Too many tech decision makers spoil the broth

 

Recent and ongoing discussions with industry stakeholders confirm to capioIT that the increasing complexity of technology procurement and decision-making is reaching a boiling point. capioIT estimates that major technology investment decisions now require an average of six to seven individual decision makers to agree to confirm a decision. This creates both a bottleneck to slow the decision process and quality, as well as difficulties in managing different business requirements and perspectives from the technology procurement.

The number of executives required to make a decision, let alone influence one, has increased steadily in recent years. Most will recall a “simpler” time when the number of decision makers, was two or three, and in some cases just the one. The shift to more decision makers is not all bad. Of course, a single decision maker is not the perfect outcome for many reasons, from an understanding of the depth of business, technology and outcome knowledge through to corruption risk. This is why government agencies and large enterprises avoided the single point of decision, not just for procurement requirements, but amongst other business processes such as recruitment.

It is important to accept that this increase in decision maker requirements is a natural outcome of technology increasingly embedded in a greater breadth and depth of business processes, and as a result decision makers. Business processes such as HR and Marketing now have a material interest in the investment and outcomes of technology for their functions. This is of course what an informed and integrated technology solution requires, but the increased complexity can have the downside of making agreed and unanimous decisions impossible.

Examples span the technology budget. Payroll was once a relatively simple, albeit critical business function, (for the average employee, it is often the most critical, we all prefer to be paid painlessly). In 2016, the decision is increasingly complex. The IT department, Legal, HR and finance are all critical inputs to the decision. In some cases, employee scheduling is a separate function with requirements, as is the compliance department. These multiple stakeholder requirements lead to clashes over contingencies, outcomes and vendor selection.

It leads to delayed decision making, and while the need for compromise is a positive to maximise results, it cannot be at the expense of concrete decision-making. Time to decision creates a vicious circle. The lack of a unanimous decision can have a negative impact, especially where implementation may go wrong, and the finger pointing begins.

It also makes the vendor’s life more difficult. Not everyone will have a problem with this, but it will add to the cost of sale and potentially the margin of the business. Identifying the stakeholders and decision makers becomes more difficult.

The worst thing to be for a client of a technology vendor is a loss-making contract. That is when short cuts are made and investment is limited.

Focus Point
The good news. Technology is embedded in more businesses, and as a result, more stakeholders are engaged. The downside. Decisions slow down due to the increased complication. Organisations need to decide the difference between which resources are involved in influencing a decision and which resources are actual decision makers, and “check signers”.

PAST is the future for the Contact Centre

 

In the late 1990’s when I first worked in contact centres, the most cutting edge innovation was the now redundant fax machine. Getting call centre agents and managers of an Australian insurance company in Australia to consider leveraging the humble fax was hard enough. Then having the discussion identifying the need for email based communications with, and from, clients was found to be just too radical. It was 1999. The insurance firm in question perhaps unsurprisingly has had near death experiences, although it has managed to survive.

In 2000 when I first provided analyst and consulting services on the call centre BPO market, it was all about offshore outsourcing. The shift from 1999 was proof even a stagnant market can move quickly if the fundamentals are disruptive. In 2000 the structural elements for call centres were focused on cost. Again, not everyone could embrace the technology and relate to the potential offered. Both vendors and internal service providers fell to disarray as they were unable to shift their capability and cost structure to take advantage of offshore outsourcing.

Fast forward to 2016. While a combination of offshore/nearshore/homeshore is the dominant service delivery model, the supply and demand side of the market is constantly evolving.

Enterprises globally are struggling to service their customers and prospects in a multi-channel environment. The expectation of service is measured against their best experience regardless of whether that is a bank, retailer, or any service provider. Online support is critical to ensure purchase or to manage post-purchase support. Deployment of Bots and online chat are standard. Cognitive computing tools are close to becoming mandatory to drive the customer experience, reduce costs and enable self-service for the customer. Meanwhile, “human” agents still matter, security of data, identity and process, is non-negotiable and technology is critical for the customer experience centre operator.

As a result of this capioIT believes that PAST is the future for the contact centre. PAST is the four underlying investments essential to optimize the contact center and to optimize customer outcomes.

