Mobile Engagement Providers Are A New $32.4 Billion Market By 2018

Ted Schadler
My colleague and friend John McCarthy and I have just published a new report on the emergence of a new category of vendors we call “mobile engagement providers” that help firms build excellent mobile experiences. I’ll unpack the report in a series of posts over the next few weeks. You can also read a lengthy post in the Wall Street Journal highlighting the report and Forrester clients can read the full report.
 
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Building and delivering great mobile experiences will be the beating heart of your customer engagement strategy for the next 10 years. The challenge of making a simple, intuitive app that fronts a complex system of engagement will stretch the abilities and swamp the resources of most firms. For help, firms increasingly turn to vendors that possess a connected portfolio of engagement competencies and management skills. 
 
The result will be a new market for mobile engagement providers that will grow to $32.4 billion by 2018 (see the Figure 1). No vendor can do all of this today, but suppliers from six categories — digital agencies, management consultancies, mobile specialists, product development specialists, systems integrators, and telcos — are chasing the prize. The payoff for vendors that make this investment will be to earn a seat at your table as a long-term partner in your engagement success.
 
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Wanted: Mobile Engagement Providers

Ted Schadler

Pal John McCarthy and I published a report on a new category of vendors that we call mobile engagement providers that have a "complete portfolio of engagement competencies and management skills to help you build and deliver great mobile experiences at global scale." This market will grow to $32.4 billion by 2018.

The Wall Street Journal's CIO Journal published this post from us today. It's long, but captures the key points.

I'll have more say later in the week. But for now, enjoy the post on WSJ!

How Does A CIO Build The Workplace Of The Future?

TJ Keitt

Anyone who's been following this blog knows that I've invested a lot of time recently laying out the case for why CIOs should take more ownership over employee engagement and workforce experience. With the foundational argument in place, it's now time to turn to the critical question: How should an IT department act? This can be a paralyzing question because owning the workforce experience means IT leaders must step outside of traditional technology provisioning and maintenance roles. That's why the path forward for IT leaders is to implement a series of changes in how they view themselves, employees, and the technology landscape:

  • Pivot benchmarks to account for engagement's link with IT satisfaction. Traditional IT benchmarks concern the performance of the infrastructure and employees' satisfaction with the service they receive. These are indeed important measures, but they do not give a complete view of how technology helps engage employees. We recently published our benchmarks for workforce experience that lay out what CIOs should be evaluating in addition to their customary metrics. These include employee engagement measures, employee technology attitudes, where employees learn about technology and how IT plans align with employee expectations. Evaluating both IT and the workforce in such a fashion requires the buy-in of executives, particularly the head of HR who traditionally owns employee engagement and satisfaction surveys.
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US Tech Market Getting Stronger: US Q2 2013 GDP Report And Data Revisions Show Weak But Improving US Economy, And Better Tech

Andrew Bartels

The US Bureau of Economic Analysis released its preliminary report on second quarter 2013 US GDP, along with both major revisions to US economic data over the past 50 years, and minor revisions to the data on US business investment in information technology goods and services.  Here are my key takeaways from the report, and its implications for the US tech market.

  • US real GDP growth in Q2 2013 came in better than expected.  The 1.7% growth at an annual rate from Q1 2013 was in line with our projection of 1.9%, but better than what many economists had been forecasting.  Growth rates in Q4 2012 and Q1 2013 were revised down to 0.1% and 1.1%, respectively, from the earlier 0.4% and 2.5%.  These revisions indicate that the end of the payroll tax reductions, the higher tax rates for high-income people, and the Federal budget cuts from sequester did take a toll on economic growth, with government consumption declining in Q4 2012, Q1 2013, and Q2 2013, and business investment in factories and offices falling in Q1 2013.  But consumer spending has been solid, with growth of 1.8% in Q2 2013, 2.3% in Q1 2013, and 1.7% in Q2 2013.  Business investment in equipment, which softened to just 1.6% growth in Q1 2013, improved to 6.8% growth in Q2 2013.  And housing continues to be a growth engine for the US economy, with double digit growth rates in residential investment in the past four quarters, and improving home prices boosting consumer confidence and spending.
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Cities, Don't Go It Alone. Service Providers Accelerate Smart City Projects.

Jennifer Belissent, Ph.D.

Local governments – cities, counties, states – are investing in technology.  Why?  Well, a number of factors drive local governments to take a smarter approach to their administration and development: limited budgets, increasing citizen demands, competition for investment and jobs etc. Balancing competing demands on a shoestring budget isn't easy.  City leaders are looking for ways to sustainably transformation city functions such as transportation, healthcare, public safety, utilities, or governance, and in aggregate the city as a whole. And, they increasingly value technology as a means to such a transformation. 

