Revisiting the Hertz $32-million dollar website disaster

At the time this news broke, myself (and every other WCM vendor that wasn’t Adobe) were inhaling sharply, thanking our lucky stars it wasn’t our software or client. Now, to be fair, Adobe AEM is a well-regarded platform. Was it right for this client? Maybe. But far too often the technology is thought to have an outsized influence on success or failure, when this is rarely, if ever, the case. In my distant past, I was part of a great internal team that was able to extend and customize an outdated, legacy, platform to great effect for a top-notch marketing funnel – similarly, the opposite is true in that simply buying the market leader and largest system integrator does not guarantee success (clearly).

Dom Nicastro of CMS Wire wrote an article with Scott Liewehr and did a stellar job covering some excellent points, but I’d like to focus and expand on a handful, which I consider paramount:

Have your own team in place

A company the size of Hertz, which depends on direct booking for a substantial portion of revenues should not have had such a reliance on an external vendor. Period. Some red flags, (direct from the lawsuit):

  • Hertz did not have the internal expertise or resources to execute such a massive undertaking; it needed to partner with a world-class technology services firm. “
  • “Hertz relied on Accenture’s claimed expertise in implementing such a digital transformation. Accenture served as the overall project manager. Accenture gathered Hertz’s requirements and then developed a design to implement those requirements. Accenture served as the product owner, and Accenture, not Hertz, decided whether the design met Hertz’s requirements.
  • “During the course of Phase 1, Hertz provided Accenture with detailed information about Hertz’s existing IT systems’ business requirements. The work product created during Phase 1 included the Solution Blueprint, a “Delivery Plan,” and “Architecture Specifications” that were intended to structure Accenture’s subsequent development and deployment of the new technology platform, website, and suite of mobile applications. Hertz paid Accenture nearly $7 million for these services and deliverables. ” and later “Accenture’s team struggled to understand the back-end systems and apparently had difficulty programming the software used for the integration layer. “

There was a Phase 1 (planing, understanding) and a Phase 2 (implementation). Phase 1 should have never gone to an external vendor, especially where they “served as the product owner, and […] decided whether the design met Hertz’s requirements.” – the main reason is this; all the work done in Phase 1 is mission-critical, corporate knowledge, competitive differentiator stuff. These, above any visual design, mobile app, etc., are the things that you will be living with forever. This means maintenance and continual revamping as Customer Experience expectations demand new integrations and methods. And as such, you need to own it fully. This includes knowledge of the working systems and accountability and Hertz abdicated both in this case. For a fraction of $7 million dollars, Hertz could have built a very solid core team to be accountable for this work – especially in Estero, Florida (where they are headquartered). In fact, it’s easier than ever to lure frustrated millennials and gen-Xers away from frantic and overpriced tech markets for the promise of a detached house with an actual backyard. You can pay them well above average and retention will be super-high and you will still come out ahead compared to outsourcing. I know of plenty of folks who have done moves like NYC to Syracuse and are gloriously happy (in that case it was the company smart enough to “outsource” their own employees they trust to a cheaper locale).

The rule of thumb; don’t outsource anything that is mission-critical or a competitive differentiator. After the website work is done, there is still the day-to-day program operational work and endless iterations which will result from a customer-centric practice. You can easily imagine things like new payment types, rental options, tie-in to bookings systems, etc. and all of these are foundational and demanding of a core team, and not merely bits of design or consulting work that can be done as a one-off. As well, if you are outsourcing a competitive differentiator, who is to say that your system integrator isn’t going to use that experience to make a beautiful case study to shop to your competitors. In fact, I guarantee it – and the more successful the project is, the more likely that expertise gets touted and shopped around. Even if you retain rights to the code itself, the actual expertise and understanding is just as valuable, if not more so.

Running Agile

Well, let’s be honest, running Agile wouldn’t have saved this project – since key oversight roles (Product Owner, User Acceptance) were also the developer on the project – but done right, it would have accomplished two things for Hertz;

  • More firmly understood the scope. When you start getting into the weeds and putting estimates to what needs to be done, and then working back, it can sometimes be a bit of a reckoning. Often for a large project there is a feeling of time being a giant bucket and “we can make it up later” – by identifying tasks and stories, and sizing up-front the scope becomes clearer and similarly any project timeline deviation is found very quickly in the process.
  • More firmly understood the status. It seemed from the lawsuit that they were surprised when at the end of the process major elements were missing. There seemed to be this long and mysterious gap between the scope and the deliverable, typical of waterfall-type project management.

