Digital Transformation Projects Have an 84% Chance of Failure; Are You Ready to Failure or Succeed?

Would You Invest If You Knew the Investment Had a High Likelihood of Failure?

If I were to tell you that I had an investment opportunity for you and the probability of you making money was 16% or less, how likely would you be to invest in it? But if I told you that the investment opportunity had a 90% chance of returning your investment, might you be more likely to want to invest?

What’s interesting is that digital transformation is all around us. We can’t help but be impacted in our person lives, from smart phones, smart TVs, apps (think taxi’s vs. Lyft), Siri, Alexa and Google Home. In business, it’s clear that customers want to engage with business in digital and mobile channels. Businesses need to make the transition to be competitive and survive. Yet according to Consultancy.uk* and Bruce Rogers** who wrote Profitable Brilliance: How Professional Service Firms Become Thought Leaders, 84% of businesses undergoing digital transformation are likely to fail. 

The More Things Change, The More They Stay The Same

Having been at this game for a while, the statistics reminded me of stats from nearly 20 years ago when the topic was CRM and ERP. Though they are not exactly the same, they have many of the same elements. Digital transformation, innovation and CRM and ERP implementations are IT implementation of people, process and technology. What they have in common is the use of technology to make scalable processes that were once manual. The advantages among many, were higher productivity (cost savings) but also providing better customer-facing experiences (revenue generating.) Going back through my old papers about CRM and ERP failure rates,*** I saw many of the same type of stats predicting similar failure rates for digital transformation projects are being predicted today**** (and by many prominent groups, including IDC, Gartner Group and Forrester Research.)

Things that make you go hmmmm. The more things change, the more they stay the same.

When Will Organizational Change Management and Culture Change Be Taken Seriously?

The stats show since the late 1990’s – early 2000’s until now, when Culture Change (CC), Organizational Change Management (OCM) and Behavioral Change (BC) is missing from a project, there are issues, yet it’s still not “fashionable.” Perhaps the lack of fashionability is from an old paradigm stemming from the command and control type leadership that doesn’t deem people as an important aspect of the business transformation, whether its CRM, ERP or Digital Transformation. Perhaps it stems from leadership that doesn’t know there’s a whole science and set of CC and OCM methodologies that go along with IT implementations. Perhaps they have never been shown the value of that OCM and CC can bring, so they still don’t think it’s important enough to invest in. Perhaps it’s a matter of showing people that it works and makes a difference!

The Time for Change is Now

The 4th industrial revolution challenges most of our existing mental models. What this means is that cultural change is essential to enable and execute successfully, any business / organizational / digital transformation. The key is having a plan, as well as, having developed tools and process for culture change and organizational change management which includes, but is not limited to having a:

  1. Communication plan and regular communication cadence
  2. Leadership and stakeholder involvement and engagement
  3. Training and skill development for the future state of the business and
  4. Organizational readiness and adoption on a continuing basis of the ongoing changes.

And of course, underneath each of these very simplistic groupings is a deep set of assumptions, tools, methodology and business-driven outcomes. So digital transformation isn’t uniquely about technology. It is about having the right digital strategy to ultimately transform a business to achieve higher objectives. This type of digital transformation must be built along with the human capital component, including skill sets, as well as, a cultural adoption of changing the way we do business. So what it boils down to is evolving behaviors within the organization, both from a leadership point of view as well as middle level managers to all employees.

Being Stuck in the OCM Adoption Chasm Will Cause Digital Transformation Failure

What is seems like, referencing one of my favorite people and author’s is Geoffrey Moore. It’s seems that perhaps we are, after twenty or more years of having OCM and CC at our finger tips, we are stuck in the adoption chasm. What we are headed for is the digital transformation iceberg of failure. We know what the iceberg did to the Titanic. We don’t want to be on a sinking ship. So what does an organization need to do? More on all of this in a future post.

@drnatalie

Natalie Petouhoff

VP, Program Executive, ITC | Salesforce.com

References

* Consultancy.uk. “Two Thirds of Digital Transformation Projects Fail” Consultancy.UK. N.p., 28 Sept. 2015. Web. 28 July 2016

**Rogers, Bruce. “Why 84% Of Companies Fail At Digital Transformation.” Forbes. Forbes Magazine, 7 Jan. 2016. Web

*** http://sloanreview.mit.edu/article/the-end-of-corporate-culture-as-we-know-it/

*** http://www.cio.com/article/2440386/supply-chain-management/supply-chain—hershey-s-bittersweet-lesson.html

*** http://customerthink.com/failed_crm_implementation_finally_costs_hp_465_million_in_damages/

*** http://www.destinationcrm.com/Articles/Columns-Departments/The-Tipping-Point/The-Scientific-Reason-for-CRM-Failure-Part-1-42510.aspx

*** http://www.destinationcrm.com/Articles/Columns-Departments/The-Tipping-Point/The-Scientific-Reason-for-CRM-Failure-Part-2-42655.asp