Fortunately, cities do not have to undertake this journey on their own, and they don’t expect to.  In fact, according to Forrester’s Forrsights Budgets and Priorities Tracker Survey, local governments are more likely to expect increases in IT technical consulting than other industries (and more than governments as a whole): 38% of local government IT budget decision-makers expected a 5-10% increase in consulting spend and 2% expected an increase of more than 10%.  Local governments are turning to the experts to help them figure out what this “smart city” thing means for them.

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The Expectation Gap Increases Between Business And IT Leaders

Dan Bieler

Business Technology (BT) is a means to an end. BT is there to support the business objectives. Similarly, the task of IT leaders is to provide the most appropriate technological infrastructure to all employees so that they can pursue the business objectives most effectively. In other words: IT and business leaders should have the same perspective.

Yet, new Forrester survey data indicates several gaps in opinion about network infrastructure aspects between business and IT leaders. We see a risk that IT will purchase network and collaboration assets that do not address the demand by business lines. Similarly, there is a risk that business lines remain unaware of network and collaboration assets that IT has put in place. Under both scenarios, businesses waste valuable resources and end up with an inefficient network and collaboration infrastructure.

Our new report The Expectation Gap Increases Between Business And IT Leaders helps sourcing vendor management professional define an IT and networking strategy that supports overall business goals. This report is a follow-up of our 2012 report, Prepare For The Connected Enterprise Now. Our main messages to business based on the survey results are to:

  • Drive communication infrastructure projects in collaboration with business and IT. Eight out of 10 IT and business leaders consider network and telecom technologies critical to driving staff productivity. Sourcing professionals should focus activities on driving the road map and jointly develop business cases.
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Orange Business Services Analyst Event 2013: The Cobbler Stickes To His Last

Jennifer Belissent, Ph.D.

With Brownlee Thomas, Ph.D., Bryan Wang, Dan BielerHenning Dransfeld, Ph.D., Clement Teo, Fred Giron, Michele Pelino, Ed Ferrara, Chris Sherman

In mid-July, several colleagues and I attended Orange's annual analyst event in Paris.  Our collective observations include:

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Telefonica Deutschland grabs top spot by buying E-Plus - but the real challenges remain the same

Dan Bieler

KPN has agreed to sell E-Plus to Telefónica Deutschland for an implied valuation of €8.1 billion. The transaction will combine the No. 3 and No. 4 carriers in the German mobile market to create the new No. 1 carrier based on a subscriber market share of 37% and 43 million subscribers  (although only a No. 3 based on a 32% revenue market share).

While the deal brings a variety of opportunities, Telefónica will still face an assortment of challenges:

  • Telefónica believes that the deal will unlock synergies of an estimated €5.0 billion to €5.5 billion. About 70% of these synergies will come from opex savings and 30% from capex savings. In addition to processes rationalisation and reduced SG&A expenses, financial, and tax synergies, a stronger competitive position from increased scale, site consolidation, and rationalisation will play a major role. Telefónica is planning to reduce around 14,000 sites. In total, about half of all opex synergies come from network-related savings. This form of network consolidation will be bad news for network infrastructure vendors like Nokia, Ericsson, and Huawei as consolidation hits the largest European market for network infrastructure.
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Understanding Gamification in APAC

Forrester's global analysts have written some great pieces on gamification. In general terms, this research is is just as applicable to the SE Asian markets. However, there are some specific differences within the region that should also be considered. The most important thing to remember is that, while the general principles of gamification definitely hold true within the region, there are still some specific differences that should also be taken into account.
 
First and foremost, we definitely see the same problems in APAC where a lack of clarity on the desired behaviour encourages game play - for games sake. This is probably the worst outcome of all for gamification initiatives, regardless of where they're deployed. If there's no clear desired behaviour change identified, there's absolutely no valid reason to introduce gamification. The real challenge though is ensuring that the right strategy is selected to achieve the right objectives.
 
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Orange Business Services Analyst Event 2013: The Cobbler Sticks To His Last

Dan Bieler

with Brownlee Thomas, Ph.D., Henning Dransfeld, Ph.D., Bryan Wang, Clement Teo, Fred Giron, Michele Pelino, Ed Ferrara, Chris Sherman, Jennifer Belissent, Ph.D.

Orange Business Services (Orange) recently hosted its annual analyst event in Paris. Our main observations are:

  • Orange accelerates programmes to get through tough market conditions. Orange’s’ vision in 2013 is essentially the same as the one communicated last year. However, new CEO Thierry Bonhomme is accelerating cost saving and cloud initiatives in light of tough global market conditions. The core portfolio was presented as connectivity, cloud services, communication-enable applications, as well as new workspace (i.e., mobile management and communication apps).
  • Orange proves its capability in network-based services and business continuity. Key assets are its global IP network and its network-based communications services capabilities. In this space, Orange remains a global leader. These assets form the basis for Orange taking on the role of orchestrator for network and comms services, capabilities that have (literally) weathered the storm, proving its strength in business continuity.
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