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Ventana Research: Modernizing Business with Digital Technologies

Modernizing Business with Digital Technologies Best Practices in Business Transformation

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Ventana Research: Modernizing Business with Digital Technologies

Table of Contents The Digital Transformation Imperative 3 Enablers of Digital Transformation 4 Analytics 4 Big Data 5 Cloud Computing 5 Collaboration 6 Mobile Technology 7 Social Media 7 Wearable Computing 8

Financial Management Best Practices 9 Case Study: Revitalizing Finance 10

Human Capital Management Best Practices 12 Case Study: Modernizing IT and HR 14

Customer Experience Best Practices 15 Case Study: Keeping Up with the Customer 17

The Promise of Business Transformation 19 About Ventana Research 20

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Ventana Research: Modernizing Business with Digital Technologies

The Digital Transformation Imperative Change can impact any aspect of business, from daily operations to processes that develop and transport products and services to relationships with customers to sales and profitability, and any size of business, from large enterprises to midsize and smaller companies. The rapid pace of change in business today is no longer news; it’s an accepted condition that every organization must deal with if it hopes to maximize its success. Nonetheless, it is breathtaking. In such a fast-paced business environment, continued reliance on established ways of doing things will work, more or less, for a while – then it won’t. Sooner or later, new approaches are needed. Whatever the specifics of those new approaches, fast and full responsiveness will always be a core requirement, which means that inefficient manual processes that can’t keep up must be replaced. The same is true of outdated business applications and information systems.

Organizations must identify and put in place modern best practices that enable them to re-engineer and standardize operations, streamline processes and deliver their products and services quickly.

To maintain and potentially improve competitive positioning, organizations must identify and put in place modern best practices that enable them to re-engineer and standardize operations, streamline processes and deliver their products and services quickly in the ways that customers prefer. They must, in other words, undertake a digital transformation, adopting new approaches to efficiency and effectiveness that are facilitated by innovative technology.

But not every technology will do. Today’s users insist that their systems and tools be easy to access and use but sophisticated in the capabilities offered, while cost-conscious management demands that they be operable without significant IT involvement or oversight. Moreover, to be able to respond to challenges to market share, business people demand that their technology help them easily find and take advantage of opportunities with limited resources. Choosing to embrace the innovations that today’s digital transformation offers can position organizations of all sizes to compete effectively as the 21st century evolves.

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Ventana Research: Modernizing Business with Digital Technologies

Enablers of Digital Transformation In the economic cycling of the marketplace, established companies have seen their markets invaded, and sometimes conquered, by nimbler new competitors. Often this occurs because their antiquated processes and systems are outmatched by the competitors’ innovative technologies and by modern business models that make it easier to satisfy today’s demanding customers. While technologies constantly come and go, it is these innovative approaches that have lasting impacts. They endure because they help organizations work more cost-effectively and become more agile and responsive to change and to opportunity. In its benchmark research, Ventana Research has examined seven categories of innovative technology that are changing the face of business: analytics, big data, cloud computing, collaboration, mobility, social media and wearable computing. Our research findings make clear that by adopting some mix of them, businesses can modernize their processes and their people’s work habits and thus improve their performance and competitiveness. But embracing new tools alone can’t guarantee success. To be fully effective, organizations must use them in ways that take best advantage of their capabilities. Toward that end, we have drawn from our benchmark research fundamental best practices that can be applied in the use of each of these technology categories.

Analytics  Use analytics to understand business performance. Evidence abounds of the increasingly important role and impact of business analytics. In our benchmark research on business technology innovation, participants from organizations of all sizes ranked analytics first in importance among the technologies assessed for improving performance or value. More than half (52%) of organizations said that business analytics is very important to them, and nearly half (46%) have been using it for more than a year. Among those participants, two-thirds (69%) declared themselves satisfied with their process of creating analytics. Almost threequarters (71%) of organizations use their analytics technology at least once a day, and here again two-thirds (67%) of those are satisfied with it.