*** http://media.techtarget.com/searchCRM/downloads/CRMUnpluggedch2.pdf

*** http://www.zdnet.com/article/crm-failure-rates-2001-2009/

*** https://hbr.org/2002/02/avoid-the-four-perils-of-crm

*** http://www.infoworld.com/article/2648303/applications/waste-management-sues-sap-over-erp-implementation.html

*** http://www.computerworld.com/article/2517917/enterprise-applications/sap–waste-management-settle-lawsuit.html

*** https://www.google.com/#q=hershey+crm+failure&*

*** http://www.crmsearch.com/crm-failures.php

*** http://www.destinationcrm.com/Articles/Columns-Departments/Insight/A-Succession-of-Failures-70822.aspx

**** https://www.idc.com/getdoc.jsp?containerId=US40550115 ; http://www.gartner.com/newsroom/id/3337617 ; https://www.cmo.com.au/article/545992/will_your_business_digital_predator_prey_/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Digital Disruption is Gonna Get You Unless You Prepare Your Brand Now

Disruption surrounds the marketplace. As companies face disruption in their industry, the race to stay ahead of or beat the competition is quickening. Software is one of the ways companies competitively automate, manage and analyze business processes, data and content and scale operations. And to successfully compete in this increasingly digital world, enterprises need to transform slow, error-prone operations from manual, analog processes to automated digital workflows and document generation.

However, as various departments in companies buy software applications, often the lines of business are choosing the best of breed solutions and platforms which don’t necessarily easily integrate with each other or the main IT systems. This results in companies having many separate software systems. With people distributed over large geographies, it can be difficult to coordinate work across the business and thus defend against competitors.

While obtaining the right software for each department and use case is important, this often leaves the organization without a way to easily connect the work flows across departments and lines of business to get the return on investment. What is the key to winning the digital transformation race? A digital business process flow platform.

Businesses that drive process efficiency and effectiveness across desperate software solutions and across every aspect of their business will be uniquely qualified to position themselves to exceed and excel. To do this, companies need a platform to digitally integrate, sync and create sophisticated business processes independent of the variety of different software solutions throughout the various departments in a company.

The issue is however, not just to connect SaaS applications, but to also provide process automation to make sure the processes from each of those applications work together well. Without a digital workflow and content automation (WCA) platform and corresponding analytics, it can be very difficult to make sure the investments the organization has made in separate software solutions are actually returning the investment. Nintex does just that.

Competitive Positioning

Nintex’s key differentiator is they offer a digital transformation platform comprised of Nintex Workflow Cloud and Nintex Hawkeye. The host of Nintex’s digital SaaS connectors allows clients to rapidly build and deploy a digital workflow and content automation (WCA) and cloud transformation platform without having to write code. The business result is the ability to acquire customers faster, increase the pace of innovation, as well as control and manage expenses. The platform allows organizations to automate their business processes quickly and easily. And the drag and drop interface encourages quicker adoption of the Nintex solution. Importantly, any workflow automated with Nintex Workflow can be deployed to native mobile platforms (Android, iOS and Windows) in a rapid and simple manner.

The Nintex platform automates processes on and between enterprise content management systems and collaboration platforms, connecting on-premises, cloud workflows and mobile users. Two hundred of the Fortune 500 companies use Nintex, including more than 7,000 public and private organizations in 90 countries, running millions of workflows daily.

For companies that are not ready to move everything to the cloud, Nintex also allows companies to create workflows that stretch across both cloud-based and on-premises systems and services, to distribute work to multiple sites for multiple purposes and move data and workflows to the cloud when they are ready.

Nintex’s overall power is as a Digital Business Platform (DBP). Nintex combines powerful Workflow and Content Automation (WCA) capabilities in one platform. (Editor’s Note: WCA is an emerging technology category that consolidates the legacy technology markets of Business Process Management (BPM) and Customer Communications Management (CCM).) Nintex offers advanced WCA for its easy-to-use workflow and document generation capabilities and workflow analytics (workflow process intelligence).

Target Markets and Industry Vertical Solutions

Target markets include Communications and Media, Education, Financial Services, Government, Healthcare and Life Sciences, Legal, Manufacturing, Professionals Services, Retail Services and Technology industries. Nintex solutions are designed for a range of lines of business within organizations, including Sales and Marketing, Finance, Human Resources, IT and Administration, Customer Service, Field Service and Safety.

High-payback document processes that are faster to implement with a system like Nintex include those in Table 1, customer-facing processes as well as back-office processes (see Table 2a and 2b.) What’s important to note is that the implementation timeframe and costs are fractions of a traditional enterprise-level IT system and instead of using a single, formal, top-down development effort, they are evolved with rapid iterations. This takes a page out of the lean-process, design-thinking community, where rapid iterations and pivoting is key to success and gives large organizations not used to the start-up mentality the edge to be more competitive, quicker.

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Customer References

In speaking to Nintex customers our research found that many of the gains came from having an easy way to process and execute their digital transformations. This might include moving to the cloud, reducing the number and complexity of workflows like creating and approving a press release, signing and approving contracts, reducing resources and reassigning them to more important jobs as well as reducing the number of software applications used by the company.

The savings in time for enhanced workflows advanced the company’s position in the marketplace, allowed them to get to market faster and beat the competition. In addition, IT departments were able to be more focused on the needs of the business versus being taxed with the maintenance of many separate software applications. These typical IT responsibilities took IT’s time and focus away from the direct needs of the business. By implementing Nintex, the relationship between the lines of business and IT were greatly improved. With the ever changing dynamics in IT, the IT department needs to be highly agile and flexible in the solutions they provide for the business. Nintex provides IT with what they need to deliver to the business. This makes IT more relevant than ever, which is especially key when many lines of business are buying their own software. Now, more than ever, IT can play a key role in the success of the business.

