The Top Twelve Customer Management Trends For 2011

As 2010 draws to a close, what are the key trends that customer management process professionals need to pay attention to as you finalize plans for next year?

Here are the top trends that I am tracking. My full report that spotlights our latest research will be published in January.

Trend 1: The Revenue Impact Of Poor Customer Experience Is Recognized
Our models
estimate that the revenue impact from a 10 percentage point improvement in a company's performance, as measured by Forrester’s Customer Experience Index Score (CxPi), could be in excess of a billion dollars. Poor performers are particularly weak in being able to orchestrate multichannel interactions.

Trend 2: Business Process Management Extends To The Front Office
By extending business process management (BPM) to the front office functions, customer service organizations will improve the consistency of service delivered, elevate agent efficiency, personalize service, and meet compliance goals — at a cost that makes sense to the business.

Trend 3: The Business Value Of Social Customer Engagement Becomes More Evident
Winners of Forrester’s annual Groundswell Award
spotlight how organizations are using Social Computing to innovate, such as: community-based marketing research techniques; engaging with customers through social media; energizing brand advocates; empowering communities to support customer self-service; and collaborating with customers during the product ideation and development process.

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The Global Software Market In Transformation: Findings From The Forrsights Software Survey, Q4 2010

Two months ago, we announced our upcoming Forrester Forrsights Software Survey, Q4 2010. Now the data is back from more than 2,400 respondents in North America and Europe and provides us with deep and sometimes surprising insights into the software market dynamics of today and the next 24 months.

We’d like to give you a sneak preview of interesting results around some of the most important trends in the software market: cloud computing integrated information technology, business intelligence, mobile strategy, and overall software budgets and buying preferences.

Companies Start To Invest More Into Innovation In 2011

After the recent recession, companies are starting to invest more in 2011, with 12% and 22% of companies planning to increase their software budgets by more than 10% or between 5% and 10%, respectively. At the same time, companies will invest a significant part of the additional budget into new solutions. While 50% of the total software budgets are still going into software operations and maintenance (Figure 1), this number has significantly dropped from 55% in 2010; spending on new software licenses will accordingly increase from 23% to 26% and custom-development budgets from 23% to 24% in 2011.

Cloud Computing Is Getting Serious

In this year’s survey, we have taken a much deeper look into companies’ strategies and plans around cloud computing besides simple adoption numbers. We have tested to what extent cloud computing makes its way from complementary services into business critical processes, replacing core applications and moving sensitive data into public clouds.

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Salesforce Shows That The Cloud Begins With The App

One of the face palm moments I had while researching PM's role in SaaS was the timeline for platform and app development. The traditional path for on-premise products was platform first, then application. The cloud products flip this sequence, putting the applications first, then the platform. We're so used to seeing this pattern that it's easy to take it for granted, or mistake the reasons why it exists (hence the face palm).

There were two reasons for this evolution in the natural history of a tech vendor's portfolio. The first is distance from the customer. In an on-premise world, where there's a lot of geographic and organizational distance between the producers and consumers of technology, the collection mechanisms about customer adoption (infrequent "How ya doin'?" conference calls, cryptic bug reports, etc.) are labor-intensive. For however much effort you put into this research, the information returned is often incomplete, distorted, or just plain wrong. For example, the game of Telephone played among product teams, customers, and the salespeople in between often leaves PMs with more questions than answers about what a customer really wants. 

Therefore, the product strategy for on-premise products have to accommodate a lot of uncertainty about how customers use the technology. While it's not the only reason for customization and custom application development, it's certainly an important one. Rather than guess wrong about customer adoption, on-premise vendors tend to say, "Here's a toolkit. Go build what you want."

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