Facebook to see what others post, but I don't post myself.
I never use Facebook.