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Tuesday's Tip: Act Now To Leave The Door Open For SAP Third Party Maintenance Options

Tuesday's Tip: Act Now To Leave The Door Open For SAP Third Party Maintenance Options

The Real Deadline To Consider Third Party SAP Maintenance Is September 30th

In conversations with hundreds of SAP customers, many have not realized that they must act now in the next 30 to 45 days if they want to move off of SAP customer specific maintenance from extended maintenance for older products. Despite the support window ending in March 2013 for extended maintenance, SAP is requiring organizations to serve notice by September 30th, 2012 (see Figure 1). Key products impacted by this deadline include:

  • SAP ERP 2004 (ECC 5.0)
  • SAP NetWeaver 7.0
  • SAP CRM 6.0
  • SAP SCM 5.1
  • SAP SRM 6.0
  • SAP SRM 5.0
  • SAP CRM 5.0
  • SAP SCM 5.0
  • SAP Netweaver 2004
  • SAP SRM 4.0
  • SAP SCM 4.1
  • SAP R/3 Enterprise (4.7)
  • SAP R/3 4.6C

In past experiences, SAP has taken a hard line on the notification date and customers need to immediately take action should they wish to have the maximum support options available to them.

To be clear, those on SAP’s Business Suite 7 have a longer maintenance support window (see Figure 2.) Those products will be supported with mainstream maintenance until 2020.

Figure 1. SAP Maintenance Strategy and Support Time Lines For Older Releases (2010) Revised With 2012 Version

Figure 2. SAP Business Suite 7 Innovation Road Map Provides Longer Maintenance Until 2020

Customer Specific Maintenance Comes With Many Disadvantages

While SAP will tout many benefits of Customer Specific Maintenance, most customers can expect the following downsides:

  • Increase to 22% support fees* Same rate as existing maintenance program with no lower rate*
  • No new tax and regulatory updates
  • No new fixes
  • No new support packages
  • No direct upgrade path for new releases
  • No SLA’s for service and support

The benefits of the increase in support fees for most customers do not justify the benefits delivered by SAP maintenance.

*(Updated August 30, 2012)

Constellation was approached by SAP on this issue and was given an official response from SAP on a few key questions:

  • Can SAP Standard Support Customers Remain at the 18% in Customer Specific Maintenance? Customers who remained as an SAP Standard Support customer at the 18% price point, carry on to 18% in customer specific maintenance
  • Can an SAP Enterprise Support Customer downgrade to Standard Support in Customer Specific Maintenance? Customers with SAP Enterprise Support at the 22% price point can downgrade to the SAP Standard Support at 18% for all products and releases that the customer owns and not just the ones moving into customer specific maintenance
  • Are there any lower maintenance rates than the existing maintenance rates a customer pays today when they go to customer specific? Customers pay their rate based on the maintenance program.  The only exception would be for a Standard Support customer who has elected to receive extended maintenance for a specific release.  In this case, they would pay a 4% uplift on top of their 18% during the extended maintenance period. the uplift only applies ot the release they are covering with extended maintenance.  When the extended maintenance period for the particular release ends, the 4% uplift also ends and the release transitions to customer specific maintenance at the Standards Support price point of 18%

The Bottom Line:  Give Notice, Leave Your Options Open.

In numerous advisories and inquires with SAP customers, Constellation recommends that all customers with the impacted products give notice before the September 30th deadline for four key reasons:

  1. Explore third party maintenance. Filing notice allows organizations to consider and evaluate third party maintenance providers.  Arrange for a meeting or appointment right away to assess your current scenario. See how vendors are providing tax and regulatory updates and improving the operational efficiency of legacy applications.
  2. Improve negotiating leverage for 2013 maintenance contracts. Use the third party maintenance option discussion to create leverage in contract negotiations.  Take the time to negotiate credits for shelfware, park licenses, or plan upgrade paths.
  3. Avoid bundling of contracts. Keep existing contracts separate. Resist the temptation to consolidate contracts.  Consolidation means you can’t renegotiate licenses in increments.  Consolidation also eliminates options to sell your used SAP software in europe for credit.
  4. Stop playing contract support window games. Most customers face endless negotiation cycles that just pushes the issue into the future.  Every day a company is not on third party maintenance, is money wasted for stable products.

Your POV.

Need help with your SAP software contract?  Contact us throughout the vendor selection process.  We can help with a quick contract review or even the complete vendor selection.  We provide fix-fee and gain sharing arrangements.  We can also help you with your third party maintenance provider evaluation.

Let us know your experiences.  Add your comments to the blog or reach me via email: R (at) ConstellationRG (dot) com or R (at) SoftwareInsider (dot) com.

Related Constellation Research

Wang, R. “Best Practices – Three Simple Software Maintenance Strategies That Can Save You Millions” Constellation Research, Inc. March 8, 2012

Scavo, Frank & Wang, R. “Big Idea: Constellation’s Business Value Framework” Constellation Research, Inc.  January 31, 2012.

