The best place to start here is to define ISV or “Independent Software Vendor. Gartner defines ISV as a software producer not owned or controlled by a hardware manufacturer, a company whose primary function is to distribute software. The keyword here is “independent.”
Hardware manufacturers that create and distribute software (such as IBM and Unisys) are not ISVs, nor are the users (banks, for example) that may also sell software products. ISVs usually provide products that the primary vendor (i.e., IBM) does not, thus creating a space for clients to look elsewhere for their remaining software needs.
Why are ISVs important?
First off, ISV providers are businesses that can work with any ERP provider they choose. They are not obligated or tied to any particular vendor for any reason and act as an independent business. Reasons for utilizing an ISV must be connected to the value that an ERP can bring to it. The value or perceived value can change because it is not defined by the business but by the customer. This value often comes from 4 areas. These four components that your ISV must have in order to best complement your ERP are:
- Open communication
- A co-marketing strategy and execution plan
- A simple product “map.”
- A clear, straightforward engagement framework
Below we deep dive into the four areas.
Open Communication Between Vendors and ISV
A great business relationship begins with trust and open communication. Not everything will be agreed upon, but it is up to the parties involved to make sure things get back on track, and common ground is found. Then, the relationship can move forward and be as productive as possible.
An ISV should have a representative working with the vendor. There should be a documented escalation process for both any relationships and/or product issues when they arise. There should also be an ISV advisory board to allow ISVs to collaborate to improve any aspects of the ISV/vendor engagement. Ideally, this ISV advisory board should also have a formal engagement protocol with the VAR (Value-Added Reseller) and Independent Software Vendor (ISV) community.
A Co-Marketing Strategy and Execution Plan
Successfully choosing an ERP vendor should take reputation into account regarding their ability to indicate their target market, position their solution in a meaningful way, and how they engage with that target market. The way they engage with the market should happen in a meaningful, structured manner and build trust and relationships with the clients. These clients will then be repeat customers and refer others.
A Simple Roadmap
It may sound obvious, but it is essential to have a detailed map for your product and deployment strategy. This ensures that your ISVs make their decisions around their product, utilization of resources, and their specific product roadmap. It is not uncommon for vendors to not have a clearly defined “roadmap,” which can prove detrimental to business success.
A clearly defined roadmap needs to convey the functionality at a sophisticated level, the target market, and the timeframes for delivery. Larger vendors often make decisions that can negatively impact their ISVs because they forget that an ISV, like their own business, needs to operate in a free environment and make the right choices regarding the ERP vendor. The roadmap is essential because it provides a transparent, straightforward approach to who will manufacture what.
To enter a market area with core industry functionality in your product, you need to announce that as soon as the decision is made and ideally the decision after consulting with your ISVs, especially if you are serious about working with them and don’t want to create a bad reputation in the marketplace.
Simply put, both the vendor and the ISV are independent parties who should make the best decisions for them. However, building this map of dates and goals ensures minimal chances of conflict and that the journey to market is clear, smooth, efficient, and profitable for all involved parties.
Clear Engagement Framework
A clear engagement framework creates clear expectations for both parties. This agreement or framework should cover many aspects of the relationship, but the main ones that are necessary are:
- Software Usage rights – should cover what tools are provided, how many users, if the software can be used for production by the ISV, and how long.
- Intellectual Property rules – who owns what in the solutions that are built and will be built.
- Access to reselling channels – if you present the ISV to resellers, how and when will it be complete.
- Access to support at an expert level – clearly defined tiered system to discuss the software; begin with junior support representatives and always have a senior representative available.
- Solution Certification – an essential aspect of an ISV program to establish that the solution can be trusted to collaborate with the main application and alongside other ISV solutions that a customer or partner may choose to implement.
- Marketing and engagement – what level of marketing activity can an ISV provider expect from the ERP vendor, and how will that be funded. Also, how will the ERP vendor represent the ISV solutions; what kind of management will be managing the solutions (if any).
Tiered programs are a great way to differentiate the level of engagement between ISV and vendors. Tiers can be based on certifications, participation in collaborative marketing, level of support provided, or anything else!
A well-structured framework makes for efficient and effective ISVs. Lack of clarity in these areas can be detrimental to building relationships between ISVs and vendors.
Choose the Best Partner
You will be looking for the most proactive and efficient approach that will include the freedom to choose the systems and services that will best support your business. The ISV partners should be able to provide recommendations or practical advice, and they too should be prioritizing creating a long-term business relationship with you and your organization.
Your ISV partner will play an essential role in ensuring your business gets all of the benefits out of your technology investment. Every partner has a unique perspective, a team of experts, skills, and services to help deliver the right solution.
Working with the right ones will bring vast knowledge about utilizing the best practices, restrictions, and regulations to help you achieve your desired results.
Sources:
https://www.richardduffy.com/four-components-need-for-winning-erp-isv-strategy