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Ventana Research: Modernizing Business with Digital Technologies

One key use of information derived from analytics is to create and update metrics, which are critical to identify areas for organizational improvement. The research finds that the largest percentage of organizations use metrics about performance (79%), but more than half use metrics about profit (65%), people (56%) and processes (53%); compliance (45%) and risk management (39%) metrics also are prominent. Organizations that do not yet use analytics should take these findings as reasons to evaluate it; those that have deployed it in one or two areas should consider where else it could contribute to understanding and performance improvement.

Big Data

Organizations that have invested in big data and those that plan to both cited improved communication and knowledge sharing as their most sought business benefit.

 Harness the power of big data to exploit business opportunities. Asked in our research what value they have realized from their big data investment, more than one-fourth (28%) of organizations said that it has improved the results of their activities and processes significantly; in addition more than half (56%) said their results improved slightly. The business benefits most often improved were communication and knowledge sharing (cited by 50%), management and tracking of progress of initiatives (40%) and organizational alignment and coordination (33%).

When it comes to technical achievements, organizations that have used big data technology for less than a year identified faster analysis (40%) as their primary benefit while those that have used it for more than a year cited reduced time and effort (38%).This demonstrates the quick win potential of utilizing big data: It makes it faster and more cost effective to use technology to process data. As big data is applied to business there are opportunities to further engage the potential from business processes and new opportunities. We advise organizations to assess big data’s potential to process information and prepare it for analytics as well as identifying the business results it can help produce. Use these as criteria in product evaluations and implementation plans.

Cloud Computing  Embrace the cloud to save money and improve accessibility. Our research shows that cloud-based deployment has improved significantly the availability of applications and information for one-third of organizations

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that have deployed it; those that have used it for more than a year reported significant improvement even more often. The cloud computing benefit organizations cited most often (by 40%) is lower costs. Understandably, those on the business side are more enthusiastic about the benefits of cloud computing than those in IT as they are its primary users and beneficiaries. Among the benefits anticipated by those planning to move to the cloud, lower costs and better communication and knowledge sharing ranked first (both cited by 39%), followed by better management and tracking of progress and initiatives (33%) and faster response to opportunities and threats (29%). The last two suggest that cloud-based systems can help companies change direction quickly. Our research indicates that organizations adopting cloud computing often realize the benefits they seek. We therefore view it as worthwhile to make the effort to understand what this technology could do for yours.

Collaboration  Utilize collaboration to engage the workforce. Business and social collaboration ranked second to analytics among innovative technologies in its importance for improving performance or value. Three in five (60%) participants said it is important or very important to their organization; roughly the same percentage of organizations have been using collaboration technology for more than a year (31%) or began to use it within the last year (28%). Most of those that don’t currently use collaboration will do so eventually; only 8 percent of organizations said they don’t intend to use business and social collaboration. Despite this widespread use, though, only 17 percent said they are very confident that they use this technology well, and nearly half (46%) are just somewhat satisfied with the collaborative capabilities they use. Partly this reflects the conventional tools many organizations consider as enabling collaboration; the most common, by substantial margins, are email, file sharing and internal instant messaging. Even in the newer social sense of collaboration, shared folders and documents, videoconferencing, instant messaging and application sharing are the tools most widely used.

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As your organization evaluates how collaborative tools can enhance performance – and most said that they can – we recommend looking at more innovative forms of it such as Facebook-like wall posting and Twitter-like broadcasting; these, the research finds, are likely to be in use by 63 percent and 58 percent, respectively, of organizations in the near future. Consider also social recognition for contributing to or accomplishing tasks and earning badges and rewards, which two in five (40%) are planning or evaluating to use.

Mobile Technology  Use smartphones and tablets to provide rapid access. Mobile technology is here to stay, and not just among consumers. Our business technology innovation research confirms that it has penetrated deeply into businesses as well: It ranked third in importance among innovative technologies, and three-fourths (74%) of participating organizations said mobile technology and business-related mobile capabilities are important or very important. More than two-thirds (70%) of organizaThree-fourths of tions are using it, and about the same percenorganizations said tage of participants said they are confident or mobile technology very confident that their organization uses it effectively. and business-related

mobile capabilities are important or very important. Two-thirds have been or have begun using it.