Don’t ignore the nay-sayers

This is cultural issue more than anything. Often there is a tendency to assume everything is going to work out just fine, and in many cultures there is a trait to avoid discussing future negative consequences at the risk of being seen as a naysayer or “not a team player”. I would tend to argue for the opposite – plan in advance to have contingencies in place if things go off the rails; a “pre-mortem” (HBR, “Performing a Project Premortem”). This would include understanding;

  • What does failure look like? What does it cost? What are the key critical areas which must succeed? If the cost of failure is extremely high (i.e. not just wasting $32 million on the website, but the potential cost of untold millions in lost bookings during the holiday season?) then justifying spending money on contingency planning (more oversight, ability to bring in additional teams, cancel contracts, change technologies, etc.) becomes second-nature in large projects.

This has the added advantage of being slightly more “emotion-free” as potential problems and contingencies are discussed well before peoples careers and decisions are called into question.

Be sure to get the biographies of the team members

It’s not enough to pick a large, reputable company and assume you’ll get the A-team by default. Here’s a great example; By their own marketing material, Avanade has 11 Sitecore MVPs, “900-plus Sitecore-certified developers” and “1,300 trained Sitecore specialists” – by process of elimination this means about 400 (or 30%) of their developers aren’t certified. That’s quite a spread of talent. This isn’t necessarily a show-stopper – there are perfectly good reasons to go with larger firms, including wider skillset, geographical reach, ability to spread costs across geographies (there are often many “grunt work” tasks like migration which should be cheaper and done by less skilled employees). But you want to make sure you’ve got a good mix in the team on your project, ensuring that senior folks (i.e. 2-3+ successful, referenceable, projects) are involved. Similarly, if people are changing mid-way through the project, ensure you have the same information (and potential veto/contingency) on their replacements.

Of course, there are also entire firms who I would recommend without reservation – but these tend to be smaller and niche. Also, as a rule they are usually very busy, and more than likely not in your geography. And being smaller, busy, and not in your geography means they are more than likely to be in a position to turn away work. It’s a sad truth, but they probably would have seen the lack of planning and expertise being displayed by Hertz and probably walked away (and had a good chuckle at the pub afterwards). These firms don’t look at inexperienced clients with the aim of parting a fool from their money – they simply don’t want the heartache and hassle, so you need to have your own house in order.

So you are often in a quandary with regards to sourcing external partners, balancing requirements and availability. I would suggest engaging a firm like Digital Clarity Group to objectively assist in finding a partner (full disclosure, I have worked with DCG and their VOCalis service in the past and found the results very useful).

Predictions for 2020

Two analyst firms have put out some predictions for the future of WCM earlier this year;

I’m going to outline my 2020 predictions for the market – a little early as I want to get a head start. I reference both firms above because in a lot of cases, I agree with the thinking. In fact, much of the “agile CMS” manifesto from Mark Grannan was very similar to some of the underlying strategy behind the Stylelabs acquisition and some of the CMP integration roadmap. That said, I don’t want to repeat what’s been said already, so here are my (hopefully distinct) observations.

Vendor and category blur intensifies

All sorts of weird and wonderful things are happening to martech, but the biggest one of consequence is the overall level of market confusion that businesses will have to contend with. WCM is getting both bigger (continually adding chunks of CDP, adtech, marketing automation, etc.) and smaller (headless, SaaS solutions such as HubSpot CMS and Wix.com). Questions around cloud (IaaS, PaaS, single-tenant SaaS, multi-tenant SaaS, static-site generation, front-end JavaScript, CDNs, Netlify, Gatsby.js, etc. etc. etc.), subscription vs. perpetual and pretty much every combination add to the level of confusion.

CDP as a standalone category first struggled to differentiate itself from DMP (good article from Martin Kihn, formerly of Gartner, now at Salesforce), and now has to contend with being absorbed by marketing cloud platforms, WCM and CRM vendors (did I mention Martin Kihn was now at Salesforce? What a co-incidence…). For various reasons (mostly to do with some big-data buzzwords) the CDP category has massively exploded well beyond the ability for the market to carry it (expect a blog post on that one).

Similarly, WCM will start to get absorbed into larger marketing clouds. Salesforce has a CMS beta in Community Cloud where many of the other functions (CDP, personalization, user management, marketing automation, etc.) will already live in those clouds, similarly SAP is also making a concerted effort around CX – their current offering (formerly Hybris) plus Gigya give them a solid base. I am far less sure of the value the Qualtrics acquisition brings to the play (especially at a 20x valuation) – unless it’s akin to the Microsoft acquisition of Groove networks (buying people and culture – namely folks like Ray Ozzie who became the CTO and ultimately laid the groundwork for cultural transformation and cloud).

CMP consolidating or being subsumed into adjacent technologies

The core functions of a Content Marketing Platform; collaboration, curation, campaign planning and content strategy/funnel mapping are functions that should have been WCM for quite some time. I wrote a longer post here, but in summary, the need for CMP will accelerate, but the sector itself will face some revenue/growth challenges and consolidation.