Are you looking to digitally transform your business? Have you determined which processes are slowing the digital transformation of your business? And do you have a solution to take those manual, error-prone processes and digitally enable them? This report will help you in choosing a vendor that can help you with just that.

@DrNatalie Petouhoff, VP and Principal Analyst, www.ConstellationR.com

Covering customer and employee applications that empower digital workplaces

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Video Advertising: Key to Getting Customers Attention As Ad Blocking is Increasing

Searches for Influencer Marketing have grown 5x in 2015 according to a study from Google Trends from January 2016. Nearly 40% of Millennials are using ad block applications and their use is growing fast according to a study by PageFair & Adobe. So how does a company get their target customer’s attention? And with content marketing a #1 priority for most CMOs as more and more sales are decided upon before even talking to a sales person. And sometimes a salesperson is never contacted, so getting the customer’s undivided attention has never been so important. Perhaps the answer is video marketing. Video consumption has exploded across all devices and is one of the fastest growing advertising category.

Adobe, a the leader in video content creation and delivery, announced it’s acquisition of TubeMogul which will enable brands to capitalize on the huge shift to online video. The acquisition of TubeMogul  strengthens Adobe’s leadership in digital marketing and advertising technology. The addition of TubeMogul will enable Adobe’s customers to maximize their video advertising investments across desktop, mobile, streaming devices and TV. TubeMogul’s video advertising platform. In addition, this allows their customers to build upon their capabilities in search, display and social advertising planning and delivery using Adobe Media Optimizer with Adobe Marketing Cloud. This combination will give customers access to first-party data and measurement capabilities from Adobe Audience Manager (Adobe’s data management platform) and by using Adobe Analytics.

Why is video advertising so important? Brad Rencher, executive vice president and general manager, digital marketing, Adobe gave this statement, “Whether it’s episodic TV, indie films or Hollywood blockbusters, video consumption is exploding across every device and brands are following those eyeballs.” Adobe feels the acquisition of TubeMogul, will give customers a ‘one-stop shop’ for video advertising, providing even more strategic value for the use of the Adobe Marketing Cloud.

TubeMogul is a video demand-side platform (DSP) leader. Brett Wilson, CEO and co-founder, TubeMogul said, “The combination of Adobe Marketing Cloud with TubeMogul’s software creates a uniquely comprehensive platform that will help marketers always know what’s working — and act on it.” And what’s key is measurement – to know what is working and not working, and obviously do more of what is getting a result.

There are so many choices for Marketers today, as far as software and it is only getting more confusing with all the choices. When a software company can show you how to get results, you know you are going in the right direction. Education and learning to use all the features and functions of what the various software platforms provide is of growing concern for most companies to obtain the highest ROI possible for the investment they have made.

It’s key that Marketers are clear on what their strategy, goals, objectives and tactics are and have a strong measurement program to be able to show that the software purchase enhanced the brands ability to drive more awareness, increase customer acquisition and turn more leads into sales. And with ad blocking increasing, there’s got to be another way to get customer’s attention. Video seems to be a prime candidate. This is just one example of how early adopters and innovators are taking hold of the market place and making their competition irrelevant. And like the BlueOcean authors said, that’s the key to financial success in today’s marketplace. Cross the chasm, join the digital transformation and digital disruption evolution or expect to be disrupted. Disrupt or be disrupted. Those are the choices to being innovative leaders and using design thinking to transform your business revenue model.

@DrNatalie, VP and Principal Analyst, www.ConstellationResearch.com

Covering Customer-facing Applications to Create Great Customer Experiences

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Constellation ShortList™ for Digital Performance Management

Digital Performance Management provides companies with the analytics to determine if their customer experience is optimized. The Constellation ShortList presents vendors in different categories of the market relevant to early adopters. In addition, products included in this document meet the threshold criteria for this category as determined by Constellation Research. This Constellation ShortList of vendors for a market category is compiled through conversations with early adopter clients, independent analysis, and briefings with vendors and partners.

Mastering digital performance management (DPM) is one of the leading challenges of the digital economy. Often referred to as application performance management (APM), it requires a joint effort between many functional departments, such as marketing, sales, customer service, e-commerce and IT. It is no longer just about IT looking at the performance of the technology stack or the management of the infrastructure or cloud that delivers customer experience.

Today, it’s about the collaboration between the lines of business and IT to measure and manage the end-to-end transaction delivery and translate it into actionable information that a brand can use to optimize customer experience, as well as the performance of the technologies used to deliver it. When DPM is optimized, companies can deliver an engaging digital experience, maximize revenue and improve brand loyalty. DPM vendors help both the business and engineering teams to not only define conversion and revenue goals but also make sure they are reached.

They make sure the application’s performance doesn’t become a roadblock to optimal customer experiences and reaching business metrics, including conversion rates, high availability and high user experience indexes. The goal is to monitor and measure to eliminate all revenue barriers with a strong focus on digital performance to ensure that the road to conversion is quick and easy; the customer experience is smooth; and customers remain loyal as a result.