The data makes clear that this innovation is a must for businesses. So far, however, most organizations (63%) have enabled mobile device access for only some of their business applications and information. Once the organization has gotten the devices into the hands of employees, providing access to all relevant sources and tools is the next step, and it should be a priority in planning for gaining value from mobility. Address also how to acquire the devices – the research finds that more than half (58%) purchase smartphones for their users and 43 percent pay for tablets – and provide support for them. To set priorities, determine optimal mobile access paths for people and applications and decide which devices will serve the business’s interests best.

Social Media  Understand the value of using social media for business. Social media has value for business, our research finds, but it also provokes skepticism because of its consumer roots. This technology ranked last among innovative technologies in importance for improving an organization’s performance or value; only 6 percent of business technology innovation benchmark research participants ranked it number one, and while 16 percent said it is very important, the same percentage said it is not important.

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Mistrust of the technology is reflected in the assertion by one-fourth (26%) of organizations that they will not adopt social media or do not know when they will. The reasons given are that it poses a security risk (cited by 50%), will encourage people to waste time (37%) or will have no positive impact on business (34%). These are not unreasonable concerns for those who view social media as a consumer phenomenon. Thus, demonstrating its business value and answering such objections should be major parts of Demonstrating the planning any initiative. The research suggests business value of that this may require trial-and-error testing to social media and identify proper uses and develop best practices. Consider beginning to use social media in answering objections marketing, sales and human resources and exconcerning security, pand later to other processes that will benefit time-wasting or a from people working together effectively.

lack of business value should be major parts of planning any initiative.

Wearable Computing

 Increase situational awareness and responsiveness. Maintaining the wellness of employees is vital to ensuring that the workforce is present, productive and satisfied. Wearable computing devices and associated applications provide individuals with information and choices regarding their health and their personal and job goals. Using them can help prepare members of the workforce to perform their jobs capably and meet their goals and the organization’s. Wearable devices can facilitate communication with workers whose roles require notifications in areas ranging from field services to line workers in manufacturing and service industries. Wearables also can easily provide monitoring and notifications that enhance productivity and operational efficiency. Each of these innovative technologies has roles to play in the modern business – roles that are rapidly evolving. Thus another best practice is to adopt flexible approaches that prepare the organization to take advantage of new applications as the technology and associated processes mature.

In this paper we consider three central areas of business, highlighting modern best practices in each. We also offer brief case studies of organizations that have innovated in embracing digital transformation.

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Financial Management Best Practices In responding to business change, Finance is a laggard, our benchmark research confirms. New ERP applications, tools and techniques are available to enhance the effectiveness of finance organizations, among them the use of analytics, cloud computing, collaboration and mobile technologies, but many finance departments are slow to move away from familiar processes and systems. For example, they have been the least likely of all major functional groups to want to deploy software in the cloud, our research shows, despite the fact that the potential cost savings and operational advantages should appeal to them. If performance improvement in Finance is a goal, we recommend considering adoption of best practices that our research shows well-performing organizations have embraced:  Take steps to make Finance more strategic. Our research confirms that most executives want their finance department to play a more strategic role in management of the company. But in our Office of Finance research only half (50%) of participants said Finance performs very well in advanced tasks such as product and customer profitability management, strategic and long-range planning and business development. We advise finance professionals to initiate discussion about broadening the department’s view of its role and evaluating changes necessary to do so. Part of that process should be engaging people through collaboration and addressing access to information through mobile technology.  Assess the suitability of the current ERP system. These systems are a main source of financial and other data. In our Office of Finance research nearly half (46%) of all organizations said their principal ERP systems have been in service for seven years or longer; fewer than one-fourth (22%) are two years old or less. This is true for companies of all sizes. To determine the sufficiency of an existing ERP system, review the frequency and nature of upgrades or other enhancements to it. The research shows that 70 percent of systems that are five years old or more have undergone a major upgrade within the last four years, and more than half (54%) have done so within the last two.

