Cincom Systems: GST and STS Analysis of Enterprise Software

Introduction and Overview

The rapid pace of innovation and continual change in the enterprise software industry forces software companies to design, deliver, and support applications that can quickly react to changes in business conditions, processes, and products. The software industry is in many respects a microcosm of the broader industry dynamics of many others, as structural, economic, social, and technical challenges can quickly re-orient the direction of a business. Cincom Systems is a global provider of enterprise software applications and is the focus of this integrative project. Its organizational environment and structure are specifically designed to support prospects and customers through the complex process of validating and implementing enterprise software. The internal Cincom IT Department also faces significant challenges in staying current with technologies to support the global growth of the company.

The economic, social, and technical challenges Cincom Systems faces internally are similar to those faced by their customers. Continual economic uncertainty, the exponential growth of social media and networks including Facebook, Twitter, and others, and the technology challenges of creating next-generation enterprise software make time a very precious commodity within the company.

When the concepts and frameworks of General System Theory (GST) and Socio-Technical Theory (STS) are used to evaluate Cincom's culture, it becomes clear that the pursuit of knowledge is a core value of the company. The GST and STS frameworks are also critically important for understanding where Cincom excels and struggles in the areas of knowledge management and continual process improvement. The STS framework specifically reveals how critical it is to have roles defined within the organization that support and strengthen knowledge transfer and management over the long term. STS-based analysis of the company indicates that the alignment of social roles to critical success factors keeps Cincom focused on the highest-priority initiatives and programs. Cincom's progression on sociotechnical factors is slower than the average enterprise software company, yet the company achieves greater consensus once a decision has been reached. All of these factors contribute to a greater level of shared accountability and performance, and to the ability to retain customers over the long term despite significant competition in the enterprise software market.

The organizational successes and failures of Cincom, and the consequences of its decisions and strategies, have defined the company's current opportunities and threats and are shaping its future. Key successes include creating a highly profitable customer base whose members regularly pay a monthly maintenance charge of up to 22% of the purchase price of their software, maintaining a stable core management structure, and the ability to innovate rapidly on the Microsoft platform. The failures include attempts to move into new markets where Cincom has not had previous customer successes, a lack of insight into how to make Cloud Computing-based applications successful in manufacturing, and a lack of accountability for application performance in specific areas of the company. The consequences of these failures have been the gradual loss of customer confidence in the areas where Cincom has been weakest, most notably in document management and call centers.

Ironically, the internal CRM systems within Cincom are not as advanced as the ones the company sells to its core customers. For example, Cincom does not currently have a scalable Software-as-a-Service (SaaS) CRM application it can use internally to track all of its customer interactions.

Cincom Systems Organizational Environment and Structure

Cincom Systems is organized into five separate divisions, each concentrating on enterprise software applications and platforms. All of these divisions are integrated on a common Microsoft platform or protocol stack, ensuring a high level of integration and commonality across all product lines. This has helped Cincom compete effectively with Oracle, SAP, and others from the standpoint of a unified platform strategy, while demonstrating a high level of accountability to key prospects and buyers. Chief Information Officers (CIOs) are specifically interested in purchasing enterprise solutions only from companies that have a unified platform stack capable of ensuring high reliability and redundancy over time. Cincom's decision to build a unified architecture has helped attract and retain enterprise customers as a result.

The unified architecture has also allowed each business unit to concentrate closely and clearly on its core business, accurately defining the expectations and results achievable for key customers. The Cincom Manufacturing Business Systems (CMBS) division sells ERP systems to manufacturers, many of them members of the Fortune 500. The Acquire business unit sells a customizable quoting and product configuration system, and Cincom Synchrony sells a call center application suite. Cincom Smalltalk is a development organization that evangelizes the Smalltalk development language. The Cincom outsourcing services group sells services provided by the Indian subsidiary, which builds both internal and customer-sponsored applications. The mission of Cincom is to deliver up to a 30-times increase in value to customers who choose to standardize their businesses on its solutions. The culture is highly focused on analytics, metrics, and key performance indicators (KPIs), often measuring the overall performance of applications within customer sites. The best-performing companies rely on analytics, KPIs, and metrics to stay aligned to customers and ensure the success of initiatives (Conejero, Figueiredo, Garcia, Hernandez, & Jurado, 2011).

Organizational Structure and Decentralized Innovation

The structure of this organization is highly decentralized, with each business unit having a general manager and a series of directors responsible for marketing, sales, product management, and product development. Internal systems are specifically designed to allow for rapid information and knowledge sharing, further increasing innovation. The reliance on knowledge-sharing systems to support and enhance the development of innovation in firms shows significant potential to revolutionize enterprise software (Linke & Zerfass, 2011). This is exactly what Cincom is attempting to do with its intensive focus on knowledge sharing and collaboration, including its highly decentralized organizational structure and the relative freedom it grants development groups to pursue their own plans without being constrained by a single, overriding engineering and development team. This focus on decentralized innovation has made it possible for individual business units to respond rapidly to customer needs and market shifts, enabling a degree of agility that more centralized competitors often struggle to achieve.