Constellation considers the following criteria for these solutions:

  • Monitoring of each customer’s journey and business transactions, using intelligent analytics
  • Proactive application monitoring for quick problem resolution and maximum availability
  • Full insights into each customer’s journey to make better business decisions
  • Connect the dots between customer experience, application performance and business outcomes
  • Full technology stack monitoring with deep operational insights into the user’s application environment
  • Big data monitoring and data visualization
  • Mobile application monitoring
  • Cloud, server and mainframe monitoring
  • Load testing, virtualization and network monitoring
  • Customer behavior analytics.

Constellation evaluates over 25 solutions categorized in this market. This Constellation ShortList is determined by client inquiries, partner conversations, customer references, vendor selection projects, market share and internal research. These are the best-of-breed vendors that provide applications and services without bundling into another platform:

  • APM+
  • AppDynamics
  • Dynatrace
  • NeoSense
  • Oracle
  • SAP
  • SOASTA.

For more information, please see the Constellation Research website.

@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research, Covering Customer Facing Applications

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The Business Phone System Reinvented: The Next-Generation Cloud Communications and Collaboration Tool

The only way to build a truly innovative and collaborative culture is to give everyone a voice. In working with Dialed, I just completed some ROI research to understand how quickly, easy and affordable it is today to plug every employee into your business with a very innovative phone system. They way it works is that Dialpad turns all of your devices into your business phone, letting you make high-definition calls over Wi-Fi or your carrier network from anywhere. And businesses can let their  remote workers and global offices feel like a part of HQ with peer-to-peer HD video. This is especially great for field service, where video often can solve the problem like no other solution because you can SEE the issue. In these new systems, modern business communications integrate seamlessly with the productivity apps that employees use every day, making it easier than ever for them to collaborate with docs, emails, and calendar invites.

With this system, a brand can move a phone call from their WiFi to their carrier or from a desktop to a mobile device very easily, so in essence it is very easy to switch calls from device to device (phone, tablet, desktop…) It is also easy to transfer calls between colleagues or departments simply by looking up a name in the directory.

In the ROI research we interviewed two companies, Vivant Solar and a large communication services provider to see how they transformed their on-premises telephony systems to a purely cloud-based communications solution using Dialpad. The change, depending on the situation, resulted in six- to seven- figure cost savings. Both companies previously had legacy, on-premises PBX (Private Branch Exchange) technology, which is a private telephone network used within a company.

Dialpad provides a secure, enterprise communications cloud solution that incorporates traditional PBX features into a modern cloud-based, business communications VoIP system. The solution integrates with Google Apps for Work and with Office 365, with a user interface built to satisfy the needs of a modern workplace but without the typical costs of traditional enterprise, on-premise telephony systems.

The platform offers messaging, voice, video, conference calling in the cloud, attributed call transfer, auto-attendant, IVR, business SMS, MMS, and group messaging, call recording, live-call device switching, international outbound calling, local telephone numbers, multi-device functionality, toll-free numbers, visual voicemail, contact profiles, a company directory and fax support as well as core social profile applications, such as LinkedIn and Twitter for context about the caller. In case you are wondering, has anyone else discovered this service, Dialpad’s customers include 60 percent of the Fortune 500, high-growth enterprises, and forward thinking organizations and start-ups. The service is built on the WebRTC framework and runs on a redundant global network of nine data centers on four continents.

CUSTOMER ROI CASE STUDY: VIVINT SOLAR 

In the evaluation of various technology infrastructure systems, Mike Hincks, Director, IT Infrastructure at Vivint Solar, found that traditional IT voice systems come with hundreds of thousands of dollars of yearly infrastructure and hosting costs, all designed around employees using desk phones. The catalyst for change was to use a system not tied to a desk phone. One of the many interesting features was that Dialpad had no upfront capital expenditures or maintenance costs, which made it easier to get the technology approved by senior leaders at Vivint Solar.

In addition, Hincks looked at the money the sister company was spending on long-distance contracts. With Dialpad, there were no long-distance carrier costs. Hincks also looked at the cost of the team he would need to hire in order to maintain an on premise, hosted solution. The sister company had had a five-person team to manage voice applications. In addition, Hincks would have needed to schedule the IT team’s time to provision a new phone for each employee, with at least one hour of training per employee and some additional time from the IT team for troubleshooting. Dialpad required less than one full-time equivalent employee.

Another one of the biggest conveniences was that Dialpad integrated with Google for Work without any authentication process. “I found the Millennial workforce wants technology to work right away. They don’t want to set up an application, have to go through training or troubleshoot it. They want to click on an app and see it work immediately,” said Hincks.

The positive feedback about Dialed from Vivint Solar’s more than 4,000 mobile workers includes:

  • Improving the ease of signing up and using the communications technology
  • Increasing agility to work anytime and anywhere on any device with technology that doesn’t get in the way of productivity
  • Increasing productivity by being able to use a simple user interface
  • Boosting the ability to make bigger sales at a faster rate.

The ROI: Costs were reduced by several hundred thousand dollars, year over year. Savings came from:

  • No upfront capital expenditure and maintenance costs
  • No long-distance carrier costs
  • No need to hire a team to manage the cloud based communications
  • No need to train employees or engage the training department
  • High user adoption rate because of the simple user interface
  • Improved ability to attract talent by reducing recruiting costs and increasing retention of top talent

A GLOBAL COMMUNICATION SOLUTIONS AND SERVICES COMPANY

In the second company, the Director of Digital Workplace Technologies set up a proof of concept (POC) with Dialpad. He found that the best way to meet the needs of workers in the modern enterprise was using cloud technology. He wanted to re-conceptualize how communications services could be presented to users and to eliminate deterrents to productivity, especially for the geographically distributed workforce that used telephony systems. The Director of Digital Workplace Technologies said, “It was important to look at an IT project as an organizational change management project. We learned this lesson when we moved our users to Google Apps for Work. Technology changes that affect how productive workers are should be seen as organizational change projects. If you can’t find something you are looking for, it makes you less productive and frustrated. So we always overlay organization change management with our IT rollouts.”