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Also consider its usability: Three-fourths (76%) of those that said it’s easy to work with their ERP system also said that it works well or very well. Newer ERP systems have added usability through collaboration and mobile access and accessibility and manageability through cloud computing. In addition, virtually every participant (96%) said that functionality is an important or very important evaluation criterion for finance software. Consider whether moving to a cloud-based system can provide added capabilities without investment in on-premises software and hardware and thus can give companies of all sizes more confidence in such a move.  Conduct regular reviews of key processes. In our view, monthly or quarterly reviews of business processes and related issues are essential to identify and address problems, but our Office of Finance research finds that only one-third (35%) of companies perform regular monthly assessments of their accounting close and cash and treasury management, and fewer than half (42%) review these two areas on a quarterly basis. Nearly two-thirds (63%) said their organization reviews technology only as needed, if at all. Frequent reviews contribute to development of a continuous improvement management style that prevents organizational inertia. Business processes like budgeting and planning, the financial close and procurement can be adapted using modern Business processes best practices that make them more efficient.

like budgeting and planning, the financial close and procurement can be adapted using best practices that make them more efficient.

Case Study: Revitalizing Finance For companies whose business is social media, challenges constantly arise as technologies continue to evolve. One such organization, which has prospered since the early days of online social interactions, now finds itself again needing to adapt as mobile devices supersede desktop computers as the platform of choice for key demographic sectors.

“Our client base is aging out, and we’re trying to become more relevant to millennials,” the company’s controller explains. One issue is that its mobile app, derived from the desktop version, lacks the functionality and flash that younger users want. Other systems also are outdated. Its IT infrastructure is 10 years old, and applications are dispersed among its lines of business. One element of the challenge it faces is not technological but corporate. It is owned by a holding company and has been coupled with a larger business based 2,000 miles away; the two share what is now a legacy accounting platform. The parent recently announced a restructuring that would make the

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social media company a separate business entity, which requires it to move off the accounting platform and the partner’s servers. The controller says he viewed this as an opportunity to modernize business processes. This modernization started from the bottom up, including adopting a new enterprise resource planning (ERP) system that manages transactions and finances. But rather than try to build a new IT base on-premises and implement ERP from scratch, he decided the company would look for an established cloud-based platform, a move that would address most of the infrastructure issues. “When we are done everything will be in the cloud,” he says, including data storage. The new platform must include analytics that can operate on the company’s mass and variety of social media data, a step that’s critical for expanding its user base. When the project started, the controller recalls, “We didn’t know who our customers were. We knew [the numbers in] revenue and users had been dropping, but we didn’t know why.” Half of the company’s electronic invitation business is in birthdays for children, so the company needs to be able to use data to appeal regularly to younger parents. The controller and his team compared several cloud-based vendors of financial systems. They found that in the mature ERP market packages had similar capabilities, so reliability and usability would be the major differentiators. Eventually they chose Oracle ERP Cloud. The vendor promised fast implementation and provided a timeline that helped with moving other back-end systems. “We’ve been able to stay on track and on The purpose of this time,” the controller reports.

self-service empowerment Through the availability of dashboards will be to make unit managers more responsible for their own budgets.

In the old system business unit managers had to ask Accounting for most of the reports they needed to track their budgets. Now they will have dashboards in which they can run their own reports. The purpose of this self-service empowerment, he says, will be to “make them more responsible for their own budgets.” The system should also provide to the CEO and other executives information for decisionmaking much faster. The Oracle database will store data in a single place, rather than on individual drives as previously, so it will be more consistent and easier to apply analytics to.

Eventually all the finance applications will undergo a similar rejuvenation, he adds. Accounts Payable, for example, will gain automated controls that manage the workflow of invoices so the proper manager receives and signs

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off on it electronically, speeding payment. The finance systems should run more smoothly, increasing organizational efficiency. Even more importantly, better data management and analytics will help the company move toward its future. The existing technology has difficulty managing mobile IDs and usage, the controller notes, but with advanced analytics users will be able to track who is using the site and how, and provide input into designing a new app that creates better mobile experiences for customers. The company plans to extend its business beyond invitations to events. It’s a bright prospect for continuing innovation in the second generation of social media.

