In November 2013, we published a report laying out what will be the key points of differentiation between Google Apps and Microsoft Office 365 by 2016. At the core of this report is a simple message: The value of these cloud collaboration suites isn't inexpensive email; their value is in their role as an interaction point for your business ecosystem. And at the center of each of these interactions is content of some sort -- contracts, marketing collateral, product specifications, customer records, and more. As more of this content lands in Google Drive and SkyDrive Pro, the market will reward the vendor that makes it easiest for information workers to author content, share it with others, manage its use and distribution, and be aware of any changes to this content. We call this combination of capabilities content services.
When I interviewed clients for a recent telecom sourcing best practices report, I heard a recurring refrain: “We need to drive down costs.” Both CIOs and sourcing and vendor management (SVM) professionals measure the health of their department with the amount of annual cost savings they can achieve. While this is a laudable metric, over time it can skew SVM pros’ perspectives and cause them to miss an opportunity to provide value to the business in the form of a vital “always-on” service.
SVM pros should:
Accept that cost savings are limited and short-term. Telecommunications is highly regulated in Asia Pacific; local competition is limited and governments own significant stakes in incumbent telcos. While cost savings can be had, they will diminish over the lifespan of a contract. SVM pros must understand how to work with lines of business and suppliers to create more value for the organization.
Focus instead on always-on service availability. Firms must focus on the fundamentals: ensuring that their communications services push toward always-on service availability. Getting the right price for services is important, but SVM pros in Asia Pacific must align business needs to service sourcing and ensure that the service delivers the expected value in terms of availability and quality.
Engender trust with providers with long-term commitments. View service providers as long-term partners; this will take the uncertainty out of the relationship and engender trust. One company was happy to lock in a five-year rental with an equipment supplier, eliminating a source of business risk in a volatile Asian economy. Focusing on long-term contracts gives providers the impetus to serve you well.
The way we deploy software is changing. Our research and others shows that enterprises are moving away from on-premise apps. and moving to private and public cloud offerings. But here is the basic question that is seldom asked. When a company deploys to the cloud does that boost revenue and returns to stockholders? Are high performing companies separating from low performers by their knowledge of and use of cloud technologies? Our recent Business Agility study says clearly that they are not.
Let me give some context for this statement. Forrester is putting significant effort into Business Agility – what it is, how it relates to the success of companies within industries, and what foundations business agility is built on. We’ve identified the three types of agility that companies must develop -- Market, Organizational, and Process agility – and evaluate ten separate dimensions that make them up. We found out which of the ten dimensions were the most important, defined as driving growth in revenue and profit (see the Agility Performancereport).
And here’s the point. Infrastructure Elasticity – which is our agility dimension for all things cloud, accounted for almost no difference in enterprise performance. Enterprises aggressively embracing cloud solutions did not perform better than their peers. In fact in some industries, they performed worse.
A few months ago in my blog about Drake and Service Management, I hinted twice that I would talk later about how to measure success and how to change from a culture of speed. In the report “This Isn’t Your Grandfather’s Service Desk”, we have taken the research from our team that supports Customer Experience Professionals and applied it to the IT Service Desk. Forrester recommends that all IT service desks determine the Customer Experience Index (CXi) by taking a survey of business customers to test how effective (met the needs), easy, and enjoyable their interactions have been with the IT Service Desk over the past three months. By measuring the customer experience and coupling it with the metrics of speed traditionally collected, a true picture emerges of the success of an IT Service Desk. However, we found that only 1/3 of business customers are surveyed about their experience with the Service Desk whether it’s random surveys or surveys after each ticket. We can do better!!
If you haven’t started measuring the customer experience at your IT Service Desk, make a New Year’s resolution to start now (and I don’t mean one of those New Year’s resolutions that peter out about 2 weeks into the New Year!!!). Starting with a baseline will help you understand how you are progressing at customer experience and give you an understanding of what needs to be fixed in order to make the customer experience at the IT Service Desk even better.
What's the value of being able to operate at the peak of fitness and health? Is it less stress? Is it longer life? In an organizational sense, is it being able to change and adapt more easily? Is it being able to outperform your competitors in a race? Is it being able to set appropriate expectations for projects? Does organizational health lead to better longevity?