 

People – The contact centre team is still the front line for the client. It is critical that the skills of the people on the forefront of the customer experience gain investment, training, and support. The contact centre is evolving, but it will remain a genuine career option for many and needs to be invested in with this in mind.

 

Analytics – Investment in analytics is undoubtedly critical for the management of the contact centre ecosystem. This mission critical status applies to both the management of the contact details, and subsequent optimization, i.e., customer contact method preferences, as well as for agent management. There is no excuse for contact centre providers not to have undertaken critical investments in predictive analytics, again across the board. As highlighted earlier, this investment also has to parlay into cognitive and Augmented Intelligence solutions.

 

Security – The security risk for the contact centre is as real for any other site that captures, stores and manages customer data. Threats exist inside the contact centre, as well as outside. Many contact centres have lurkers outside that want to coerce employees into giving access to classified information. At the same time, hackers are trying to gather customer information such as banking records. It is a constant battle. Investment to overcome this needs to look at the entire ecosystem of security. There is no point just having a focus on one facet.

 

Technology – As with other industries, technology is the core business process and investment priority that underpins all investment in contact centre environments. This investment is aligned with the People, Analytics and Security components highlighted above as well as for all other aspects. Without technology, at the centerpiece, it is unrealistic to be able to compete in the marketplace for new opportunities or to service existing clients. Technology will clearly restructure the roles and requirements from a human capital perspective in the contact centre. This cannot be positioned as a threat, rather as with all technology the opportunity to build and drive improved customer outcomes.

Focus Point

The contact centre market has continued to evolve over the last 20 years. It is no longer a function that can be simply outsourced or left to hang on the edge of the enterprise. Successful multi-channel centres can provide a differentiation point. This differentiation requires that investment is made in the PAST (People, Analytics, Security, Technology) to enable the future for the provider and its clients.

 

Wipro acquires Appirio – Further consolidates the Salesforce Solutions Market

According to capioIT, the acquisition of Appirio was when not if. Wipro considerably boosts capability in the as a service ecosystem, particularly in Salesforce.

On October 20th, 2016 Wipro and Appirio made the joint announcement that Wipro had acquired Appirio for approximately US$500M. Appirio was privately held, and the deal will likely close in December. It is the largest acquisition undertaken by Wipro. The deal provides Wipro with significant scale and capability in the as-a-service market, particularly in the fundamentally critical Salesforce and Workday solution marketplaces.

In short, the acquisition of Appirio comes as no surprise. capioIT has covered the Salesforce solutions market extensively. Before Dreamforce in 2015, the Salesforce market was unique whereby three of the top five vendors, as ranked by capioIT, were non-traditional SI’s and born in the as-a-service ecosystem. Now all three have been acquired, Cloud Sherpas by Accenture, Bluewolf by IBM and Appirio by Wipro. While Appirio had been very public in its desire to maintain independence, the knocking of the bankers clearly became too loud. Usually, everyone has a price.

The capability of Appirio and Wipro was recently ranked and assessed by capioIT. In September 2016 capioIT released capioIT Salesforce Services and Solutions Capture Share report – https://capioit.wordpress.com/2016/09/13/do-we-have-business-as-usual-in-the-salesforce-services-and-solution/. In this report Appirio was a leader, ranked in the market makers category, and 5th overall of the 14 vendors included in the study. By contrast, Wipro was a laggard, ranked at number 13. This fact alone sums up why this deal matters so much for Wipro and their strategic future.
The deal that is closest to this one is the Bluewolf IBM deal. There are three critical reasons for this
1. Before the deal, Wipro was a laggard in the Salesforce services ecosystem. The acquisition allows it to leapfrog to a leadership position (assuming it can properly maintain the capabilities, human, process and technology of Appirio). IBM was in the same position before the acquisition of Bluewolf.
2. Wipro will gain considerably regarding the number of certified consultants for Salesforce and Workday. This scale is critical. The firm had struggled in this respect. The joint capability brings the number of certified consultants much closer to the Deloitte, IBM capability, albeit far behind the runaway leader of Accenture. Again, this is similar to what was faced by IBM.
3. The existing Wipro Salesforce and related SaaS solutions will fold into Appirio. It appears that the brand will remain. Maintenance of the brand will create a similar outcome to the Bluewolf an IBM company branding. This is critical due to the relative strength of Appirio vs. Wipro in this market.

Clearly, capioIT is optimistic about this deal, with the usual caveat about the execution of the cultural and process integration. Wipro, as with most of the Indian vendors has been conservative about acquisitions, so it’s hard to predict how this will be delivered. Wipro is an expert at onboarding, so the transition should be smooth.

The deal should be a concern for many of the legacy SI vendors who just have not had a scale in the market. Tata Consultancy Services, Infosys, Cognizant, CapGemini, HCL, CSC/HP and Fujitsu amongst others are all subscale in the marketplace. Furthermore, according to the results of the Capture Share report for Salesforce Solutions and Services providers, these vendors all lag the overall market capability. Some such as HCL and Fujitsu lag considerably.

They will struggle to keep up with the growth in the SaaS, and of course, Salesforce/Workday ecosystem, maintain a special relationship with the vendors and clients when they just do not have the scale or model. Excellence in the SaaS Solutions market is not about Offshoring; it is about building assets and scalable solutions. These vendors face the challenge of having to organically grow scale in a market that is rapidly maturing but has significant issues with the supply and availability of skills and talent.

Focus Point
The acquisition of Appirio was a matter of timing. Wipro should be pleased with the capability they acquired. Appirio was a proven disrupter in the market. Wipro can now look to consolidate and be positioned for leadership in the marketplace. The challenge now lies to the vendors who are as yet subscale in the ecosystem to somehow leapfrog to the leadership opportunity that is now in the sight of Wipro.

Do we have Business as usual in the Salesforce Services and Solution Market?

Recently capioIT released the 2016 Global Salesforce Services and Solutions Market Capture Share Report highlighting leadership in this market. Here is further insight on the maturity of the market. capioIT Capture Share Report

Salesforce has fundamentally altered the software and broader enterprise IT market. It increased focus upon, and measurement of, business outcomes of technology, transformed software delivery models and forced stagnant competitors to attempt, largely unsuccessfully, to re-engineer their business. It has continually innovated and is a leader in multiple markets that extend beyond the initial cloud-based CRM revolution that first brought it fame.

Despite this, in the early history of Salesforce, the solution market largely underperformed. There were several reasons for this.

Firstly, the concept of SaaS was new, at least in the sense of being a successful business strategy, particularly in light of the ASP collapses. The marketing and sales pitch of Salesforce was that acquisition was a simple credit card transaction. This worked brilliantly to drive volume but made most buyers incorrectly believe that the requirement for integration, data governance and related services would be inconsequential. Not surprisingly, the ease of the model made many organisations take the view that Salesforce could be deployed at 100% of capability without IT involvement, or tellingly, even being aware. Unfortunately for all, this was incorrect. The outcomes of this are still being managed.

Consequently, requirements for services and integration accelerated with the increased enterprise demand. Slowly an independent services ecosystem was developed, firstly with small local providers, before the increasing enterprise corporatisation of the market to the current state, where the market is dominated by the usual suspects for application services and solution providers that largely, with some key exceptions, mirrors Oracle, SAP and Microsoft.

Now the market is closer to maturity, the key constraint for the Salesforce market is quite simple. It is the constriction of available resources in the marketplace in numbers, focus and geography. Salesforce simply will not grow without partner growth in numbers and scale. To help arrest this, Salesforce has made considerable investments in this critical aspect of their business. The Trailhead investments have been exceptional and act as an essential component linking IT and business users of the Salesforce portfolio.

The following factors have driven the demand for the growth of Salesforce solutions.

For the Salesforce users key drivers of growth in Salesforce solutions include:

• The realisation that Salesforce is an enterprise tool, and needs time and money to integrate.
• Skills in Salesforce are difficult to hire, let alone retain.
• Cost of labour is high at a global and regional level
• Increased appreciation of the depth of relationship that external providers have with Salesforce
• Strategic understanding of the focus of competitive differentiation that Salesforce can provide if executed to the potential of the product.

From the vendor or supply side perspective, there have been considerable changes. These include:

• Increase skills of offshore service delivery quality and scale
• The requirement to provide a more globalised capability and level of service
• Investment required to align the growth of Salesforce and extension of the Salesforce offering portfolio
• Development of IP-based repeatable assets for Salesforce deployment
• Tighter integration of technology and business capabilities and client requirements
• Increased skills to identify industry specific requirements

Capture Point 

The Salesforce market has matured rapidly. This has happened at both the supply and demand perspective for the investment. The maturation will come when the business itself is more fully realised, but the rapid maturity will continue. As Salesforce is more embedded into the enterprise, it will continue to be mission critical, the solution provider ecosystem will grow around this reinforcing the dynamic market nature.

capioIT Identifies Leadership in the Global Salesforce Services and Solutions Market

 

Salesforce continues to be a global market changer. It effectively created the SaaS market, killed the legacy monolith of Siebel, and created one of the strongest and most loyal communities in the enterprise technology ecosystem. This is best represented through the venerated annual Dreamforce event.

Undoubtedly the services market for Salesforce is as mature as the Salesforce product offering and capability. Both are successful, but neither is close to a fully mature functionality. This is both positive and negative. Salesforce is growing at an accelerated pace, both as an expanding business, and as a partner opportunity. The challenge for many partners is to focus on their core differentiation and to maintain and enhance synchronisation with Salesforce growth avenues.

The differentiated aspect of the global Salesforce services and solutions market (until Dreamforce 2015) was the pre-eminent emergence of independent vendors. Cloud Sherpas, Bluewolf and Appirio were all ranked by capioIT as amongst the top five vendors in the equivalent report for 2014. Fast forward to 2016, at the time of publishing, only Appirio remains an independent entity. Accenture acquired Cloud Sherpas in September 2015, and IBM accelerated a lagging Salesforce capability with the Bluewolf acquisition in early 2016.

Accenture has clear leadership in the market. This leadership has been achieved through a long-term vision for the current and future requirements of Salesforce clients and enabled with organic and inorganic investment. In the strongest measure of Accenture market dominance, Accenture has approximately three times more certified consultants than any other provider. This Accenture success and capability is critical for client engagement, but also enabling it to have proportional influence with Salesforce in managing and developing the future direction of the technology and platform.

capioIT included 13 vendors in the study. This is a similar number of vendors included in the 2014 study and is reflective of the consolidation but slow emergence of new providers. What is of note is the highly tiered nature to the partnering environment for Salesforce. Both the market and Salesforce must do more to establish a solid tier of mid-sized solution providers. This will come through acquisitions and mergers, and is critical if the solution capability is to mirror that of SAP and Oracle in terms of scope and influence. It is particularly relevant for the emerging markets for Salesforce. Salesforce cannot grow geographically without partners to support and enable.

The following vendors were included in the analysis:

• Accenture
• Acumen Solutions
• Appirio
• Bluewolf (an IBM Company)
• Capgemini
• Cognizant
• Deloitte
• Fujitsu
• HCL
• Infosys
• NTT Data
• PwC
• TCS
• Wipro

Capture Share reports are based on the analysis of 17 key capabilities and attributes of services providers. These attributes are focused in two key areas, Transform and Leverage. 

In order to undertake the appropriate level of analysis and data integrity, the individual attributes are weighted in percentage terms on the basis of the overall influence for the Transform and Leverage capabilities.

 

 

 

Is Innovation, not Invention the Missing Link for Google Enterprise?

 

Google is one of the great corporate success stories. It has redefined markets and destroyed incumbent providers in both the online and offline world. Just ask the yellow paper weight company, Yellow Pages what it can do.

It has invented a wide range of products and services. It is at the top of the tree for disruption. It has disappointed at the enterprise level. When compared with the other market leaders for innovation in the enterprise. Microsoft, Apple, Salesforce and AWS it has failed to come close to applying the dominance in our personal lives to that in our business life. This delay has had widespread implications of missed opportunities. It has helped create AWS, led to a partially revitalized Microsoft and has kept the door open for Facebook to become an enterprise provider of great potential (albeit, potential is the key word).

There are many reasons for this, from being a laggard to markets, failure to define the Chinese opportunity (it is not alone here), allowing a too rapid migration back to Microsoft for productivity suites, and others.

Another perspective is important when considering why Google has lagged. That is the focus on invention not innovation. CEO’s hate folly, they hate wasted investments. They love innovation and improving the bottom line with predictability and stability.

Microsoft, Salesforce and others are innovators in the enterprise space. They borrow, enhance and optimize technology, usually at an accelerated rate, to drive new customer offerings. They do not tend to chase folly. (This point could be argued for Microsoft to be fair, just consider Skype and LinkedIn).

Google on the other hand is an inventor. It is outstanding at this. It invents for Google and assumes that society will follow. Consumers do, enterprises less so.

It has a unique lab and R&D model that drives invention as the focus. The downside of this is that this comes with a fail fast approach. Fail fast is a great approach for lab-based products and for services that fail to win. It does not work for enterprises that have long investment windows and requirements for economic models that enable incremental improvement, not loss of investment.

A classic example of Google inventing for itself was the selection of Taiwan as a data centre location in 2014 for the needs of Asian enterprises. The data centre was brilliant, the POE was exceptional and it was a environmentally efficient as possible. So all the boxes ticked for Google. The only problem was it could not be in a worse location in Asia. No-one outside of Taiwan wants a data centre in Taiwan. The folly of the location undermined the potential brilliance of the location. Now Google is still playing data centre catch up in Asia.

It is possible that the new Google structure with Alphabet will overcome some of these issues and allow for longer term investments in enterprise outcomes to be leveraged. For the sake of the broader IT community and innovation in business outcomes, lets hope it can achieve this focus.

Capture Point

Quite simply, Google needs to drive an enterprise model that focuses on innovation rather than invention and fail fast. It needs to ensure that its innovations allow for long term investment by enterprises and to give the stability for both the client and partner community that is an outcome of the long term approach.

Does Your CEO Care Which Vendor the Enterprise Chooses?

Without fail, every vendor I speak with is always keen to inform me of their strategic nature for their clients, their role as a “valued partner” and how the client regardless of industry or function would not exist without their value, unique differentiation etc., etc.

To test this, I regularly like to ask customers this question. “Does your CEO know or care which vendor you choose?” The answer may upset, and be a surprise to many vendors who overstate their importance to the client. Regularly the CEO has absolutely no role, knowledge or insight into vendor choice, and definitely no engagement.

To be fair, there is some context to be considered. It is not for all IT investment.

Whilst the answer for the majority of technology investment is no, for ERP, core banking, production platform investments and other 1000% mission critical functions, the answer to the question has to be yes. The relationship must be real. If not, that creates more problems than any other issues.

 

For virtualisation, visualisation, performance management, CRM implementation, customer experience, network performance management, and a very long list of IT and business technology investments, in reality the answer is a clear no.

Don’t be under the illusion that every technology related investment is the same; in fact the examples such are core banking are the exceptions. IT vendors should not completely despair. If the same question is asked towards other business functions and third party providers, such as recruitment providers, marketing content agency etc., the answer will be equally as disappointing to those vendors.

It is perhaps a reflection on the failure of technology to communicate strategic value, that due to the nature of the investments, the answer for Operational Technology in comparison to IT is typically different story, and an area that as ever, traditional IT can learn from, but has a poor track record of doing so.

History, the lack of awareness of technology investments, organizational structure and the vendors themselves are all reasons for the disconnect.

There is more bad news for the mid-sized vendor who believes he has the ear of the CMO, COO, CFO etc., the reality is that for even this part of the organizational layer, there is a lack of awareness aside from signing the (virtual) Purchase Order.

The lack of visibility is not a minor issue. It impacts investments, marketing, and the entire relationship with the client. It can lead to inefficiency in investments as unrealistic expectations. The impacts on innovation are also important.

Is the client  more detached from your innovation than you believe. The answer again may disappoint.

Questions that the vendor needs to consider in the light of the detachment from the senior executive include.

• What does that mean for your level of “strategic partnership” with the client? Is it real, is it strategic?
• Can you change this?
• Is it practical to change this?
• Does your business partner have a similar level of relationship, or more importantly a similar level of detachment from the actual client experience?
• Are you wasting your time and capital trying to engage executives who are aspirational, rather than focusing on those who are operational and real users.

Capture Point

Most vendors of services to enterprises and agencies fall into the trap of significantly overstating their strategic importance to the client. As an economist, it is clear that this leads to significant inefficiencies in the relationship. 

A vendor has to consider the true level of engagement, and once this is considered the next task is to determine how to more realistically set expectations.