Adtech vs. martech replacing the old IT vs. Marketing battleground

The main source of “creative tension” in WCM has always been characterized by the relationship between IT and the marketing organization. WCM used to be almost solely the domain of IT; it was a lot of infrastructure to get up and running and IT would treat the deployment of content much like handling support tickets, which of course was not tenable. While there are still many IT-centric WCM systems – and IT still has a veto over technology choices – it could be argued that marketing is now firmly in the driver’s seat as customer experience drives more budget and purchasing decisions.

The new battleground for budget and attention will be adtech vs. martech. Recently, Jason Fried of Basecamp tweeted a well-known but interesting point about the fact that competitors can buy up keywords of your company/product name. This and the more obvious point about the fact that buying keywords is easy – there are fewer and fewer opportunities for differentiation. Combine this with the general trend for consumers opting out of advertising means that lazy brand-building is no longer acceptable and that advertising as a model is at risk.

This of course means that the slack needs to be picked up by better customer experience, which is enabled by better customer journeys, and far better content marketing. Some example vendors doing a great job of this;

SaaS takes over the WCM mid-market, but not the enterprise

This has actually been happening for quite some time – WordPress is basically a SaaS offering in most contexts (PHP is easy to deploy and customize in real-time, either on their own or your hosting platform) and you need only look at it’s prevalence in the Stackie Awards year-over-year to see that WordPress is pretty prevalent here, even among customers with greater marketing needs (the business logic is offloaded to other integrated systems).

What is new in 2019 is that in some stacks, there is no specific callout for WCM at all. Often you will simply see a reference to HubSpot or Salesforce Marketing cloud. Similarly, in Commerce you are often seeing Shopify own a large segment of the market where lower Gross Merchandise Value (GMV) makes it simpler to use this as an option.

(PS – as per Shopify’s 40-F – they rely solely on Stripe as a payment provider. How long before these two shack up and own both online and PoS channels?)

However, at the enterprise space, most customers still have strong integration/customization requirements. In some cases, legislation may mandate an on-prem solution, or they are tied to legacy back-end systems. And even where these requirements don’t exist, the vendors servicing those markets are tied to some legacy stacks and the sheer amount of functionality makes it hard to migrate. Adobe and others are making managed services far easier, but this is still not quite a true SaaS play yet. Only one vendor (to my knowledge) has successfully undergone this transformation; Oracle led the trend in converting a “leading (but legacy) enterprise” stack with the old ATG commerce and spent a number of years in the wilderness dropping out of Forrester leader position and only recently returning to market leadership with a full refactoring of Oracle Commerce Cloud (but notably also retaining IaaS/PaaS/on-prem flexibility with Oracle Commerce and much shared codebase). But even that required a number of years and considerable “market confusion” (as per Gartner) about the various offerings.

Wildcard bonus prediction: Adobe to (maybe) acquire some overlapping products

I’ve never quite got my head around the Adobe acquisition of Magento. AEM is a very enterprise-heavy, java-based WCM system. While I had predicted that Adobe would still buy a Commerce solution (despite having their long-standing and solid Hybris partnership stymied by SAP), I would not have guessed Magento. While Adobe had some open-source roots from Day, including elements like the Jackrabbit JCR and Sling being Apache projects, it is largely now a proprietary play with an emphasis on enterprise development and integration and not an open-source community or model.

In turn, Magento is a PHP-based system, with a mid-market and a still active open-source model. Some analysts have argued that Adobe wasn’t really acquiring the technology, they were acquiring the community, which I don’t disagree with. (It could have also been a spoiler to prevent Acquia from further deepening their partnership with Magento, all their other competitors at that level – namely Sitecore and Episerver – having eCommerce offerings themselves).

That said, they now have two very different products, markets and models to anchor their main Customer Experience entry points – so here’s my wildcard prediction: I think Adobe will still look to acquire a java-based Commerce system (my guess would be Elastic Path) to fit snugly with AEM and also look to either buy or build a WCM that is more appropriate to Magento and that mid-market/community-based audience.

There is certainly some precedent for acquiring and maintaining overlapping vendors; Adobe acquiring both Neolane and Marketo, Salesforce acquiring Demandware and Cloudcraze (not to mention owning Pardot, which they got by virtue of it being acquired by ExactTarget) – but at this point in the vendor musical chairs, there are fewer options that may make sense at the price (versus building), so I am actively hedging on this one. It may not happen, but I would be completely unsurprised if it did. But I do think that Adobe will have more trouble trying to push AEM down to mid-market (the architecture alone makes this difficult), so they need to do something drastic if they want to succeed in both markets.