Wang, R. “Best Practices: Why Every CIO Should Consider Third-Party Maintenance.” Constellation Research, Inc. August 7, 2012.

Wang, R. “Market Overview: The Market For SAP Optimization Options” Constellation Research, Inc. May 11, 2011.

Wang, R. “Best Practices: The Case for Two-Tier ERP Deployments” Constellation Research, Inc. February 28, 2011.

Related Resources And Links

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20100308 Monday’s Musings: Decoupling Support From Maintenance – What Apps Vendors Can Learn From Microsoft Dynamics

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20090709 Tuesday’s Tip: Do Not Bundle Your Support and Maintenance Contracts!

20091222 Tuesday’s Tip: 10 Cloud And SaaS Apps Strategies For 2010

20091208 Tuesday’s Tip: 2010 Apps Strategies Should Start With Business Value

20091102 Best Practices: Lessons Learned In What SMB’s Want From Their ERP Provider

20091006 Tuesday’s Tip: Why Free Software Ain’t Really Free

20090504 News Analysis: Oracle Waives Fees On Extended Support Offerings

20080909 Trends: What Customers Want From Maintenance And Support

20080215 Software Licensing and Pricing: Stop the Anti-Competitive Maintenance Fee Madness

20090405 Monday’s Musings: Total Account Value, True Cost of Ownership, And Software Vendor Business Models

20090324 Tuesday’s Tips: Five Simple Steps To Reduce Your Software Maintenance Costs

20090223 Monday’s Musings: Five Programs Some Vendors Have Implemented To Help Clients In An Economic Recession

20091012 Research Report: Customer Bill of Rights – Software-as-a Service

20090910 Tuesday’s Tip: Note To Self – Start Renegotiating Your Q4 Software Maintenance Contracts Now!

20090721 Tuesday’s Tip: 3 Approaches To Return Shelfware

20090127 Tuesday’s Tip: Software Licensing and Pricing – Now’s The Time To Remove “Gag Rule” Clauses In Your Software Contracts

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2012 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

 

Tech Optimization Innovation & Product-led Growth Leadership Chief Experience Officer

Event Report: CRM Evolution 2012 #CRME12

Event Report: CRM Evolution 2012 #CRME12

CRM Continues To Evolve In A World Of Engagement

The CRM industry’s major non-vendor customer focused event kicked off at the Marriott Marquis in New York from August 13th to 15th.  Conversations with prospects and practitioners at the event highlighted a few emerging trends:

  • Shift from transaction to engagement. CRM traditionally focused mostly on the management, a bit on the customer, and very little on the relationship.  Major shifts in engagement strategy reflect a move towards two way conversations, unstructured information, and influence models.
  • B2B and B2C are dead. The notion of forced fit silos to represent a customer no longer applies. The world is rapidly move to people to people models and new systems must reflect this.
  • The rise of customer experiences. Prior to the coining of the CRM term, front office was the term which defined marketing, service, eCommerce, and sales force automation.  The move back to integrated customer experiences reflects a renewed interest in all the front office touch points and all the support in the back office required to support the customer experience.
  • SaaS/Cloud Best of Breed hell is a real issue. Rapid and random deployment of best of breed solutions versus mature suites results in some basic architectural deficiencies.  These deficiencies result in inefficiencies that impact the delivery of customer experience as  process, data, and meta data integration increase in complexity and cost.

The Bottom Line: Customers must focus on delivering a single source of truth in the fundamentals

Customers making the shift to next generation customer experiences realize that the basic laws of physics must not be violated.  Regardless of where key components reside, a single source of truth must be delivered to support next generation customer experiences.  This requires a strong blue print and engagement platform that delivers:

  1. Listening and intent
  2. Interaction history
  3. Master data management (customer master)
  4. Business process management
  5. Complex event processing
  6. Security and identity management
  7. Integration

Your POV.

Are you ready for the new shift to front office? What are you doing to deliver an integrated customer experience?  Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your business strategy efforts.  Here’s how we can assist:

  • Assessing social business/digital marketing readiness
  • Developing your social business/digital marketing  strategy
  • Designing a data to decisions strategy
  • Create a new vision of the future of work
  • Deliver a new customer experience and engagement strategy
  • Crafting a new matrix commerce strategy

Related Research:

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2012 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

 

Marketing Transformation Innovation & Product-led Growth Leadership Chief Experience Officer

Six Ways to Fully Support your Social Customer

Six Ways to Fully Support your Social Customer

Customer support organizations strive to deliver exceptional customer experience but often fall short of meeting the expectations of today’s media-savvy socially connected customer.  While it is important to deliver the right response to customers in a professional manner, this alone is not enough to retain customers over the long term.  To be a front runner in customer support, companies need to engage customers more proactively and personally by creating a sense of connectedness with them.  Although key performance indicators provide insight into how well agents are doing and surveys reveal customer satisfaction levels in general, socially engaged customers expects companies to recognize them and deliver a fast response regardless of channel used to initiate contact.  As customers continue to use their social networking sites such as Twitter, Facebook and blogs to request service or to post a complaint, it is time to evaluate if your customer support organization has what it takes to meet the demands of the socially connected customer.

