Two or three years ago, software buyers in the market for new and improved tools for managing website content and cross-channel digital customer experiences had a typical request: “Help me replace my legacy web content management system with a new web content management system.” It was out with the old, legacy, hard to use system, and in with a new solution that perhaps had a few new capabilities, but which still looked and felt like… a web content management system.
As we approach 2014, that WCM buyer is asking for a whole lot more. Enter the digital experience platform – an emerging software category poised for takeoff as enterprises seek to differentiate through better digital customer experiences.
Forrester has defined the digital customer experience platform and 14 specific tools and capabilities in our TechRadar report for application development and delivery pros.
We took the research further in another recent report, a Market Overview report covering digital customer experience delivery platforms. This reports describes 17 representative software vendors and their offerings as they try to tackle this robust market with a diversity of capabilities; each has a different approach. Our research has identified players with heritage in four vendor categories: web content management (e.g. Acquia and Adobe), eCommerce (e.g. Demandware, Digital River), marketing solutions (e.g. Hubspot, Razorfish), and enterprise business software providers (IBM and Oracle).
Reflecting on 2013 (as one does on the last the day of the year …), I’m struck by how much I seem to be living in two parallel universes: a promised land of appropriately targeted marketing, personalized offerings, courteous and efficient customer service, timely and accurate information – you get the picture; and the real world, in which the gap between the promise and what’s being delivered seems, if anything, to be widening.
Admittedly, my research focus on business intelligence, analytics and big data no doubt heightens my awareness, as I’m forever looking for signs that the technologies that are available have actually been deployed. Sadly, a lot of the time I find that even companies with flagship projects involving advanced analytics manage to undo much of the good work by falling down on something very basic, such as getting my name right, or knowing which products I’ve actually purchased.
In case my point needs proving, I’ll start by taking a light-hearted look at a few examples of what I’m talking about, before suggesting a few New Year’s resolutions to all those companies whose claims about customer-centricity and superior service are being contradicted by reality:
The major UK retailer which keeps addressing me as “Mr”, has repeatedly assured me that the matter has been addressed, and which resorts to offering me flowers when I point out – again – that all my mailings are still addressed to “Mr Bennett”. Almost enough to give me an identity crisis.
The global bank whose customer I’ve been since 1997, but which I’ve been unable to convince for a number of years now that there is only one Martha Bennett. Definitely enough to give me an identity crisis!
With 2013 coming to an end, it’s time to bring out the crystal ball and make some predictions about 2014. Those who follow Forrester’s research will know that we’re living in the age of the customer, a period in which customer obsession will be the key to winning in all markets. Computing is a critical technology element in the age of the customer: The use of tablets by sales professionals creates richer experiences for prospects and customers, even as the use of wearable technologies by health professionals helps phlebotomists find the vein in a patient’s arm more quickly. Computing is a front-line, customer facing experience that helps companies win and serve customers more effectively.
With that context in mind, I present six meta-trends that will be critical for computing in 2014:
Data center procurement approaches have significantly changed in the past five years. While many CIOs are following a cloud-first approach to commissioning new services, most enterprises struggle to move the majority of their infrastructure to public clouds due to application interdependencies and legacy infrastructure silos.
As profiled in my recently published case study, in 2008 News UK was one of a few news media companies embarking on infrastructure transformation. The firm’s data center transformation delivered a modern, agile, lean, and resilient infrastructure in a colocated data center with automated disaster recovery and business continuity. The case study highlights the significance of migration and consolidation as a step towards collocating your data center or migrating services to the cloud. Below are some highlights from the report:
Transformation areas: virtualization, compute, storage, and network. News UK had an aggressive timetable to review public cloud offerings and make strategic investments to help it smoothly transition to delivering IT infrastructure via the public cloud. The firm considered all aspects of IT infrastructure delivery and implemented the latest technologies to achieve its transformation goals. Key areas of focus included virtualization, compute and operating systems, and storage and networking.
As research for my upcoming report on cloud adoption among banks in Asia Pacific (AP), I’ve spent the past several months interviewing senior IT and business decision makers at banks and other financial institutions across the region. I’ve also met with banking regulators and spoken with cloud providers with a strong AP presence. Look for the full report early in the new year. In the meantime, I wanted to share some key findings.
Cloud adoption is among the top priorities for most banks in the region. In fact, contrary to popular belief, I’d categorize cloud adoption as nearly mainstream among banks in many parts of Asia Pacific. But adoption drivers vary based on the cloud approach. Private cloud initiatives, for instance, centered on data center transformation to drive improved operational efficiency and cost savings. Public cloud initiatives typically focus on expanding mobile banking capabilities and other customer-facing systems of engagement — the key to customer retention and overall growth.