DON’T FORGET ORGANIZATION CHANGE MANAGEMENT

The company needed to have a new communications system that could be completely up and running in minutes, compared to months or even years required for deploying global on-premises systems. Applications built in the cloud reduce costs because they are more flexible, extensible, and easier to work with while making collaboration intuitive. And this company found organizational change management was a key element for a successful implementation of this new communications system.

The ROI

Using Dialpad, the company was able to retire several of its old telephony systems and realize millions of dollars in cost savings by reducing:

  • Maintenance agreements
  • Infrastructure
  • Service and support for the infrastructure
  • Phone lines from service providers.

Today, the company has deployed about 6,000 VoIP lines on Dialpad, which cover about 40 percent of its global employee base. It is looking to expand coverage every quarter. The company’s savings were several million dollars, year over year. Savings came from:

  • No upfront capital expenditure
  • No maintenance costs
  • Reduced reliance on IT helpdesk
  • No long-distance carrier costs.

GIVING EMPLOYEES MORE CHOICE, RESULTING IN HIGHER PRODUCTIVITY

After implementing Dialpad at just one large site, the global company reduced the site’s cost per minute of call time by double digits. In addition, the new system offered features that the old telephony systems could not. For instance, the PBX system had been tied to a particular device – the desk office phone. However, most people are now mobile, working from various devices and remote locations. Clearly, workers could not take their desk phones outside of their offices. When workers were away from their desks, they had to use cell phones or other alternatives – from multiple phone numbers – that created additional costs for the company.

Dialpad, however, allows employees use to Voice over Internet Protocol (VoIP) telephony. When the company moved to Dialpad, employees could use their computers to place calls, essentially replacing desk phones. They could also use the Dialpad application on their Android or iOS mobile devices. To the person receiving the call, it all comes from the same phone number, whether the VoIP call is made from a computer or from a mobile device.

Employees could also become more productive. With the ability to communicate from any place, using any device, while still being accessible from a single phone number, people could connect with each other more easily. As collaboration was made easier, the ability for teams to work more effectively with remote employees was also improved. In essence, the company had a new potential to increase the agility and adaptability of its workforce. Employees could be more productive, collaborative and feel more connected to each other using Dialpad.

MODERNIZING THE WORKPLACE 

The new technology enabled the company to modernize its workplace. The company realized that it needed to give employees – as well as new hires and interns – technology tools that are modern, intuitive and easy to use, unlike traditional enterprise tools. The company found employees could easily pick up how to use Dialpad because they were familiar with Google Apps for Work. While moving to Dialpad, the company was also able to shift a portion of its traditional help desk activity to a self-service and community-supported model. In the community, users can ask influencers an guides questions.

WHAT YOU SHOULD CONSIDER IN CHOOSING NEW TECHNOLOGY

Hardware costs and desk phones traditionally have driven the voice communications industry. While struggling for decades to bring down hardware costs, providers attempted to shift to a software model that yielded some feature and cost improvements. However, these changes have not significantly reduced costs, improved scalability, boosted agility or simplified use. In contrast, a revolutionary, exponential change occurs in the telephony industry from using a 100 percent cloud based system designed with the user in mind that is extremely easy to deploy and use while slashing operating costs, eliminating call charges, and offering rapid, unlimited and affordable scalability.

GIVING EMPLOYEES THE RIGHT TOOLS & TECHNOLOGY RESULTS IN BETTER CUSTOMER EXPERIENCES

At the end of the day, it’s really the employees that create the customer experience. And employees can’t do that unless they are given the right technology. It’s up to companies to evaluate the technology they are using and to provide them the latest technology that allows them to be their best. For information about this research study, you can find it here.

@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research

Creating Great Customer Experiences By Empowering Employees

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The Need for Customer Experience is Based on Science Not Myth

The need for customer experience to improve is not a myth. In fact, here’s why. Noted psychology researcher and writer Mihaly Csíkszentmihályi observed in 1998 that people who perform seamless, sequence-based activities on a regular basis are happier than people who don’t[i]. He coined the term “flow” to describe this behavior. With the advent of CoIT, we’ve actually imposed a new set of demands on our customer’s brains. But instead of offering a series of smoothly sequential flows, websites and mobile applications are characterized by lag, downtime, and restarts. And at the same time customer’s flow-oriented brains simply aren’t wired to deal with poor digital experience interactions. Science has shown the business need for great customer experiences is a fact, not a myth.

And it can be tempting to label customers picky and impatient. But there’s a wealth of research on what happens to customers at a neurological level when they are forced to deal with slow or interrupted processes.[i] Their impatience is an indelible part of their human circuitry. Brands must recognize that customers’ hardwiring of the brain’s and their neurological desire for flow and easy of use as part of the cost of doing business. Companies must come to terms with the economic imperative of the customer experience or drive customers to their competitors because of their poor focus on customer experiences.

