Most companies (such as car manufacturers) use pretty much the same inputs. Toyota, GM and Ford take the same raw materials and have similar levels of education in their workforce. Prices are similar for all the car companies;  metal and rubber are are traded globally, manufacturers will  relocate to regions where labour is cheaper. All car companies carry out substantial R&D to stay in the game. So, why has Toyota  eclipsed GM as the No 1 manufacturer in the world?

A key part of the answer is the Toyota Production System, the process by which it builds vehicles and the way that it is continually improving this process. Toyota’s competitive advantage is not its cars, but the way in which it builds its cars.

Toyota use the TPS that everyone knows, but they also follow the Toyota Way, a way of thinking that gives them the real advantage. They drive their operational performance (TPS) guided by the Toyota Way, which is focused on respect for people, their employees and their customers and a Absolutely Focused and Relentless (AFR) drive to improve, to be better, to provide a better offering to their customers, always, every day. Instead of cars, it is information that flows down the modern company assembly line. Companies that manipulate this information better gain an edge over their competitors.

So why does this matter to your software company?

Building software used to be about a team writing code, and then (every so often) releasing it – either to customers, or to another part of the company that dealt with customers. In the world of Saas and Cloud this is no longer true;. Your company and product are available 24/7 on the web and every member of the team needs to be focussed on gaining and retaining customers.

Everything that your developers do have a direct and immediate impact on the customer experience. If you’re lucky, they will gain you money (The ‘Upgrade’ button is in just the right spot). If you’re unlucky they could leak your cash- either as a trickle without you noticing it (a minor update means the site runs slightly slower, and your conversion rate is down several points) or a flood (the website crashes in the middle of a big promotional campaign).

Enterprise Ireland is here to help

This move from ‘build and they will come’ to ‘everybody focussed on the customer experience’ is big and daunting. But it’s no bigger than what the car companies have done (remember how Toyota’s products were laughed at in the 60′s?).  And it’s no bigger than the lean transformation that ‘traditional’ Irish companies have achieved to overcome their high cost base – a transformation that I’m glad EI has taken part in. The trick is continual, small improvements by everybody on the team.

Nobody knows what best way to run a Saas business – even the best, such as SalesForce.com and Google are still learning. We in EI would like to help you on that journey towards a leaner , more customer focussed team. We’ll be learning t0o, but with a range of training and supports to help you get there quicker and faster.

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Related posts:

1. Software Company Profiles (pdf)