Human Capital Management Best Practices To support the various aspects of human capital management (HCM), organizations often use separate systems for human resources management, talent management, workforce management and payroll management. Such a situation challenges process continuity and effective HR management. Unifying key activities such as recruiting, onboarding, performance management, learning management and compensation management, all of which are crucial to motivate, develop and engage employees, should be a priority. Many organizations are examining ways to create a consistent platform on which HCM applications can interoperate across the Web and mobile devices. Toward that end, we recommend considering adoption of best practices that our research shows well-performing organizations have embraced:  Establish a recruiting framework to attract and hire talent using social media. More than half (57%) of the participants in our benchmark research on social human capital management said that social recruiting is important or very important to their organizations, and nearly all of them (93%) use Webbased social media. In addition, more than half (56%) incorporate internal collaboration tools and processes into their talent management initiatives. Social media can extend an organization’s ability to identify new talent pools and improve recruiting processes and quality of hire; all are important to our research participants.

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We recommend a deliberate approach to assess this dynamic new technology as a business tool: Find out where it is being used already, identify other areas where it could provide benefits, and develop plans for investment and policies for use. The research shows that HR and recruiting budgets will be the predominant funding source for organizations’ future purchases of social collaboration software. It also finds that HR and business leadership will be the executive sponsors of social collaboration use. Consider this arrangement, but make sure it will be the best for your organization.  Assess and compensate employees according to performance. Compensation is the primary motivating force for many workers. By evaluating compensation By evaluating management practices and identifying shortcompensation comings, an organization can manage its investments in employees efficiently and align management practices them to strategic workforce performance and identifying goals.

shortcomings, an organization can manage its investments in employees efficiently and align them to strategic workforce performance goals.

Before an organization can take action to establish strategic compensation policies, HR and Finance must agree on the direction. According to our benchmark research on total compensation management, the benefit that companies most desire is being able to align their workforce to their business strategy and goals (52%), followed by efficiency of process (50%), having visibility into employee compensation, performance and succession information (40%) and establishing pay for documented performance (39%).

 Connect learning programs to business processes. To gain a more complete view of employees’ capabilities, we recommend linking learning management systems to other human capital management activities. An array of responses to our benchmark research on nextgeneration learning management show that most participants have not done much of this yet, so it could be a source of advantage for those that do. The research also finds that new technologies are impacting learning. More than three-fourths (78%) of organizations that have adopted social learning tools find them useful to some degree, and 42 percent of those that use socially sourced content for learning said it is important or very important. In addition, more than one-third (35%) now use mobile devices to access learning programs, and four out of five (79%) intend to do so.

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Look for ways to derive more value from learning programs by linking them to key HR processes and exploring the value of new learning technologies.

Case Study: Modernizing IT and HR As the Affordable Care Act takes effect and the baby-boom generation ages, demand for qualified healthcare workers has skyrocketed. This private college offers education and training for nurses and other healthcare professionals as well as lifelong professional development learning through online courses and conferences. Recently it has experienced rapid growth, expanding the number of its locations and the types of degree programs it offers. Two years ago, management evaluated its information technology and processes and decided that change was necessary there, too. “The overall objective was to modernize and use the technology of tomorrow today,” says the institution’s chief information officer. His directive was “to take an antiquated IT organization and make it an enabler for our operations.” The team soon recognized cloud computing as a desirable alternative to continuing to use in-house IT resources for some operations. “From an operations perspective,” the CIO explains, “we needed to focus on core activities and give peripheral items to someone else to manage.” In practice, this meant moving functions to the cloud. For its first initiative the organization chose its human resources function, which he says was “very labor-intensive.” Data had to be input and reconciled manually, and errors occurred often, requiring time to fix and annoying employees. In addition recruiting and hiring were sluggish, paper-based processes that delayed making offers to desirable candidates at all levels, most critically new faculty to teach the expanding number of students and courses. The organization aims to be student-centric, the CIO says, and time employees did not have to spend on their own HR matters could be devoted to student needs. Likewise, relieved of HR-related tasks the IT team could focus more on supporting student-related operations. For example, IT could focus on establishing data integrity and scalability, with the goal of growing as fast as needed in this competitive marketplace.