First class customer engagement requires that support teams have the right skills and leadership to drive higher performance and defined processes to reduce call handling time. It also involves an integrated infrastructure that recognizes and responds to customers with the same information across all channels.  Customers exert more power today by posting online comments and blogs and have a much stronger influence with potential new buyers. The good news is that socially engaged customers tend to be better customers and spend more than those who are not. However, companies need to consider a new strategy that will fully engage its customers and deliver a personalized connection across all communication channels as social customer will also use other channels to communicate.  The following lists six steps that will improve your customer support portfolio to deliver the next generation customer experience.

  • Incorporate social response with customer support operations.  Social media response needs to adhere to the same business processes, workflow and business rules as other channels for customer engagement. This will ensure that customers will receive the identical level of support as other channels and obtain consistent information regarding their request.  Social media support cannot be an isolated marketing function but must be aligned with customer support departments for shared access to customer databases and adherence to business rules for supporting customer response.   
  • Gather cross channel analytics for insight into total customer experience.   Gathering customer information from traditional channels does not deliver a comprehensive view of your customer.  Effective analytics provides customer insight from structured and unstructured data to deliver a complete customer view.  Cross channel analytics include gathering relevant information from voice, email, chat, web usage and importantly social media.  Timely cross channel reports identify emerging trouble spots, provide competitive insight and detect trends early.
  • Customize responses with contextual insight.  Gathering contextual information allows companies to fine tune their response and provide relevant information to the caller. This may include location information, time, customer relationship and other information that provides a more individualized a response.  Contextual response creates a sense that the company has the customer’s best interest in mind and wants to deliver products and services that align with their preferences.
  • Integrate agent desktop for rapid information retrieval.  Regardless of the complexity of customer support systems and aging back office data bases, companies need to provide agents with a seamless flow of customer information that not only brings up information without toggling back and forth among applications but also recommends next steps based on current activities and past history.  The desktop needs to support all contact channels and auto-populate information across all databases.  This greatly reduces account handling errors, shortens call duration and also provides an opportunity to upsell an account with relevant offerings.
  • Use chat for contacting customer at time of peak interest.   When a potential customer is browsing web sites for information, certain triggers may suggest that this is a buying opportunity.  Web chat is a way for companies to engage customers and get them to the right level of support to facilitate an actual sale.  Web chat also reduces live calls for assistance by proactively sending customers the information needed to solve their problems.  It is important that responders have the right skill sets and information available to handle Web chat conversations for it to eliminate live calls.
  • Support mobile applications with assisted service.   Although marketing departments create most mobile apps, handling mobile requests for service should take place within the app itself and not require the customer to leave the app and make a call.  This requires an integrated application that will link directly to customer support where responders can help the customer immediately.  As mobile apps begin to become a dominant source for customer contact, efficient handling of mobile apps will create a positive experience for the customer.

All of the above applications offer a means to provide customized support that engages customers.  Although there are costs associated with adding new applications, the payback can be relatively fast. Savings occur by call avoidance, shorter call duration and faster times for problem resolution, as well as an improved customer experience.

New C-Suite Next-Generation Customer Experience

Market Maker 1:1: #HRTechConf Preview w/ Bill Kutik

Market Maker 1:1: #HRTechConf Preview w/ Bill Kutik

15 Years of HR Technology At The Industry’s Premier Event

The fifteenth annual HR Technology Conference and Exposition returns to McCormick Place in Chicago October 8th to 10th, 2012.  HR Tech is the industry’s longest running event looking at technologies that influence the Future of Work.

The Inside View With Bill Kutik – Future of Work Pioneer And Co-Chairman of HR Tech

Since 1990, Bill Kutik has been a Technology Columnist for Human Resource Executive® (and for HREOnline™ since 2006,), also serving as co-chairman of the magazine’s famous annual conference, HR Technology® Conference & Exhibition, since it began in 1998. In 2008, he started The Bill Kutik Radio Show®, a bi-weekly online talk show with industry leaders.

HR World named him one of “The Top 25 HR Influencers of 2007.” More recently, he was named a “Top 25 HR Digital Influencer 2009? and a “Top 100 Influencer.”

For 20 years, he was consulting editor for Esther Dyson’s leading computer industry newsletter, Release 1.0. Previously he was the founding editor of the monthly magazine, Computers in HR Management; managing editor of Ziff-Davis’ Computer Industry Daily; and a reporter for The New York Times and The New York Daily News. He has also published articles in Newsweek, Washington Post, Institutional Investor, New York Magazine, Business Month, IHRIM Journal, Cruising World and Backpacker (where he was the founding editor).