Fast websites and mobile experience create happier users. Those happier users are more likely to follow “calls to action” to register, download, subscribe, request information, or purchase. Unhappy users, which could include those who experience a mere two-second slowdown in how a web page loads, make almost two percent fewer queries, three point seven-five percent click less often, and report being significantly less satisfied with their overall experience[i]. Worse, they tell their friends about their negative experience. With the word-of-mouth social networks provide, brands need to heed the seriousness of differentiating their brand’s customer experience or be left in the dust.

Response Times have been consistent for 45 years. Based on neuroscience, the facts about human perception and response times have been consistent for more than forty-five years[i]. In fact, these numbers are hard-wired in human brains. And they are consistent regardless of the type of device, application, or connection a customer is using. In fact, that’s key to where customer expectations come from thus important to capitalize on. And what’s critical is determining where a brand’ web / mobile sites compare to customer expectations as well as benchmarking against CoIT applications or competitors or even non-competitors who have a great customer experience.

Response Time Has Not changed Much. In Robert B. Miller’s 1968 paper, “Response Time in Man-Computer Conversational Transactions[ii]“, found people have always been most comfortable, most efficient and most productive with response times of less than two seconds. Since 2006, what has changed slightly is the average online shopper expects pages to load in four seconds or less. Today, forty-nine percent expect page load times of two seconds or less, and eighteen percent expect pages to load instantly[iii]. And while optimizing every aspect of a brand’s digital assets to meet an “instant” expectation is a laudable goal, organizations simply may not have initially budgeted the resources to achieve these goals. Digital experience maturity, however, provides teams the ability to identify the interaction points in the digital customer journey most sensitive to improvement so they can maximize return on performance investment and include this in the budget and resource planning activities. Here’s the results of the Walmart study on page load times and conversion rates:

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Businesses can keep arguing that customer experience doesn’t matter, it’s a touchy-feely construct or get it directly affects the bottom-line and start by designing and measuring customer experience performance management. For more on this see my report, here.

@drnatalie petouhoff, VP and Principal Analyst

Covering Customer-Facing Applications

[i] http://www.webperformancetoday.com/2014/07/16/eight-tricks-improve-perceived-web-performance/

[ii]Robert B. Miller’s 1968 paper, “Response Time in Man-Computer Conversational Transactions, https://www.computer.org/csdl/proceedings/afips/1968/5072/00/50720267.pdf

[iii]http://insights.wired.com/profiles/blogs/47-of-consumers-expect-a-web-page-to-load-in-2-seconds-or-less#axzz498kHSokj

[i] http://www.webperformancetoday.com/2010/06/15/everything-you-wanted-to-know-about-web-performance/.

[i]Dual-task interference in simple tasks: Data and theory. Pashler, Harold Psychological Bulletin, Vol. 116(2), Sep 1994, 220-244. http://dx.doi.org/10.1037/0033-2909.116.2.220

[i] The Concept of Flow: Handbook of Positive Psychology, Nakamura, J. and Csikszentmihayi, M. 2002.

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Implementing Customer Experience, Cloud, IOT or Any Technology Project? Why Will it Fail?

Obviously no one plans on implementing a project that will fail. However, statistics show that over the past 20 years a very large percentage of technology projects do fail to result in the business outcomes that they were expected to meet. The real issue is that leading change (implementing new technology, whether it be CX, transitioning to the cloud, IoT, etc…) is different than the role of leading in general. But this point is often overlooked or some leaders don’t realize how big a difference there is in leading change compared to their every day leadership job.

The reasons projects often fail and the need for orchestrating customer experience projects using organizational change management range from:

  1. Projects ran over budget, were late, or never completed.
  2. Projects were attempted more than once because initial efforts failed.
  3. Only a small part of the organization adopted the new processes or systems.
  4. When the project went live, critical business systems halted, causing loss of revenue, increased costs, dissatisfied customers and frustrated employees.
  5. Parts of the business (or possibly the entire organization) eventually reverted to the old way of doing things.
  6. The return on investment (ROI) and/or stated benefits were never realized.
  7. The project cost the business more money than it saved or generated.

 

Our research shows that there are seven steps for leaders of change leaders can use to be more successful.

Practice #1 – Understand the Business Case for Change

Practice #2 – Start with the Executive Team: Move It from Involved to Engaged

Practice #3 – Engage All Leaders and Prepare Them for the Journey

Practice #4 – Build a Broad Understanding of the Change Process

Practice #5 – Evaluate and Tailor the Change Effort

Practice #6 – Develop Adaptive Leadership Skills in Change Leaders

Practice #7 – Create Change Leadership Plans

Don’t become one of the statistics of failed projects. There are best practices that work.

@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research

Covering Customer-Facing Applications to Create Awesome Customer Experiences

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New Report: Neuroscience Proves Customer Experience (CX) Isn’t Just Fluff

What’s the Importance of CX? There’s a lot of talk about creating a great customer experience. Seems the world has gone from being concerned with CRM to customer experience. And every vendor is talking about it- whether its a marketing vendor, customer service vendor, mobile vendor…. What I wondered was what scientific data is there to help prove that customer experience wasn’t just a fluffy initiative that was the next fad. From being a customer myself (we all are) I found that intuitively I know that the type of customer experience I have and others have does make a difference in our opinion about a brand. It changes whether we want to interact with them again, whether we purchase from them, whether we become a loyal customer bringing repeat business and whether we make positive remarks to our friends and family as well as what we post in social media. Social media carries more weight that most realize because while most people won’t post a response, they will read it. That’s the 1-9-90 rule, where ~1% of the people post, ~9% respond to the person who posted and ~90% just read the post, but don’t respond. 90% of my 58,000 followers on Twitter is 52,200 people.  Even if not all of them see a post, it’s still a lot of people.

The Science of Flow That Makes Up Customer Experience. Noted psychology researcher and writer Mihaly Csíkszentmihályi observed in 1998 that people who perform seamless, sequence-based activities regularly are happier than people who do not. He coined the term “flow” to describe this behavior. However, instead of offering smoothly sequential flows, websites and mobile applications often experience lag, downtime, and restarts. At the same time, customers’ flow-oriented brains simply are not wired to deal with poor digital interactions. As a result, when the customer experience is poor, they leave the site and go to a competitor’s that has optimized both their IT and CX metrics so the experience does flow well. Science has shown the business need for great customer experiences is a fact, not a myth.

The Neuroscience of Customer Experience. It can be tempting to label customers picky and impatient, but there’s a wealth of research on what happens to customers on a neurological level when they are forced to deal with slow or interrupted processes. Impatience is an indelible part of human circuitry. Brands must recognize that the hardwiring of customers’ brains and their neurological desire for flow and ease of use are part of their expectations. Companies must come to terms with the economic imperative of the customer experience or risk losing customers to the competition.

Based on neuroscience, the facts about human perception and response times have been consistent for more than 45 years. They are hard-wired into the brain and are consistent regardless of the type of device, application, or connection a customer is using. That’s key to understanding where customer expectations come from. It is critical to determine how a brand’s web and mobile sites compare to customer expectations as well as to benchmark against CoIT applications, competitors or even non-competitors who have a great customer experience.

Customer Expectations Mean Business. In Robert B. Miller’s 1968 paper, “Response Time in Man-Computer Conversational Transactions,” he found that people have always been most comfortable, efficient and productive with response times of less than two seconds. Since 2006, what has changed slightly is that the average online shopper expects pages to load in four seconds or less. Today, 49 percent expect page load times of two seconds or less and 18 percent expect pages to load instantly. While optimizing every aspect of a brand’s digital assets to meet an “instant” expectation is a laudable goal, organizations simply may not have budgeted the resources to achieve this goal. Digital experience maturity, however, provides teams the ability to identify the interaction points in the digital customer journey most sensitive to improvement. As a result, they can maximize return on performance investment and include this in the budget and resource planning.

Fast websites create satisfied users who are more likely to follow “calls to action” to register, download, subscribe, request information, or purchase. On the other end, unsatisfied users, which could include those who experience a mere two-second slowdown in web page load time, make almost two percent fewer queries, nearly four percent fewer clicks, and report being significantly less satisfied with their overall experience. Worse, they tell friends about their negative experience. With the word-of- mouth that social media networks provide, brands need to heed the seriousness of positively differentiating the brand’s customer experience.

Want more information on this new report? You can find it here.

The neuroscience of customer experience @drnatalie petouhoff

@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research

Covering Customer-facing applications that make great customer experiences

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Local Motor’s Self-Driving Vehicle Taps the Power of IBM Watson

There’s been a lot of talk around self-driving cars and Local Motors, a leading vehicle technology integrator and creator of the world’s first 3D-printed cars, introduced the first self-driving vehicle to integrate the advanced cognitive computing capabilities of IBM Watson. Local Motors is a technology company that designs, builds and sells vehicles. The Local Motors platform is a combination of a global co-creation with local micro-manufacturing to bring hardware innovations quickly to market. Local Motors in National Harbor, Maryland is a public place where co-creation is the focus for advancement of vehicle technologies.

What can you see if you visit the Maryland facility? On display are 3D-printed cars and a large-scale 3D printer. There visitors can have an interactive co-creative experience that showcases what the future of 3D printing, sustainability, autonomous technology will be. Visitors can get involved with Local Motors engineers and the company’s co-creation community.

The automobile has a name and it’s called “Olli.” At its debut it was carrying the CEO of Local Motors and co-founder John B. Rogers, Jr. and vehicle designer Edgar Sarmiento. The vehicle took them from the Local Motors co-creation community into the new facility. While there are already self-driving action in Washington, DC, soon there will be vehicles on the road in Miami-Dade County and Las Vegas. The cars can carry up to 12 people. More details can be seen in this video:

Source: IBM Watson

What’s the Big Innovation? The electric vehicle is equipped with some of the world’s most advanced vehicle technology, including IBM Watson Internet of Things (IoT) for Automotive. Passengers can interact conversationally with Olli and ask about:

  • Destinations, for example, “Olli, can you take me downtown?”
  • Specific vehicle functions  like: “How does this feature work?”
  • Time related questions like, “Are we there yet?”

In addition, Olli can make recommendations on local restaurants or historical sites. Olli is essentially designed to deliver interesting, entertaining, intuitive and interactive experiences for riders. How is IBM Watson is being used to improve the passenger experience? It is enabling the natural interaction with the vehicle via the cloud-based cognitive computing capability of IBM Watson IoT to analyze and learn from high volumes of transportation data produced by more than 30 sensors embedded throughout the vehicle. As the vehicle gets used, Local Motors plans to install more sensors and adjust them continuously as passenger needs and local preferences are identified.

The platform leverages four Watson developer APIs:

  • Speech to Text
  • Natural Language Classifier
  • Entity Extraction and
  • Text to Speech.

Harriet Green, General Manager, IBM Watson Internet of Things, Commerce & Education commented that, “Cognitive computing provides incredible opportunities to create unparalleled, customized experiences for customers, taking advantage of the massive amounts of streaming data from all devices connected to the Internet of Things, including an automobile’s myriad sensors and systems. IBM is excited to work with Local Motors to infuse IBM Watson IoT cognitive computing capabilities into Olli, exploring the art of what’s possible in a world of self-driving vehicles and providing a unique, personalized experience for every passenger while helping to revolutionize the future of transportation for years to come.”

Having worked in the automotive industry in Detroit, it’s exciting to see new develops like this. It’s also exciting to see the application of cognitive computing in a real world situation. Using it for something like empowering self-driving vehicle is probably the best way to advance not only the self-driving cars but also the ability to deploy cognitive computing in a real world application. This looks to be the start of something very interesting that other brands in this space should be taking note of. Competition in the automotive is rapidly changing, from the provision of Cars-As-A-Service, with GM investing $500M in Lyft to cars that drive themselves. The Future is here.

@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research

Covering customer-facing applications that create amazing customer experiences.

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From the Field: Lithium Technologies and Microsoft Dynamics Partner To Create A Total Community Digital Strategy

Is social CRM dead? Depends on what you consider social CRM to be. With the partnering of Lithium Technologies and Microsoft Dynamics, we will see yet a new and more extensive version of intelligent customer engagements. The partnership includes Microsoft Dynamics and Lithium’s community data, social customer intelligence and analytics.

The expectation of the value of an online community is often associated with cost savings – just as call deflections can reduce the costs of customer service. While many cost savings are possible, there also are six major areas that my research has found through which an online community can contribute to a company’s revenue, profits and margins. The six areas are: increased revenue through new products and services; enhanced communications, marketing and public relations; improved employee engagement; better business cost efficiencies; expanded business value in customer service; and heightened senior leadership and board member business guidance. With this paper, leaders can create a basic blueprint to embark on a discussion about whether to create an online community, the value the community can provide, and how best to lead this key strategic initiative in their organization.

Back to the conference, @jasonlsilva gave a wonderful talk on perception, change and our ability to redefine the meaning of a billionaire to one that helps a billion people. That I think is quite different than most of the start-up wanna-be billionaire’s who are in tech to become the next billionaire. You can see more of the videos from Jason’s show BrainGames on youtube called Shots of Awe. He talked about how the smart phone is the most powerful tool to get people out of poverty. And that it’s important to step back and understand where we are in time with respect to technology. 100 years ago we were electrifying the world – today we are cognifying the world via technology. In cognitive psychology, after a signal reaches the brain, the instant when we are aware of a change in our environment, but it is before the brain is able to identify and codify what the change is. The key is to not only not be afraid of change, but to embrace it with a positive mindset. The book Mindset was recommended by Lithium’s CEO Rob Tarkoff @rtarkoff by Carol Dweck. And lucky me – got a selfie with @jasonlsilva – @jasonlsilva and @drnatalie

Speaking of great customer service, I got this note from Claudia Kardzair & Nena Gadingan who are Guest Care Managers at the San Francisco Marriott Marquis:

Screen Shot 2016-06-09 at 11.11.04 AM

The days of loyalty driven by customer care are here. Some analysts think companies will be competing on customer experience in the future. I believe they always have been. It may not have been as measured as it is now, it may not have been as obvious as now — but customers have been making mental note of their experiences. If it is bad, they will take themselves out of your marketing funnel, regardless of the number of emails, tweets or other communications a brand sends. It is the era of customer experience being the number one metric all CEOs and CFOs need to pay attention to.

And at the conference we got to hear about the wonderful total community results from customers like @USAA and Renee Horne and Mark Nichols from Skype.

Skype Community Results Renee Horne USAA Results

 

 

 

 

 

The keynote on the future of CRM and intelligent customer engagement by Jujhar Singh, General Manager of Microsoft Dynamics CRM, provided a deeper understanding of what the partnership means to customers.  He shared key insights into how businesses can maximize customer data to create more personalized brand experiences. The combination of online communities and the power of CRM is an amazing capability. Rob Tarkoff, president and CEO of Lithium Technologies, explained that with the partnership Lithium will be able to expand what they now offer, the power of Total Community across Microsoft’s intelligence and data infrastructures.

Microsoft Dynamics Integration with Lithium Technologies

By working closely with Microsoft, they together bring a much broader solution to their our customers. The strategic alliance will allow the integration of Lithium social interactions and community data into Microsoft Dynamics CRM. Microsoft Dynamics customers now have a community platform that offers businesses greater insights from the wealth of customer signals embedded in communities.

What does the future of CRM hold? Perhaps it will finally go from it’s former capabilities – a customer contact management system to actually become the more aspirational customer RELATIONSHIP engagement system that enrolls a brand’s customers and never looses sight of what is important to THEM and is always there when their customers need them with the things that are important to them. When companies do this they become truly customer-centric.

@drnatalie petouhoff, VP and Principal Analyst, Constellation Research

Covering customer-facing applications

 

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