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The college selected Oracle Global Human Resources Cloud as a platform environment for all its HR systems, from core HR management and benefits to performance evaluation, talent management, recruiting and training. The availability of a comprehensive yet integrated suite was a key determinant, according to the The availability of a CIO, because adoption could eliminate reduncomprehensive yet dancy, standardize data and enable systems to speak to each other. It also meant the transfer integrated HR suite of management of the systems to the vendor, was a key enabling IT to concentrate on the core compedeterminant, tencies needed to advance the business.

according to the CIO, because adoption could eliminate redundancy, standardize data and enable systems to speak to each other.

Another selling point was the ability to run a standardized system that incorporated best practices. “Our intention was not to customize the software,” the CIO says. By avoiding customization the school could adopt HR best practices that had been tested and built into the software. As examples, he cites benefits configuration and processing, the annual open enrollment for healthcare and use of rules for various calculations.

HR automation encourages more self-service so users can get quicker answers. With the cloud-based communication tools and streamlined process workflows, “their frustration level is reduced” in how HR tasks are handled, he adds. The presence of an automated HR system with a consistent user interface has facilitated process improvements for the college. Employee performance evaluations now are documented in a consistent, transparent process. And there is no waiting for paper recruitment documents to be sent and returned; it’s all done in the cloud. As a result, the CIO notes, “If hiring managers want to move fast [to hire talented candidates], they can get the documents filled out and signed right away.” Finally, he observes, cloud computing helps level the playing field. A smaller organization such as his is able to take advantage of innovations it otherwise would not have access to at an affordable price. As a result, the cloud will be an option for other migrations as the institution pursues its objective of focusing on what matters to its students.

Customer Experience Best Practices Customers today engage with companies through a variety of communication

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channels that include email, corporate websites, text messaging, instant messaging, social media, smartphone applications and video. As the available communication channels and options have changed, so have consumer expectations. To keep up, so must businesses. With maximizing customer satisfaction and retention an increasingly high priority, customers must be engaged and their loyalty reinforced through the timely delivery of superior customer experiences. To manage this more complex engagement model effectively, companies need to develop new processes, integrate them into their customer service activities and train employees how to use new technologies. By supporting mobile and social interactions, for example, organizations are able to respond to a new generation of customers who expect to interact through whatever channels and whenever they prefer. We recommend considering adoption of best practices that our research shows well-performing organizations have embraced:  Engage customers through multiple channels. Our benchmark research on next-generation customer engagement shows that 90 percent of organizations now support multiple channels of communication with customers. However, many of them said that integration of systems is difficult, implementing and operating new channels is expensive and their responses to customers are inconsistent. We view these as opportunities rather than obstacles. Use the need for integration as an opening to achieve greater consistency across communications: Consider adopting new channels popular with customers, such as mobile applications, social media forums, Web self-service and chat. Uniformity of response will substantially increase the likelihood of providing a great customer experience no matter what channel of interaction is used. Consider using a voice of the customer program to ensure actions are informed by customer feedback. Compare the advantages of built-in integration available by choosing to use a single vendor; such a unified approach may make it possible to access more capabilities.  Rethink customer service metrics to target effectiveness.

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Two-thirds (66%) of organizations are seeking to improve their customer satisfaction score, more than for any other customer-related metric. Yet among the four metrics our research finds are most commonly used to assess the success of customer engagement only one, first-contact resolution, concerns a business outcome. The others all track operational efficiency: average call- handling time, agent quality scores and cost to serve a customer. To get serious about maximizing customer satisfaction, we recommend relying more on business outcome metrics such as customer lifetime value, customer effort score, net promoter score and customer wallet share. These analytics and key performance indicators are a foundation on which to manage service and interactions to deliver superior customer experiences.  Assess performance in engaging customers. Improving the customer experience will require use of modern technologies that simplify interactions and engage customers better. Evaluate your organization’s performance using the Ventana Research Performance Model and take steps to adopt the best practices of the most innovative companies. Ensure that the evaluation of performance focuses on more than just the customer service department; it should include as well all other venues where interactions and engagement occur, such as marketing and sales.

Intensifying competition means retailers need to know their customers better to keep them, and applying analytics to derive insights and guidance from the big data generated by these new technologies can make that possible.