We sat down with industry pioneer Bill Kutik for a preview of this year’s event:

1. Where do you see the new trends in HR tech going? What’s changed since last year? (Have we moved beyond Cloud, is everything social?)

Bill Kutik (BK): This year marks an inflection point in HR technology – perhaps in all of IT – the end of one era and the beginning of another, a generational shift in computing.

It happens every 10 – 15 years and remarkably HR has often been at the leading edge of change, either because corporations thought it didn’t matter if IT experiments failed there or because it’s the only department that touches every employee in the company.

Remember, PeopleSoft released the first packaged client/server application (for HR but the first for any function) in 1989, which started the death of the mainframe. Salesforce CEO Marc Benioff’s claims aside, HR has been using hosted applications (perhaps not anyone’s version of true SaaS) for recruiting since 1998 and major web-based applications since 2000.

Now the combination of SaaS (Cloud Computing) plus Social in the Enterprise – companies using private collaborative software to get real work done – are marking a new era in computing.

These will be among the major topics this year at the HR Technology® Conference in Chicago, October 8-10.

2. Why the continued interest and investment by organizations in HR and related technologies?

BK: The main reason is the 50-year-long lie in large type in corporate annual reports is finally seen as true: “People are our most important asset.” People costs, even in manufacturing firms with huge capital investments, are more than 50 percent of the annual run-rate. Obviously closer to 90 percent in knowledge-based firms like consulting, law, accounting and software.

To succeed in 2012, organizations must have an effective people strategy aligned with their goals. They must identify the best players, assign them to the right work and keep them engaged. Technology doesn’t create this strategy – executives do – but they can’t properly execute their strategy without the right technology to enable it.

HR technology isn’t for HR anymore. The latest applications reaching mass adoption – such as the Talent Management suite – are now used almost exclusively by line managers and employees after HR has purchased the software and configured it properly.

3. Are 2012 HR technology budgets increasing compared to prior years?

BK: Generally speaking, corporations continue to expand their investment in HR technology globally. According to the latest Towers Watson survey of organizations headquartered in the U.S., corporate HR technology spend continues to increase in the U.S., albeit at a slightly lower rate than in years part:

• 27 percent of respondents reported spending more in 2012

• 57 percent about the same as 2011 and

• 16 percent spending less.

But Towers Watson, one of three long-time international HR consultancies, found a substantial increase in Asia for HR IT spend (34 percent spending more), which was reflected in our conference attendance last year: eight executives from four organizations in South Korea and attendees from Indonesia, Hong Kong, India and China. Brazil had seven executives from five organizations.

Further cementing the global embrace of HR technology, 40 percent of respondents to Towers Watson based in EMEA are spending more on HR technology in 2012.

4. What are some expected highlights of the show?

BK: The star of the show is clearly “Taking HR to the Cloud – Naomi Lee Bloom’s Master Panel” featuring the six most senior enterprise software executives to appear together on any stage. Ultimately, they have responsibility for the five most important HR systems in the world, as well as hundreds of other enterprise applications. They are:

• Steve Miranda, SVP Applications Development, Oracle

• Sanjay Poonen, President Global Solutions, SAP

• Stan Swete, CTO, Workday

• Mike Capone, CIO, ADP

• John Wookey, EVP, Social Applications, Salesforce.com

• Adam Rogers, CTO, Ultimate Software

The secret star on that list, of course, is John Wookey, who was Steve Miranda’s boss at Oracle in charge of all strategy and product development including Fusion, spent three years at SAP creating its first OnDemand SaaS applications, and now spearheads Salesforce’s entry into HR. At the moment, I understand he is temporarily running all products there.

Another general session, “Awesome New Technologies for HR,” is always a favorite. During July and August, I watch about 120 online demos from start-ups and established companies looking for six product demos of disruptive technologies that will knock the attendees’ socks off. They winners tend to come in two categories: A standard HR function done in a whole new way no one ever considered or a brand new function that HR never considered doing!

One of my other highlights is Yvette Cameron’s solo presentation on “The Social Enterprise: New Tools Transform How Work Gets Done,” which is the whole point of our Social in the Enterprise track. The founder of NextGen Insights – and a former PeopleSoft, Oracle, SAP, JD Edwards and Saba executive – she is also VP & Principal Analyst of your Constellation Research Group.

5. Any tips for first-time attendees?

BK: The conference and exposition are going to be huge: The largest in the world for HR technology and the biggest in our 15 years with more educational sessions (42) and more exhibitors (230+). For a first time attendee (or a returning one), my best advice is do your homework in advance before arriving. Download the pdf of our 24-page brochure http://bit.ly/Lbay7s and read about all the sessions or work through our website http://bit.ly/gOOKKr, which also has hot links to all our exhibitors.

Every moment for two and a half days, most attendees tell me they feel pulled by at least three things they want to do, including talking to that expert or this other attendee they just met. Well, it might be maddening but wouldn’t it be a shame if they didn’t know about the other three sessions, which might be even more useful? Problem is there are no weak sessions at HR Technology, and big companies that return every year – such as Accenture, Charles Schwab, Procter & Gamble and Target – tend to send teams of four or more to cover it all. Some send as many as ten or 14!

We have a mobile app with all the session descriptions, presenter bios and exhibitor marketing necessary to create your own personal schedule and send you reminders complete with maps. But I don’t think anyone wants to read all that on their iPhone for the first time 10 minutes before sessions start!

I like to think of the event as Brigadoon: a once-a-year international gathering of everyone who cares about HR technology: HR executives, every guru, analyst and consultant, plus nearly every vendor. We had about 4,600 people counting everybody, except the janitors, last year. Talking with them is every bit as important as attending sessions or visiting the show floor.

So my strongest recommendation to attendees is to check their e-mail and social networks before breakfast and before going to sleep and shut them off all in between! Their greatest opportunity is six feet away from where they’re standing, and not in their hand.

Special Registration Discount Offer

Bill’s been kind enough to provide a registration discount code for the event.  Just use the Promotion Code RWANG12 (all caps) when you register online at www.HRTechConference.com to get $500 off the rack rate of $1,795. The discount does not expire until the conference ends on Oct. 10. Note that’s almost 2 months away!

Your POV

Are you ready for what’s next in HR Technologies?  Will you be shifting your strategy based on the future of work?  Add your comments to the discussion or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us.  For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2012 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

 

Future of Work Innovation & Product-led Growth Leadership Chief Experience Officer

In Anticipation of the HR Technology Conference

In Anticipation of the HR Technology Conference

hrt_logo_2l

It’s coming.  That annual event that calls together the technology leaders and rising stars; innovators and educators; providers and users of all things HCM technology. The “gathering of the clans” (as the Scots would say) as old friends and colleagues touch base to see who’s working where this year.  A 3-day long festival of information, technology, networking and, I’ll admit it, FUN, that never fails to yield new ideas and important new connections. 

I’m going to be at the HR Technology Conference this year.  Will you?

Every year I look forward to attending the annual HR Technology Conference & Expo with great anticipation. For many of us, the event is truly like a family reunion, bringing together old friends from across the HR Tech industry to reconnect and share experiences gained since the previous year’s conference.  For some, it’s about the swag.  For everyone, it’s an awesome venue to see the latest innovations, engage with and learn from peers across the industry and to walk away with the information and connections needed to make those often career-making decisions back in the office.

With more than 25 years experience in the HCM space, I have embraced my inner HCM geek; for me, HR Tech is the ultimate geekapalooza.   I look forward to three days steeped in conversations around HCM processes and technology.

But this year will be different.  This year it gets personal.

I’m excited to be speaking for the first time this year at HR Technology, where I’ll have the opportunity to share findings from my research that point to very exciting and real opportunities for the HCM industry, and the ever evolving role of HR.

Despite its early morning start (9:00 am Wednesday morning, after the previous evening’s myriad parties)  I’ll be on hand to present the  “The Social Enterprise:  New Tools Transform How Work Gets Done”.  This session will be anything but ordinary.  (i.e., don’t miss out, even for an open bar the night before!)  There are many new tools on the market for supporting emerging ways of working across the enterprise: social goal and task management tools; ideation and innovation accelerators;  innovative approaches for creating and collaborating around user-generated content; expertise identification via location-based and mobile solutions; and many others.  Other tools outside the traditional “HCM” market are also emerging as important “talent” technologies, such as social sourcing and management of the ever growing contingent workforce, and workforce analytics that take their cue from lessons learned in the customer analytics arena.

Cool?  You bet.  Hyped?  Absolutely.  Generating real business value?  In some cases yes, but success depends greatly on things like your underlying strategy, implementation approach and organizational culture.

If you’re looking for a pragmatic approach to understanding the application of these technologies within your organization, please haul yourself out of bed early Wednesday morning and join me.  I’ll promise you free coffee and a great hour of discussion.

Bill Kutik tells me that hotel rooms are filling up fast, so if you’re planning to attend, register now.  And if you register with the Promo Code YVETTE12 (case sensitive)  you’ll also get $500 off the on-site rate – larger than the discount advertised in the brochure, and there is no expiration on this discount.

I hope you’ll be joining me at the HR Technology Conference this year. The surest way to find me will be to attend my session at 9am Wednesday, October 10, and I’ll see you afterward.

I hope to see you in Chicago!

 

Future of Work

Trends: The Battle For CMO Mind Share

Trends: The Battle For CMO Mind Share

Marketing and Advertising Budgets Are The New Land Grab

Constellation Research, Inc. predicts that the global advertising market (paid search, display, and classified) will hit $125B by 2015.   While IT budgets continue to stay flat, marketing budgets are up.  Warc’s recent Global Marketing Index (GMI) entered positive territory in March 2012.  Consequently, the heat up in marketing and advertising market attracts not only start-ups, but also tech vendors looking to enter this lucrative market.

Solution Providers Rediscover The CMO Budget

In just less than 28 months, enterprise software vendors have bolstered their presence with Chief Marketing Officers mostly through acquisitions and partnerships.  The goal – capture budgets allocated for digital creation, marketing automation and revenue optimization, advertising, CRM and customer experience, analytics, and information brokering (see Figure 1).

Figure 1.  The Battle For The CMO Budget Comes From Six Fronts

Why the change? Marketing sits at the cross roads between the old analog world and the new shift to digital transformation.  With each big shift, organizations will change what technologies they invest in, who they decide to partner with, and how quickly they will make the shift.  This new battle for CMO mind share started when IBM purchased Unica for $480M in August 13, 2010 (Figure 2).  The frenzied activity by Adobe, Dell, Eloqua, Google, Hubspot, Kana, Marketo, Oracle, Salesforce.com, and SAS Institute reflect the desire to be top of mind among CMO budgets.

Figure 2. The Rapidly Changing Landscape In Marketing and Advertising Technology

 

The Bottom Line: Digital Transformation Is A Must Have For The New CMO

Digital transformation is no longer a nice to have in the halls of the CMO.  In fact, today’s CMO will complete the shift from analog to digital in the next three to five years.  This shift corresponds to a shift from transactions to engagement.  In the design of new engagement strategies, CMO’s will rely more on digital models.  While analog will not go away, CMO’s expect to embed digital components into analog models for not only tracking, but also improved outcomes.

Consequently, three trends will arise in the market:

  1. CMO’s get tech savvy. The consumerization of IT is among us.  Business leaders such as CMO’s must get up to speed on how disruptive technologies will transform their business and their business models. The shift to digital transformation requires the adoption of new competencies in addition to the existing marketing skill sets.  CMO’s will need trusted advisers who understand their requirements.  Meanwhile, CIOs must design policies and procedures to support the extension of CoIT to new leaders.
  2. Tech emerges as a core competency in agencies.  Vendors need access to the marketing decision makers.  Today, agencies own the trusted relationships that solution providers need for access.  Technology vendors will partner up with agencies in a similar fashion as system integrators.
  3. System integrators will partner with agencies. System integrators will tie up with agencies to provide the tech skills the agencies lack.  In many cases, marketing outsourcing and marketing process outsourcing will emerge.  System integrators will also get into big data outsourcing by brokering information into subscriptions that marketers and agencies will consume.

Your POV.

Are you a CMO barraged with technologies that make no sense?  Do you need a trusted advisor who can explain what this means?  Planning a new customer engagement strategy?  Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your business strategy efforts.  Here’s how we can assist:

  • Assessing social business/digital marketing readiness
  • Developing your social business/digital marketing  strategy
  • Designing a data to decisions strategy
  • Create a new vision of the future of work
  • Deliver a new customer experience and engagement strategy
  • Crafting a new matrix commerce strategy

Related Research:

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2012 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

 

Marketing Transformation Innovation & Product-led Growth Leadership Chief Experience Officer

Press Release: Bob Zukis Joins Constellation’s Board of Advisors

Press Release: Bob Zukis Joins Constellation’s Board of Advisors

Former PricewaterhouseCoopers Partner brings social business and strategy management experience to research and advisory firm focused on disruptive technology.

LOS ANGELES, Calif --Constellation Research Inc, an award-winning research analyst and advisory firm helping clients navigate emerging and disruptive technologies, announced today the addition of accomplished international management consultant Bob Zukis to the Board of Advisors.  A pioneer in helping Boards and C-level executives understand the disruptive power of social technology, Zukis possesses a deep understanding of the relationship between information technology and business in the creation of corporate value which runs parallel to Constellation’s mission of practical applications of technology in the C-Suite. Zukis will lend this expertise to Constellation analysts in the formulation of research in the Consumerization of IT and the New C-Suite and Next Generation Customer Experience research themes.

Bob Zukis on social media technology in business management: “The social technology conversation is moving well beyond marketing, and these tools are a powerful competitive weapon that companies can use to drive revenue, productivity and profitability.”

Constellation Research also sought Zukis for membership on the board for his expertise in working with boards to improve IT governance, an area of burgeoning importance that is inadequately addressed in current research. Clients of Constellation Research, Inc. can expect development of research in this area with Zukis’ guidance.

About corporate governance of boards Zukis said: “There is an incredible opportunity being presented with this technology, but there are also new risks.  Potentially big ones.  Boards really need to wrap their arms around these issues, and quickly.”

In addition to serving on Constellation’s board, Zukis is the Social CEO of Saaskwatch Systems and an Advisor to The Center for Digital Transformation at the University of California, Irvine.  He is also on the NACD SoCal Board.  Previously, Zukis led a successful twenty-nine year career as Partner at PricewaterhouseCoopers. Zukis’ PwC career spanned four continents and twenty countries and was focused on helping global firms find their future with new products, services and markets.

