Nintex is expanding into the emerging cloud-based workflow market — by acquiring Drawloop, an Irvine, California-based document generation provider: http://www.nintex.com/company/news-press/news-archive/2015/nintex-acquires-drawloop. Drawloop is one of the top 10 paid apps in the Salesforce AppExchange, with more than 1,000 customers, yet relative to the core customer communications management (CCM) market that has matured in a batch world driven by large-print service-bureau requirements, it is an effective but "light" solution. It gets high marks for usability, where less often means more. And you are fine if all data comes out of Salesforce, but what if you need to combine it with other data from core systems? What if you have 10,000 templates to manage, and what if you need to visualize complex data associations or have large batches of documents to deliver routinely? We will look harder at these questions during the next CCM Forrester Wave™, which will include Drawloop as well as Conga and perhaps other emerging cloud solutions. Overall, this is a strong acquisition that positions Nintex's BPM capability more securely in the Microsoft and Salesforce cloud ecosystems.
This latest Lexmark move is harder to assess than previous major acquisitions. Give the Perceptive acquisition an A, Brainware a B -, and Pallas maybe a C+. The Kofax merger, on the other hand, has two legitimate views and lets start with the positive. Kofax has indeed assembled a range of complimentary components that fit well with Lexmark's market ambition. The key asset of interest is the TotalAgility (KTA) platform and its related components. These enhance Lexmark's process platform that was based on the Pallas, too low a market share and Perceptive’s document-focused workflow. KTA, by contrast, has a true case platform and is well integrated with the industry-leading capture platform. Kofax has never had been in the ECM space. They are now with one of the strongest. And the list goes on. Brainware will boost forms processing for Kofax' invoice processing customers. The AltoSoft BI tool adds analytics strength that Lexmark did not have. Data integration is improved with Kapow. A top E-Signature product (Softpro) and a growing CCM platform from AiA are all good pickups. These last two fit well with Lexmark’s transitioning MPS business.
The drawback here is that Kofax’s go to market positioning and execution is nowhere near complete, and needs entrepreneurial energy and execution to get there. Perhaps Lexmark can help - but Kofax will now be part of a larger company that has transition issues of its own. Perhaps more importantly, Lexmark may find itself devoting significant investment dollars to purchase a legacy document capture business that has moderate long term value. We estimate around $200m of Kofax’ current business derives from this market with revenue in this area more likely to decline then accelerate. Lexmark would then find itself devoting a lot of management attention to minimizing the impact of that decline.
Somewhat lost in the discussion of HP splitting into two is whether breaking into smaller companies is an unstoppable trend in the tech sector. HP plans to break itself apart, creating two approximately $60 billion, publicly owned, global companies. No one would consider these small. Companies at a certain size just can't execute at the speed of digital customers today. Heres our take on why.
Marc Adreessen made the point well at Dreamforce last week. He basically said that tech companies are different from others in that their product is really innovation. The products driving revenue today will be different in three years or less. By contrast, the Campbell Soup Company made soup 50 years ago, and while they may acquire other retail food companies, they will still be selling soup 50 years from now.
During the internet bubble of 2000, many of us predicted E-delivery of business content would reach a 40% to 50% adoption within a few years. Here we are now almost 15 years later and it still hovers around 20%. How can this still be true in 2014? Enterprises want print to become a secondary channel because it's less expensive. They form committees to ensure output from core systems is consistent, compliant, and adds to the customer experience. Stymied by low adoption rates — except in specific demographics, such as online brokerage and banking — many enterprises have lost enthusiasm for aggressively prioritizing digital adoption. And it's hard to blame them.
Unfortunately, we are the problem. We do not link paper usage with carbon contribution, don't trust our institutions, or are just are afraid of missing a payment unless the bill lands in the mailbox. Despite the plethora of smart devices, pervasive video, and social media that allow us to interact easily with customer service agents, pass information digitally, and complete business transactions on-the-run, we still hold on to paper delivery. I discuss the reasons for this here and what firms can do about it.
There are a few well-engineered products out of Stuttgart, Germany — Mercedes-Benz, an oft-visited tourist stop, is one. Another good Stuttgart product: SoftPro’s E-signature solution. Its strengths lie in its use of biometrics for image verification, particularly the SignAlyze product, a signature verification tool used extensively by German banks. SoftPro has a strong global presence outside of the US and solid banking accounts, all delivered with the kind of engineering foundation you would expect. The acquisition will help Kofax a lot, as it is virtually unknown in the US, with marketing and strategy behind the market leaders, and it has been slow to enter the trending SaaS market. In addition, SoftPro’s shortfalls in selected areas compared to the broader field, such as workflow and analytics, can be quickly plugged with the Kofax Total Agility BPM platform.
All in all, the SoftPro acquisition enhances Kofax’s competitive position in the smart process application category. E-signature also adds to Kofax’s portfolio for capture, process automation, analytics, and mobility to address key requirements for the rapidly growing need to automate and digitize document-centric applications. Kofax talks a lot about the first mile, but now can have deeper conversations about that last mile — where something needs to be signed.