A recent crop of customer conversations prompted this line of thought. One customer asked how to prove the case for cultural change. Another wanted to quantify the value of successfully introducing a new set of IT systems. Another wanted to develop a solid business rationale for getting organizational functions to work together - to stop playing silo-oriented games where the chiefs fiercely protected their fiefdoms at the expense of the overall enterprise. Others have asked about project failure rates.
This prompted me to draw the analogy of trying to prove a negative. In one of those conversations, I found myself challenging the client to answer the question of quantifying not having functions work together; of not implementing change in a robust fashion. To be honest, this could have easily been any number of conversations over the last 6 months.
Really, these questions were about proving the ROI disciplined change. We have become so besotted by cost reduction, that we fail to see the value side of the equation (if productivity=value/resources). And while we might all agree it’s blatantly obvious that having organizational functions that work well together, and having successful projects … it’s quite hard to put figures around that.
When Limelight Networks bought SaaS web content management (WCM) vendor Clickability in 2011, it united WCM with video streaming and a large, global content delivery network (CDN) to create an offering unlike that of other vendors: Limelight Orchestrate, a multifaceted “digital presence management platform”.
Limelight liked to say marketers and other digital pros could, with a one solution, manage multichannel content and digital experiences including video and shave relevant milliseconds off page-load times and site delivery.
Flash forward to last week. On December 23, Limelight announced the sale of the Clickability WCM business to Upland Software, an Austin, TX, company that, in two years, has added six cloud-based software solutions to its enterprise work management portfolio.
Limelight says it will focus on “delivery optimization capabilities” – in a word, speed. It’s a change I can follow. Limelight invested in WCM enhancements and pushed “digital presence management” to marketers and technology pros, but WCM revenue never skyrocketed for the publicly traded company. Limelight estimates WCM revenue in 2013 at $13.7 million, according to an SEC filing, a small slice of its $170 million or so annual turnover. For Limelight, the CDN business still rules.
At a recent software summit for industry analysts in Stamford, CT, IBM made a big point of showing off some of its newest employees. They’re not computer scientists from top engineering schools like MIT or Carnegie Mellon, but visual designers, interaction pros and user experience experts from design schools like Rhode Island School of Design and Pratt -- urban hipsters in a sea of button-down IBM’ers.
This is part of IBM’s growing effort to embed “design thinking” into software development across its portfolio. Central to the effort is the new IBM Design Studio in Austin, TX, led by design general manager Phil Gilbert. The group is recruiting design-minded professionals by the hundreds to help inject human-centered design principles into next-generation business software. They work closely with software teams to rethink interaction models and influence what’s coming out next.
The facility has also hosted dozens of high ranking execs from across IBM in “design camp” events aimed at teaching the relevance and importance of design-centered thinking across the company.
“We are attacking this transformation from the bottom, top, and (everywhere) in between,” said Gilbert.
This isn’t just an effort to make software look good. Software vendors are realizing that to be competitive, software products must have powerful capabilities, function smoothly, streamline complexity and be usable across a spectrum of people, regardless of their technical skill.
Forrester has just published our forecast for the 2014-2015 global tech market (January 2, 2014, “A Better But Still Subpar Global Tech Market In 2014 And 2015”), and we are predicting that business and government purchases of information technologies (IT) will grow by 6.2% in US dollars in 2014, and by 5.5% in exchange-rate-adjusted or local currency terms. (Note that this data includes purchases of computer equipment, communications equipment, software, IT consulting and systems integration services, and IT outsourcing services, but does not include purchases of telecommunications services.) The US dollar growth rate will be distinctly better than the 1.6% growth in US dollars in 2013, though constant currency growth will be only somewhat better than the 4.3% growth in 2013. Still, the global tech market won’t see strong growth until 2015, and even then the 8.1% US dollar and 6.9% local currency growth rates will be well below the double-digit growth rates of the late 1990s and 2000 era.
Three interconnected and reinforcing themes will define the global tech market this year:
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!