Delivering great multichannel digital experiences isn't as easy as plugging in new software and calling it a day. Digital customer experience success comes from combining many elements: a big-picture vision, short- and long-term strategic planning, shifts in roles and responsibilities, and intelligent technology adoption and delivery. For application development and delivery (AD&D) pros and their business peers, the digital customer experience technology market matters because digital experience matters — both to organizations and to their customers. As your organization marches toward digital experience delivery, you must place technologies in their proper context.
It will be an integration--not a suite--story. Many vendors promise a comprehensive customer experience management technology suite. But supporting customer experience is a broad discipline that includes everything from your contact center technologies to your marketing suites to the technologies that power your website. Right now, no one vendor has every single component — despite what they may claim. And even if they did, the vast majority of Forrester clients we speak with don't have the resources to rip and replace their existing investments, nor do they have the desire to be married to one vendor. Firms will instead look to best of breed vendors that are able to easily integrate with other solutions.
These devices are starting to find their way into the hands of consumers, but much of the retail channel has yet to catch up. Smart locks, smart wearables, and smart fitness devices are all generally being sold through the traditional online and offline channels for electronics and devices; sports stores, clothing retailers, and home hardware stores have been slow on the uptake. In the US, we have already seen some electronics retailers (such as Best Buy) significantly expand their “smart wearables” section from a small pod to an entire aisle or even a dedicated corner or section of the store. At the same time, many sports stores have not even started carrying the latest fitness tracking devices — something that should be in their sweet spot.
Following my research on software asset enabled services, I will start a new research stream in 2014 focused on business services: a new breed of managed services leveraging software assets, BPM and analytics focused on delivering business outcomes to clients. This post introduces this research and summarizes the drivers and enablers of such business services.
As organizations enter the age of the customer we see business leaders controlling more of the technology purchases. But as their business processes become more technology dependent I believe they will move away from technology sourcing to pursue business capabilities such as digital customer engagement. For example, Forrester recently learned of a vice president of online channels at a luxury brand who decided to leverage a mobile center of excellence from an external managed service provider to help the brand accelerate its revenue growth in a multichannel environment. As business decision-makers look to build capabilities that help improve business outcomes, I believe that they will move away from procuring technology to sourcing a new breed of managed services to complement their strategic capabilities. This new breed of services will combine:
Often I hear from clients or read in industry publications (including those by my Forrester colleagues) that the business is spending more on technology. They almost always refer to this spend as “rogue” or “shadow.” But this phrasing shows a perspective from sourcing and other IT professionals that is parochial and, worse, dangerous to their ability to collaborate with those business stakeholders.
Why? Because saying that the business’ IT spend is shadow spend implies that they are taking something from the IT group. However, the reality of the situation is that business buyers like CMOs are buying what they always bought – advertising, marketing tools, database list management, for example. The difference now is that all of those things are now technology-dependent. Any CMO or other executive buying these offerings has a very logical question when asked about bringing in IT – “what makes IT think they know more about this stuff than I do?"
Still not sure if the business is actually engaging in “shadow IT spend?” Here are a few questions to ask yourself:
Is this a product category or supplier IT has experience with? Most IT SVM teams haven’t negotiated with digital agencies like Ogilvy or TribalDDB before. Also, note that if it’s a division you haven’t worked with, the answer to this question is still “no.” – such as when your company’s supply chain team is working with PwC’s risk team – but you’ve only ever worked with PwC’s IT strategy group. This then validates the business users’ view that they’re better placed than IT SVM to do the negotiation because of their knowledge of the vendor and its solution.
Before jumping into the Healthcare.gov case study, I wanted to highlight an announcement that was overshadowed by the press surrounding the Healthcare.gov story: Verizon Compute Cloud & Verizon Storage Cloud. Verizon made a signifcant announcement regarding its new public cloud solution that veered away from its original "enterprise cloud" messaging and towards a commodity based approach. With this approach Verizon looks to compete more directly with the likes of Amazon Web Services (AWS) by providing the same low cost for baseline products but with higher levels of performance. Rackspace recently announced its Rackspace Cloud Servers product with this same goal, although this was likely motivated by CloudSpectator's report published earlier in 2013. Rackspace used this opportunity to step up to the plate. Performance is a rising complex issue that makes "Let's just move it to the cloud" beyond an overly simplified statement. With that said, here's the overview from what I've seen this far: