Constellation ShortList™ for Customer Experience (CX): IOT Platforms

Customer Experience (CX): IOT Platforms are the platforms that make IoT come to life. 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.

Developing products for the Internet of Things (IoT) is a complex endeavor. Because most organizations lack the resources and skills for custom app development, successful projects require development on an IoT platform or solution. IoT data solutions offer a place to start by combining many of the tools needed to manage a deployment from device management to data prediction and insights, all into one offering. For customer experience offerings, Constellation has identified a range of platform providers, including pure-play third-party platforms, hardware vendors, connectivity providers and system integrators. Having an end-to-end ecosystem strategy means a company doesn’t have to develop their own modules, network stack or cloud on-boarding.

Constellation considers the following criteria to be considered an IoT Platform for CX. One of the key characteristics is to be able to connect data from every device, sensor, website, etc. and is built on a scalable event processing engine designed to ingest and analyze billions of connected events:

  • End-to-end ecosystem strategy
  • Reliably scale to billions of devices and trillions of messages
  • Manages up to 500,000 assets and 100,000 device messages per second
  • Cloud infrastructure as a white-label subscription service
  • Web-scale processing, analytics and machine intelligence
  • Ultra-low latency
  • Augmented reality integration
  • Messaging broker supports connections using native MQTT and WebSockets MQTT.

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. The list includes:

  • AWS IoT
  • GE Predix
  • Google Cloud Platform IoT
  • Microsoft Azure IoT Suite
  • ThingWorx
  • Salesforce IoT Cloud
  • Lively.

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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#OOW16 – #IOT Is Really Asking Your Business What Outcomes Are You Looking For?

Many companies approach the internet of things by starting with a device, make it connectable and then are in search of a business use case. This is a typical process that happens when there is a new area of technology area. If a company uses that as a strategy, it can be the long road to #IoT innovation. What businesses need to ask themselves are, “What business outcomes are they looking for and what innovations could be possible to shift their business model?”

We heard from the @OracleIOT group several business scenarios:

  • Break / Fix it – which drives a predictive prescriptive business process
  • Static Analytics – which drives the use of real-time, big-data analytics
  • Ownership – which drives as-a-service business models and
  • Central Service– which drives self-service as well as self-guided service.

new-business-modesl-for-iot

What they are finding is that there are various phases a business often goes through when deploying IOT. It can start with the devices or assets (trucks, phones, factories, etc…) which are then connected to a platform which are connected to a network. For a business to actually make use of IOT, the first phase, Phase 1 can be about Connecting Assets for situations like remote monitoring and asset tracking. Phase 2 is can be using Predictive Analytics which means designing predictive algorithms to transform decisions into proactive instead of reactive decisions and improving products and processes. Phase 3 can be about Service Excellence. This is where the customer or employee experience is affected. It is where IOT is being used to transform business processes by blending IOT into enterprise applications like ERP, SCM, Customer Support, CRM, HCM…

phases-of-development-of-business-maturity-use-of-iot

Some of Oracle’s IOT applications are in the areas of:

  • Asset monitoring for the utilization, availability and data from connected sensors
  • Production monitoring and prognostics of the equipment on the manufacturing factory floor
  • Fleet Management for business who have fleets of trucks, buses, delivery and maintenance vehicles
  • Connected worker for the tracking of employees, for instance in the mining, engineering construction industries.oracle-iot-application-to-business

Here are some examples of clients applying IOT to their businesses:

oracle-example-clients-using-iot

VINCI is building the next generation sensor-driven building automation to reduce the number of “truck rolls” which has a huge ROI. They are doing this with the integration or Oracle Service Cloud and SAP. Lochbridge is creating connected fleets where IOT and big data is being used for predictive maintenance in monitoring fleet / cargo to reduce the response time. GEMU is using real-time filtering and processing of valve events and proactive parts replacement with the integration of CRM, IOT and a service ticketing system. And SoftBank is using IOT to deliver mobility-as-a-service where they are monitoring vehicle location for billing and geo-fencing.

As the world of IOT expands and more and more companies start to see the value in connecting enterprise applications, with devices, and networks, we will see the transformation of workers, employees and customer experiences. When those experiences are transformed, the real value and ROI of the connected enterprise will come to life.

@DrNatalie Petouhoff, VP and Principal Analyst

Constellation Research, Covering Customer Facing Applications and IOT

 

 

 

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Where I am Speaking This Fall! Come Say Hello!

It’s a busy fall and I hope to see you all out there, whether in person or on a webinar. Here’s some of the places I will be:

1. Webinar: ROI of Social Customer Care Sept 6th @clarabridge http://bit.ly/2bvWzgJ #custserv #CX

(Here’s the report: http://www.drnatalienews.com/blog/roi-of-social-customer-service-how-to-calculate-it-and-create-a-strong-business-case )

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2. Think ROI of Social #custserv can’t be calculated? Think again! Webinar Sept 13th @clarabridge http://bit.ly/2bSN0vj

(Here’s the report: http://www.drnatalienews.com/blog/roi-of-social-customer-service-how-to-calculate-it-and-create-a-strong-business-case )

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3. Digital Transformation: the Digital Blindspot – don’t let it happen to your co #ITRATL Sept 14th @constellationr (Here’s the report: https://www.constellationr.com/research/digital-disruption-blind-spot-could-sink-your-iot-initiatives )

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4. Modern survival guide: Speaking on #custserv for Millennials #OOW16 Tues 11AM Sept 20th @constellationr

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5. Webinar: How #DPM is the new #CX Sept 28th @dynatrace http://bit.ly/2bDQq2X @constellationr

(If you’re not actively managing digital #CX you’re not doing it right. check out the report on how to make #CX the best in the biz http://buff.ly/2b2yjpW )

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6. Digital Performance Management #DPM #DXS16 November 14 – make your #customerexperience #CX really powerful http://bit.ly/2bCLNrE

(If you’re not actively managing digital #CX you’re not doing it right. check out the report on how to make #CX the best in the biz http://buff.ly/2b2yjpW )

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Dr. Natalie Petouhoff, VP and Principal Analyst

Covering Customer Experience and Customer Service, Digital Performance Management and Digital Transformation

 

 

 
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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:

Screen Shot 2016-05-26 at 10.11.29 AM

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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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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Dr. Natalie’s Research Agenda and Published Research

If you are wondering what I have been up to lately, I thought I would put all the research I have published  into one place. Here’s a list of Dr. Natalie’s completed and published research and soon to be published content! It ranges from IOT, Analytics, Big Data, Customer Experience, Leadership, Organizational Change Management, Storytelling, Collaboration, Digital Transformation, Social Selling, Social Media, the Cloud, Marketing, Sales, SaaS, IaaS, PaaS, DaaS, AI, Machine Learning, Innovation, Social Networks, Social Media Monitoring, Mobile, Customer Service and Customer Success Management….and a few things in-between…

IOT (The Internet of Things), Innovation, AI, Machine Learning, Analytics and the Cloud

• The Algorithm of You: How IoT Transforms and Differentiates Customer Experience: Using the Internet of Things to Boost Revenue and Deliver a Brand’s Personalized Promise

• Digital Disruption: The Blind Spot That Could Sink Your IoT and CX Initiatives

• The Internet of Things Improves Customer Experience in Retail Supply Chain

• The As-a-Service Economy: CX and IOT Mean You Have to Deliver Great Experiences- Upcoming

• Customer Experience IOT in the Automotive Industry-Upcoming

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Digital Transformation: Customer Engagement, CRM, Innovation, Customer Experience, Customer Service, The Cloud and Analytics

• ROI Of Customer Service & Customer Experience

• How to Measure Customer Experience: Performance Management Maturity-Upcoming

• Case Study: Elaine Turner® Brand and Oracle Commerce, Marketing and Customer Service-Upcoming

• The Need for Inspiring Leaders to Orchestrate Customer Experience Initiatives-Upcoming

• Experience Management: How to Deliver Integrated Customer Experiences

• How Rackspace Creates the Next-Generation Customer Experience

• The ROI Of Agile Customer Care: Reduce Training and Easy To Add Channels

• Digital Imperatives for Omni-Channel Retail Customer Experiences

• Nine Pillar Of Successful Self-Service for Digital Customer Engagement

• 6 Pillars of e-commerce Customer Engagement

• 9 C’s of Customer Engagement – Delivery and Communication Styles: Channels, Content and Cadence

• 9 C’s of Customer Engagement – People Centric Values: External & Internal Culture, Community, Credibility

• 9 C’s of Customer Engagement – Right Time Drivers: Context, Catalysts, Currency

• How Delta Uses Microsoft Dynamics and Avanade to Create Next-Generation Customer Experiences

• How Microsoft Dynamics CRM Improves Productivity at Trek Bicycle

• Delta Uses Microsoft to Transform Flight Operations and the Customer Experience

• New Belgium Brewing Creates Great Customer Experiences Using Microsoft Dynamics

• Beyond Journey Maps, Delivering Mass Personalization at Scale

• The State of Customer Service and Support Evolves 

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Social Media, Customer Service, CRM, Analytics, Innovation and the Cloud

• How General Motors Using Social Media To Listen To Customers and Sell Cars and Deliver Service

• The ROI of Online Communities: Online Communities Provide Value Beyond Call Deflection

• Why Top Marketers Create Branded Social Networks for Customer Engagement

• The State of Customer Service and Support Evolves 

• ROI of Social Customer Service- Upcoming

• The Customer Service Playbook for Integration of Traditional, Digital, Social and Mobile Customer Service Strategies and Technologies-Upcoming

• Mobile Customer Service-Upcoming

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Digital Marketing, Analytics, Innovation and the Cloud

• Should the Chief Marketing Officer Oversee the Whole Customer Experience?

• Data-Driven Marketing Campaign Optimization

• VentureBeat: Should the CMO Run the Whole Customer Experience?

• Executive Brief: Can Brands Keep Their Promise?

• Oracle Moves Its Focus from the CIO to the CMO

• How to Staff the Team for Effective Content Marketing

• The State of Marketing 

• Marketing Funnels Are Dead, What’s Next?

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Digital and Social Sales; Commerce, Innovation, Analytics and the Cloud

• How Sales Leaders and Sales Reps Can Create a Social Selling Organization: Convert Average Sales Teams into Top Performers Using Social Networks

• Five Approaches to Drive Customer Loyalty in a Digital World

• The Modern Sales Experience

• Continuity of Customer Experiences Drives the Future of Commerce

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Customer Success Management, Analytics, Innovation and the Cloud

• The State of Customer Success Management

• Gainsight: Customer Success Management for a Post-Sale, On-Demand, Attention Economy

• ServiceSource: Customer Success Management for a Post-Sale, On-Demand, Attention Economy

• Bluenose: Customer Success Management for a Post-Sale, On-Demand, Attention Economy

• Totango: Customer Success Management for a Post-Sale, On-Demand, Attention Economy

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If you are interested in learning about any of these reports or research, a speech or webinar on any of these or related topics, please reach out to me here!

@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research

Covering Innovative, Customer-Facing Applications that Create Great Customer Experiences

 

 

 

 

 

 

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I’m Judging the SuperNova Awards: Make Sure to Submit Your Case Study

I’m judging the 2016 Constellation SuperNova Awards! Every year the Constellation SuperNova Awards recognize individuals for their leadership in digital business. Nominate yourself or someone you know before August 8, 2016.

About the SuperNova Awards
The SuperNova Awards honor leaders that demonstrate excellence in the application and adoption of new and emerging technologies. In its sixth year, the Constellation SuperNova Awards will recognize individuals who demonstrate leadership in nine categories:
•  Internet of Things – A network of smart objects enables smart services. (sensors, smart ‘things’, device to purchase, artificial intelligence)
•  Data to Decisions – Using data to make informed business decisions. (big data, predictive analytics)
•  Digital Marketing Transformation – Personalized, data-driven digital marketing.
•  Future of Work: Social Business – The technologies enabling teams to work together efficiently. (enterprise social networks, collaboration, digital assistants)
•  Future of Work: Human Capital Management – Enabling your organization to utilize your workforce as an asset.  (talent management, benefits, HR core)
•  Matrix Commerce – Commerce responds to changing realities from the supply chain to the storefront. (digital retail, supply chain, payments, ‘ubiquitous-channel’ retail)
•  Next Generation Customer Experience – Customers in the digital age demand seamless service throughout all lifecycle stages and across all channels.  (crm, customer experience)
•  Safety and Privacy – Strategies to secure sensitive data (blockchain, digital identity, authentication)
•  Technology Optimization & Innovation – Innovative methods to balance innovation and IT budgets. (innovation in the cloud, ENSW cost savings, cloud ERP, efficient app production)
The SuperNova Awards are seeking leaders and teams who have innovatively applied disruptive technolgies to their business models as a means of adapting to the rapidly-changing digital business environment. If you have what it takes to compete in the SuperNova Awards submit your application today: https://www.constellationr.com/events/supernova/2016
If you are doing something really interesting, make sure to send in your case study! It’s your time to be recognized for your hard work!
@DrNatalie Petouhoff, VP and Principal Analyst, Constellation Research
Covering Customer Facing Applications that Drive Awesome Customer Experience
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From the Field: Capgemini Analyst Conference #capgemniAD16

Old Dogs Can Learn New Tricks: It’s never too late to transform yourself. Having been a system’s integrator many years ago, I found the transformations happening at Capgemni very inspiring. There was a period where many system’s integrators avoided the conversation about going to cloud and for good reason. Their business and revenue model was not shaped for the cloud. They were based for on-premise installations. Enter the cloud and everything changed. With the integration of IGATE and Capgemini, outstanding changes are definitely clear. Replacing McKinsey and Accenture in many digital transformation projects, they are looking to lead the digital transformation. Net new customers are over 200 and a 35% increase in the client base in North America. Though under NDA, the brands were very impressive.

What did Capgemini learn from IGATE? And I have to say I really appreciated all of the executives transparency and honesty in their process of becoming a digital transformation system’s integrator – including but not limited to Fernando Alvarez, Paul Hermelin, Srikanth Iyengar, Bill Ruh, Lanny Cohen, Tim Bridges, John Mullen, Dee Burger, Todd Rovak, Jean Pierre Petit, Frank Greverie, Doug Mills, Mathieu Colas and Andre Cichowlas. IGATE was known for the great client relationship capabilities. A client’s CIO had said, “I’ve never had a company pay more attention to my culture and my people and company that what we have experienced with IGATE.” IGATE is a new breed of company infusing it’s culture into Capgemini, with the key themes of speed, agility and imagination. And Capgemini vowed to learn from IGATE.

Capgemni’s Digital Business Model: It includes not only the “what” but the “how” of customer experience, including digital customer experience, digital organizational and people and digital operations. In terms of the “how”–  what digital seems to mean are areas like social & mobile, data, IoT, cyber security and cloud. There was a large focus on cyber security, as more and more customers are putting their data in the cloud. There is a focus on digital innovation as well as a digital ecosystem of partners and start-ups in the mix. There key digital capabilities include: innovation, digital customer experience, digital manufacturing and insights and data.

Fahrenheit212 Innovation Strategy and Design Company: They believe that innovation can be inherently reliable and have spent the last decade designing the method, building the model, and assembling the minds to make innovation a predictable driver of growth for our clients’ businesses. They believe most great innovations don’t come from consultants—they come from entrepreneurs and entrepreneurial organizations. Entrepreneurs are driven by a powerful force that counter-balances their challenger mentality. Namely, they have skin in the game. They don’t obsess over the process of innovation; they care only about the outcomes. And it’s why they make a good addition to Capgemini.

Since their inception, Fahrenheit 212 has harnessed this entrepreneurial approach through a performance-based compensation model that aligns our risk and reward with that of our clients. They offer their clients the option of putting a significant portion of our potential compensation at risk, contingent on their solutions hitting pre-determined success milestones. This means their ideas can’t just be interesting; they actually have to deliver actual business results.

Digital Manufacturing Is Hot: The digital manufacturing value proposition includes a comprehensive enterprise offer of smart product and plants, Capgemni IP and an extended ecosystem of subject matter experts and highly skilled resources. With a 180,000 Capgemini employees, they are looking not only to re-skill some folks as well as hiring new people.

Cloud Is the New Normal: Their cloud value proposition is that cloud first is the new normal. Of their North American clients, 80% want their applications in the cloud in some way- some pure cloud, others a hybrid model.

Competitive Roadmap For Capgemini: Capgemini’s competitive roadmap is one of quality of service  where they want to work with some of the most demanding clients on the most challenging projects with the most talented people in the world. Capgemini’s entry into the world of IoT, though under NDA, was very impressive and spot on. I look forward to see what comes of their partnerships and their vision.

@drnatalie petouhoff, VP and Principal Analyst, Constellation Research

Covering Customer Facing Applications, including the customer experience of IOT

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Internet of Things (IoT), Customer Behaviors and Increasing Digital Demand Signals Major Insurance Industry Disruption

How Does IOT and Customer Behaviors Affect The Insurance Technology Companies?

The World Insurance Report 2016 (WIR), released  by Capgemini, identifies multiple threats pushing the insurance industry toward massive disruption. The continued evolution of the Internet of Things (IoT), combined with changing behaviors and preferences from Gen Y1 customers, is driving the urgent need for insurers to undergo significant transformation or risk falling behind emerging competitors such as FinTechs.

What Did the Capgemini Voice of the Customer Survey Find?

Capgemini’s Voice of the Customer Survey, (which covered) more than 15,500 insurance customers worldwide, found that Gen Y customers are much less likely to have positive experiences with their insurers compared to other age groups, despite communicating with them more frequently. Gen Y customers have more interactions with their insurer across all communication channels, particularly digital ones. They interact with insurers up to 2.5 times more on social media than other customers and over two times more via mobile.

Gen Y Has Higher Expectations of Digital Experiences Than Older Generations Those interactions, however, are resulting in positive customer experience levels that are nearly 20 percentage points lower than those of customers in other age brackets, suggesting that Gen Y customers have higher expectations for the standard of digital channels than their older peers. Given that more than one-quarter of all customers plan to purchase or renew their insurance through digital channels in the next 12 months, customer experience levels among Gen Y customers is particularly concerning for the industry. In addition, nearly one-quarter of Gen Y customers say they would be likely to buy insurance from non-traditional technology-led providers, highlighting the threat from emerging competitors to the customer base of traditional insurers.

A Note From The Executives: John Mullen, Corporate Vice President and Global Insurance Leader for Capgemini said, “By not providing adequate engagement for digitally-advanced customers, carriers run the risk of pushing them toward a growing population of market entrants and non-traditional technology-driven competitors. Gen Y is clearly indicating that they do business differently and those insurers who respond to them on their terms will have a clear competitive advantage.”

IoT Poses Additional Threats As More Devices Get Connected to the Insurance Business Models

A more fundamental threat, or enabler, to the future of insurers is the coming wave of connected technologies, in the form of such innovations as smart home ecosystems, wearable devices and machine-enabled drones, robots, and cars. These IoT technologies are expected to transform traditional insurance business models, including everything from the way insurers connect with their customers to their fundamental assessment and management of risk. Yet despite this threat, insurers are significantly underestimating the degree to which connected technologies will be broadly adopted. Only 16 percent of insurers think customers will embrace driverless cars, for example, while 23 percent of customers express interest.

Gen X is More Likely To Adopt Connected Devices

More significant than age, affluence2 is the most compelling factor in determining customer uptake of IoT technologies. More than 45 percent of affluent Gen X3 customers are likely to adopt connected devices, smart ecosystems and wearables, compared to only 30 percent to 35 percent of younger, non-affluent Gen Y customers. Customers that are both Gen Y and affluent are the most likely to adopt connected technologies (50 percent). However, affluent customers are also more likely to purchase insurance from non-traditional technology-led firms. Nearly 31 percent of affluent customers globally say they are likely to purchase insurance from technology firms, a percentage that increases to 47 percent for affluent Gen Y customers.

IoT Is Expected to Have a Big Impact on Redefining Risk in the Insurance Business. In addition to its impact on customer connections, IoT is expected to have an even bigger impact on the core tenets of the insurance business. In a connected world, data provided by connected devices, smart ecosystems and wearables will increase risk transparency, a dynamic that will likely lead to new business models, especially in pricing and risk control. Risk ownership will also shift with connected technologies, as responsibility for actions, for example in the case of driverless cars, moves from car owner to car manufacturer. Finally and most important, IoT looms large in managing the level of risk exposure due to safer environments. This will shift premiums significantly, threatening some carriers, but providing opportunities for those who can understand the emerging risks that are inherent as the rate of technology change becomes more pervasive in the lives of people and commerce.

What Should Insurers Do? Insurers must start preparing themselves for the transformation of the insurance business. The report advises insurers to build strong but agile foundations in the short term. In the medium term, they must sharpen their value propositions through strategic alliances and data-driven insights. Long-term strategies must focus on transforming the business to stay ahead of emerging risk profiles, new interaction models, changing customer behaviors and IoT’s expected disruption of risk selection, pricing, and loss prevention.

“While already experiencing digital disruption, the insurance industry needs to brace itself for the massive, inevitable disruption brought on by Gen Y and the Internet of Things,” said Vincent Bastid, Secretary General, Efma. “Those insurers who make it a top priority to improve their ability to manage and leverage data and risk will be the most prepared.”

The World Insurance Report 2016 features data from more than 15,000 insurance customers globally through Capgemini’s Voice of the Customer survey and exclusive Customer Experience Index (CEI), as well as findings from more than 150 insurance executive interviews. The report’s research covers 30 markets across North America, Europe and Asia-Pacific representing 93 percent of the global insurance market in terms of premium income.

For more information visit www.worldinsurancereport.com

The report will be presented at the Insurance Summit in Milan on June 9-10, 2016. To register to attend the event, please visit: www.efma.com/insurance16.

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