Bob Zukis said, “The next chapter in business management is being written right before our very eyes with social technology.   All bets are now off.   This is the most disruptive technology development for business I’ve seen in 30 years.”

Constellation Research, Inc. CEO, R “Ray” Wang said, “We're excited to have someone of Bob's expertise and caliber join Constellation.  Bob's experience with Board of Directors and Constellation's business theme focused research, resonate well with organizations seeking a trusted partner for innovative research and advisory.  We're looking forward to improving our board of director offerings and working with Bob on making sure we provide the right level of content and service offerings.”

Constellation Research’s Board of Advisors play a key role in shaping the research agenda and providing advice and guidance to its members. Board members bring significant industry experience, represent the leaders in their field, and serve in 6 to 12 month terms. These esteemed individuals:

  • Guide research direction
  • Advise on business strategy
  • Maintain an outside-in perspective
  • Deliver mentorship from seasoned professionals
  • Garner input from clients and prospects
  • Grow the constellation of experts
  • Identify new talent
  • Maintain and exude the Constellation values in public

Advisory Board members do not have a commercial relationship with Constellation nor are they represented by Constellation. Board members do not have fiduciary responsibility.

COORDINATES
Twitter:@bobzukis
Geo: Los Angeles, California

 

ABOUT CONSTELLATION RESEARCH

Constellation Research is a research and advisory firm focused on disruptive and emerging technologies. This renowned group of experienced analysts, led by R "Ray" Wang, focuses on business themed research including the Future of Work; Next Generation Customer Experience; Data to Decisions; Matrix Commerce; Technology Optimization and Innovation; and Consumerization of IT and the New C-Suite. 

Constellation's collection of prestigious analysts bring real world experience, independence, and objectivity to client solutions that span cross-role, cross-functional, and cross-industry points of view. Clients join Constellation Research for a fresh and business focused perspective.

Unlike the legacy analyst firms, Constellation Research is disrupting how research is accessed, what topics are covered, and how clients can partner with a research firm to achieve success. Over 100 clients have joined from an ecosystem of buyers, partners, solution providers, c-suite, board of directors and vendor clients. 

For more information about Constellation Research, visit www.ConstellationRG.com

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Constellation Research, Constellation SuperNova Awards and the Constellation Research logo are trademarks of Constellation Research, Org. All other products and services listed herein are trademarks of their respective companies.

 

2012 Technology Trends: Call for Survey Respondents

2012 Technology Trends: Call for Survey Respondents

Over at Computer Economics, we've now launched our 2012 Technology Trends survey, and we're looking for qualified IT executives to take a 15-minute survey about their technology investment plans.

What's in it for you? If you complete the survey, we'll send you a complete copy of the final report (a $995 value).
 


In this year's survey we're asking about your organization's adoption and experience with 13 technologies:

  • ERP
  • Customer Relationship Management (CRM)
  • Supply Chain Management
  • Human Resources Management Systems (HRMS)
  • Data Warehouse/BI
  • Social Business/Collaboration Systems
  • Legacy System Renewal
  • Software as a Service (SaaS)
  • Public Cloud Infrastructure (IaaS)
  • Platform as a Service (PaaS)
  • Unified Communications
  • Desktop Virtualization
  • Tablet Computers. 

Want to know more? See a summary of the final report from last year.

Tech Optimization

Community Forums Offer New Way to Differentiate Customer Service

Community Forums Offer New Way to Differentiate Customer Service

Customer community forums provide a meeting place for customers to engage with fellow customers in order to share ideas and information, get tips on product usage and access knowledgeable subject matter experts.  Importantly, early adopters find that community forums differentiate them from competitors by providing interactive ways for customers to engage and find support.  Forums aggregate relevant product information and usage ideas and share pertinent information to online communities.   As more customers become members of a company’s community forum, it is essential to monitor sites and add fresh content to provide a wide range of valuable and actionable information to consumers. 

For many organizations the creation of community forums originates in the marketing department. However, it is also important to involve customer support in the planning stage and design a site that encourages interactive participation of customers.  A well-designed forum becomes a valuable source of information and encourages customers to resolve issues independently.   It provides advisory services and helps customers find answers through FAQs and access to product experts who may be knowledgeable customers or in-house product managers.   Additionally, community forums have a huge potential for reducing the need to speak to agents, which lowers support costs.

Companies encourage active user participation by recognizing customers who regularly support the community forum and often give them special titles such as valued advisor or company ambassador.  Customers enjoy this acknowledgement and may also receive rewards, such as special discounts or coupons.  This is enough to incent some customers to reach a top rank advisor status and continue active participation.  Engaged customers are the most loyal and forums help them identify more strongly with the company’s brand.

Although there are costs associated with developing a community forum and supporting it, the ROI for this investment can be short.  Customer loyalty and engagement are factors to consider. as well as the savings from call reduction or shorter call duration.  It is important to identify the more routine reasons customers call for support and post information on these topics.  The cross conversations between marketing and customer support can ensure that content is kept up to date and relevant.

The sponsor for developing a community forum needs to gain consensus between marketing and support departments, as well as the executive team, on the need for a forum and clearly define how it will differentiate customer engagement.   Selling the project internally is essential to getting the cross functional support needed to deliver a quality experience.   It is essential that the content plan is applicable to the customer needs and not be merely a clone of the web site.  Once the site is launched, on-going monitoring and testing will safeguard the content and make certain the users gain value.

Want more? See Social Communications and Customer Support - A Winning Combination

 
Next-Generation Customer Experience

Tuesday's Tip: Why Context Matters: Forget Real-Time, Achieve Right-Time

Tuesday's Tip: Why Context Matters: Forget Real-Time, Achieve Right-Time

The Real-Time Hype Is Filled With Flaws

The hype around big data, social media, and mobility has many folks imagining the real-time enterprise in the future of work, next generation customer experiences, matrix commerce, or the data to decisions journey.  While real-time theoretically leads to quicker information and faster response times, the reality requires closer examination for three reasons:

  1. Customers and employees only want engagement aligned with self interest.  Relevancy of information is required for customers and employees to respond.  Real-time interactions quickly evolve into noise.  Signal to noise ratios must be improved as garbage in will lead to massive garbage out.  In some cases, customers don’t want engagement. They just want the experience.
  2. No human can truly handle the volume and flow of real-time interactions. The proliferation of channels and data sources creates a data deluge.  Filtering is required in order to handle real-time.  Workers already inundated with email, sms, and chats, really just want to get work done, they don’t want to be bogged down with more interactions.
  3. Real time is not fast enough. Real-time is reactive not proactive.  Anticipation and prediction emerge as key requirements.  Reaction does not lead to a better customer experience or employee interaction.  Some customers want options to make the right decision.  The same customers may expect a system to remember a preference based on many factors including repetitive behavior.

Delivering Context Is The Secret To Right Time Success

Context provides the key ingredient in improving outcomes. Why? Context provides the relevancy required for not only anticipation, but also prediction.  For example, offering a premium channel upsell to an upset cable customer when their cable is down, may not be the wisest idea.  Unfortunately, this happens too often.  The customer is already upset that the issues have not been resolved and yet the company is still trying to sell instead of resolve an issue.  However, offering a free appetizer triggered by a location based service during the morning commute, may lead to higher sales as this is a right time anticipation of a dinner time offer .

The Bottom Line: Start With Seven Dimensions of Context Drivers.

Consequently, the key to right-time is context.  By delivering information in context, organizations can address business problems in the future of work, next generation customer experience, matrix commerce, and data to decisions.  Constellation identifies seven key triggers for context in a right-time world (see Figure 1):

  1. Relationships. An individual may serve as an employee, a parent, part of a community group, or other designation.  Understanding the relationships help brands and organizations understand a broader set of experiences that answer the question “Who and What”.
  2. Time. Time provides temporal information.  Time provides related services that answer the question”When”.
  3. Location. Placement by geo-spatial coordinates helps with narrowing geographic relevancy.  Location answers the question of “Where”
  4. Business process. Process helps determine flow and work order.  Process answers the question of “How”
  5. Role. While related to relationships, the role is different because it addresses eligibility.  Individuals can play different roles among a wide variety of relationships.
  6. Sentiment. Sentiment seeks to understand how an individual feels about an issue.  Sentiment answers one dimension of the question of “Why”.
  7. Intent.  Intent anticipates future behavior.  Intent answers the second dimension of the question Why”

In the design of an engagement strategy, success will require organizations to factor the seven dimensions of context drivers.

Figure 1.  Seven Drivers for Context In a Right Time World

 

Your POV.

Are you ready for right time?  Do you have an example of how context improves your efforts at matrix commerce, future of work next generation customer experience, and data to decisions?  What’s next for your engagement strategy?  Have a story on how you’ve achieved engagement? Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Please let us know if you need help with your business strategy efforts.  Here’s how we can assist:

  • Assessing social business/social CRM readiness
  • Developing your social business/ social CRM  strategy
  • Designing a data to decisions strategy
  • Create a new vision of the future of work
  • Deliver a new customer experience strategy
  • Crafting a new matrix commerce strategy

Related Research:

Reprints

Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales .

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

* Not responsible for any factual errors or omissions.  However, happy to correct any errors upon email receipt.

Copyright © 2001 – 2012 R Wang and Insider Associates, LLC All rights reserved.
Contact the Sales team to purchase this report on a a la carte basis or join the Constellation Customer Experience!

 

Data to Decisions Innovation & Product-led Growth Leadership Chief Experience Officer