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.
MyCustomer.com recently asked me what my thoughts were about CRM — why initial CRM projects failed, what has changed to make deployments successful, and what the future holds for CRM. Here is the third and last part of my answers, as well as a link to the published article.
Question: It has long been suggested that ‘CRM’ is becoming increasingly opaque, with some ‘CRM vendors’ sharing few common features. Lithium, for instance, is categorized by Gartner as a ‘Social CRM’ player yet has no sales or marketing functionality at all. Has CRM become too much of a ‘catch-all’ category in your opinion, and what are the dangers of this?
Answer: I think back to the situation that happened a decade ago when the new “e” (electronic) channels became available as customer service channels. There was now customer service, and eService. Fast-forward 10 years. Electronic channels are now just another way of servicing our customers. What matters more is for a company to provide a consistency of experience across the communication channels in order to reinforce and preserve the brand.
I see this happening with social CRM. Social is just another way of selling, marketing, and servicing your customers. The vendors in the CRM landscape will change, with a tremendous amount of consolidation in the vendors landscape. The communication channels will change, but the fundamental value proposition of a CRM system will remain intact.
Question: How do you envisage CRM will continue to evolve as a technology and category?
Organizations that use BI show increased (+5.7% from 2009) levels of maturity. However, most of the respondents still rate themselves below average on Forrester's BI maturity scale: 2.75 (on a scale of 1-5) for overall maturity, with the following details:
. . . most aspects of BI such as processes, architectures, and measurements of BI efficiency and effectiveness lag behind.
And (drum roll, please) the most interesting, and, I am sure, controversial finding is that Forrester’s predicted trend that Agile BI and BI self-service will trump centralization and consolidation has been confirmed. Here's the proof:
In 2010, 59% of the respondents said that they do not have a centralized BI competency solutions center, versus . . .
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.
What is the definition of an "application"? We are "applications development and delivery professionals" - surely we have this question nailed, don't we? The question keeps coming up in different contexts, and since there are many potential opinions, a blog is the perfect place to spur debate. Here are some (simplistic) questions to generate debate:
Is a Web page an application?
If not, how many Web pages does it take until I consider it an application - 10, 100, 1,000?
Does size matter? (Please behave yourselves with this one.)
Is the size of the code base a pertinent factor?
What about SharePoint sites, Access databases, and spreadsheets? Are they applications?
Where do COTS and packaged apps fit?
Does the technology I use affect the definition?
If I use a scripting language for a quick-and-dirty task, is that an application?
Does SOA erode the definition of an application?
Do we cease thinking about applications as entities and think about them more as containers that hold collections of SOA services?
How does open source affect the definition?
How does my role affect my perception of an application?
Do developers and users use similar definitions?
I have my opinions - in fact I just finished a draft piece of research on it that will be published in January, but what are your opinions?
In his report on the top technology trends to watch in 2011 to 2013, my colleague Gene Leganza called out application portfolio management (APM) as one of a number of "planning and analysis tools to manage the future." Forrester clients seem to agree with Gene; in fact they aren't even waiting until 2011 - their interest has been building steadily throughout the second half of 2010.
MyCustomer.com recently asked me what my thoughts were about CRM — why initial CRM projects failed, what has changed to make deployments successful, and what the future holds for CRM. Here is the second part of my answers, as well as a link to the published article.
Question: What has improved/changed to make CRM implementations more successful now?
Answer: My flip answer is that we’ve all grown up. Our technology has matured, we now have best practice processes to scope, implement, and deploy CRM systems, and we understand the organizational commitment and achieve the ROI that CRM has been promising us for the last decade.
A more factual answer is that CRM systems are now feature-rich, with best practice and industry-specific workflows built into them. This means that customers can choose to adopt these best practices without needing many man-months of customization work. The CRM architecture has evolved to make them immensely scalable, more easily integratable with other IT systems, as well as easily changeable to keep in step with changing business needs (think about all the mergers and acquisitions that have happened in the past several years, and the IT changes that have had to quickly happen to preserve the customer experience). There are also SaaS solutions available to achieve a rapid time-to-value, and we see a significant uptick in SaaS CRM adoption. Vendors and system integrators have a proven track record of deploying, tuning, and optimizing CRM projects to achieve quantifiable ROI, and this knowledge can be easily leveraged.
Question: What typically characterized a CRM project 10 years ago? And what do you believe typically characterizes a CRM project today?
For some time there have been rumors about Deutsche Banking having selected TCS BaNCS for some or all of its international subsidiaries. Today, both Deutsche Bankand Tata Consultancy Services (TCS)published a press release announcing that Deutsche Bank will implement TCS BaNCS Core Banking as its new core banking platform for Global Transaction Banking (GTB). The first international subsidiary, which is located in Abu Dhabi, went live three days ago. I discussed the deal with N. Ganapathy Subramaniam (NGS), the president of TCS Financial Solutions.
Are you interested in business intelligence, wonder about the future of the analytics market or have a question on advanced analytics technologies?
Then join the Forrester analysts Rob Karel, Boris Evelson, Clay Richardson, Gene Leganza, Noel Yuhanna, Leslie Owens, Suresh Vittal, William Frascarelli, David Frankland, Joe Stanhope, Zach Hofer-Shall, Henry Peyret and myself for an interactive TweetJam on Twitter about the state of advanced analytics on Wednesday, December 15th, 2010 from 12:00 p.m. – 1:00 p.m. EDT (18:00 – 19:00 CET) using the Twitter hashtag #dmjam. We’ll share the results of our recent research on the analytics market space and discuss how it will change with new technologies entering the scene and maturing over time.
Business intelligence is the fastest growing software market today as companies are driving business results based on deeper insights and better planning, and advanced analytics is the spearhead of BI technologies that can untap new dimensions of business performance. But what exactly is ‘advanced’ analytics, what technologies are available and how to efficiently use them?
Much more detailed information can be found in the blog of Forrester analyst James Kobielus who will lead us through the discussion during the TweetJam. Above you see an overview graphic listing the different elements of advanced analytics today, taken from his blog.
Here are some of the questions we want to debate during our TweetJam discussion:
What exactly is and isn’t advanced analytics?
What are the chief business applications of advanced analytics?
Our Q3 2010 Global Financial Services Architecture Online Survey shows that 79% of the surveyed financial services firms are either already working on transforming their application landscape or plan to start this effort by 2012 at the latest. The need for greater business agility and flexibility, new business capabilities, and improved ability to cope with changing markets, offer more differentiation, and increase market share are key drivers for a large share of these financial services firms.
Coping with these drivers requires a large amount of architectural flexibility; therefore, architectural flexibility needs to be an integral element of any decision in favor of or against a given architecture or off-the-shelf banking platform within a transformation initiative. Consequently, it does not come as a surprise that 43% of the surveyed firms expect that more than one-third of their business applications will leverage service-oriented architecture and use business services in the next 18 to 24 months and an additional 19% think that more than half of their applications will utilize business services within that time frame.