Vacation is a good time to read things that you can never get to while working. My list is quite long but I scanned it and took a copy of “The ZERO Marginal Cost Society” by Jeremy Rifkin to the beach. Now Forrester has a lot of focus on digital disruption, helping enterprises avoid being disrupted by new digitally based business models. We write about business agility, how to drive better customer experiences through mobile, social, and cloud. But we pretty much stop at what disruption means to an enterprise, as these are our clients.
Jeremy Rifkin takes the digital disruption concept to its ultimate end state, and projects the effect on the entire economic system. He paints a somewhat murky but thought provoking picture of where this all leads. The basic idea? Digital alternatives, fueled by the Internet of things, big data, the sharing economy, 3D printing, AI and analytics, will drive the marginal cost of producing a product or service to near 0 and this disrupts the entire capitalist system. Established companies can't generate profit, emerging companies can only maintain temporary advantage, and people don’t have “real jobs” anymore. They ride the wave that he calls “the democratization of innovation” that works outside of traditional business and government.
Banks are burdened with sizable infrastructure, struggle to service traditional and emerging channels, are severely boxed in by increasing compliance demands, and are not particularly nimble — also due to overly seasoned business applications. At the same time, the banking industry is ripe for digital disruption, as banks’ traditional strengths of size and breadth aren’t sufficient to ward off a mix of alternate financial service digital disruptors such as Google, new digital banks, emerging payment networks, and traditional institutions like Wal-Mart entering this market.
Business agility will be their most fundamental strength and competitive weapon. But how do leading banks today compare on agility? We surveyed 30 banks and determined that high performers excelled in market agility dimensions. We then ranked US banks using customer experience and product expansion scores. This report is due out this month so stay tuned.
The ability to sense and execute on change are essential qualities of a digital business in today’s marketplace.
Don’t believe me? Consider this: 70% of the companies that were on the Global 500 list a mere 10 years ago have now vanished – unable to adapt. In those 10 years we’ve seen digital disruption change the business landscape. We’ve watched the Internet become pervasive, embraced cloud-based applications that update multiple times a year, acquired mobile devices that connect everywhere in the neighborhood and around the globe, and embraced information workers who use their own tools to do corporate work on their own time.
We recently surveyed 300 global businesses to dig deeply into how prepared – in the sense of being agile – they are for types of events and business changes that the new digital age will bring. And, our findings were not surprising. High performing organizations are flattening to deal with rapid change. They are using knowledge creation and dissemination to drive decisions lower in the organization, and redefining the role of the CEO. Organizational agility, characterized by high awareness and execution in knowledge dissemination, change management and digital psychology agility dimensions, drives significant performance for enterprises.
My keynote session at our Forum for Technology Management Leaders in London (June 12-13) on the topic will highlight organizations that have made market, organizational, and process changes based on digital strategies to become more agile, more productive, and grow revenues. I hope to see you there.
Lexmark’s acquisition of Readsoft is part of a continued effort at Lexmark to balance mature and stable printer HW revenues with faster growing software and services businesses. This acquisition is one of many in the last two years, and is consistent with consolidation in the mature capture and content market. And it works for me.
Readsoft provides more software depth in Europe then Lexmark has, and is stronger than Lexmark in financial process automation (purchase –to-pay and order-to cash although mostly the former) with strong integration with SAP and other ERP vendors. Perceptive Software, the core technology within Lexmark’s software division, is more content then transaction oriented, a strength that Readsoft adds.
There is also synergy across analytics. For example, Brainware, acquired by Lexmark, is very strong in analytics for forms processing – one of these being invoices. This should add smarts to ReadSofts front end.
As always, success is determined by how integration talks place over time and whether an integrated platform can emerge with minimal customer disruption. It would be good to see acquisiions in the services area to more quickly balance revenue with the tradition business.
It hit me the other day when I was speaking with a call center operator about my reservation. She was funny, smart, well informed and flew around her app. with the quickness of the chipmunk. She is the new breed of worker. Not the production worker that performs repetitive tasks, like data entry and responding to the same dumb information requests, anxious to get you off the phone to meet a call duration metric. No, our relentless offshoring, automation, and customer self-service is slowly eliminating this type of worker.
We hear numbers like this consistently, and this from a Workforce Planning VP at a major Major Telecommunications company,
“Today 70% of our inquiries are handled by self service (IVR, Web, or mobile) with only 30% that ever get to our call center. But these calls that get through are really hard. The customer has researched the problem on line and is ready to have a deep conversation. So unfortunately, even though the call volumes are way down, the number of agents we need has not decreased due to how complex these calls are. "
What does this mean for enterprises? High performance will be achieved supporting these workers with advanced information management and solutions like Dynamic Case Management that give them freedom to make decisions and advance the customer experience.
We will shortly publish a wave on DCM. Look for some new European solutions like BeInformed (Netherlands), Whitestein (Germany), and ISIS (Austria) to gain ground on PegaSystems, IBM, EMC, Appian and others from the traditional BPM market.