Case Study: Keeping Up with the Customer

One of the business sectors most affected by recent technological change is retail. Social media, collaboration and mobility have become major factors influencing consumer communications and shopping. This is fortuitous, since intensifying competition means retailers need to know their customers better to keep them, and applying analytics to derive insights and guidance from the big data generated by these new technologies can make that possible. But to gain those insights, companies must first engage with their customers. That’s the view of the chief operating officer of a specialty retailer in the action sports industry: “You have to create a seamless shopping experience for customers and engage them in dialogues around things that are important to them.”

This growing retail company sells the same well-known brands as larger retailers but lacks their resources. Therefore it knows it must make smart

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investments to be able to provide customers with at least as good an experience as the big companies can afford. And because its target demographic is young, from age 14 to 24, a group that includes high percentages of early adopters of new consumer technology, the COO understands it must adopt the emerging tools and approaches sooner than would be the case for retailers speaking to an older audience. The company had been relying on a home-grown Web application that needed continual infusions of money and internal resources to keep current. However, the system’s limited scalability made the process of continually enhancing it to stay in step with market changes unsustainable. To replace it and begin to update the company’s capabilities it purchased Endeca InFront for customer experience management, running it in-house. After Oracle acquired Endeca in 2011 and after due diligence, the retailer deApplying analytics to cided to broaden use to the cloud-based Oracle customer data, the Commerce Platform, which includes the renamed Endeca product and Oracle ATG Web COO says, “We get a Commerce. It already had moved applications better focus on what outside its core competencies – human resourthey’re looking for ces management, for example – to the cloud and how we’re doing and so had confidence in the technology. Subsequently, the company added Oracle’s cloudon executing to the based Social Relationship Management and experience. That Cross-Channel Marketing Solution.

helps us deliver better solutions.”

Soon after the move the company began a customer loyalty program. Applying analytics to data on customer transactions, frequency of shopping and results of surveys, the COO says, “We get a better focus on what they’re looking for and how we’re doing on executing to the experience. That helps us deliver better solutions.”

Given its customer demographic, he says, “We have a mobile-first mentality” that includes both mobile apps for online shopping and mobile point-of-sale systems in its stores. The company also emphasizes social collaboration, using it to communicate to customers and invite them to communicate back through user-generated content. These channels all are supported by Oracle Commerce Cloud. While technology is a crucial enabler for today’s customer relationships, the COO notes that often it “is easier to implement than the process change that has to occur” – in this instance, organizing a distributed workforce of thousands of people and devising processes and work methods to fulfill

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orders accurately and meet customer expectations. And, of course, doing that in a way that is timely and cost-effective. “These days the commerce aspect touches almost all parts of the organization involved in how we deliver that experience,” the COO says. The project team kept in mind that customers would not care about any internal divisions or agendas; only the experience matters to them, and they want it to be “These days the seamless and consistent.

commerce aspect touches almost all parts of the organization involved in how we deliver that experience.”

A major benefit of Oracle Cloud is scalability, he says. In the past the website would slow down significantly in times of peak use, particularly holiday shopping. Now the site performs consistently regardless of load, he reports, giving management more confidence in the consistent quality of the customer exper– COO, ience it delivers. The implementation included action sports combining separate mobile and desktop websites, which simplified management, providing retailer a single site with consistent content that suits the preference of its customers for mobile access. “The ability to deliver varying personal experiences cannot be executed in a multiple website model,” the COO insists. “This is a best practice for our business.”

Despite this advance in its customer interface, this midsize company knows it won’t be able to stand still. It plans further steps, especially in the use of analytics. “The urgency of customer demand for having information in real time is driving much of the value proposition related to the customer experience,” he says; supplying it while understanding what the customer is doing will be an objective going forward.

The Promise of Business Transformation Businesses have a clear choice: to ride the current wave of ongoing digital innovation and new technologies or be swept under by it. The advent of personal computers and local area networks generated dramatic changes, and so did the arrival of the Internet and the World Wide Web. Already social collaboration and mobile devices have changed how customers interact with – and choose – the companies they do business with. Cloud computing, advanced analytics and big data make it possible to manage the flood of data generated by the global economy and make sense of it. The possibilities of wearable computing and the Internet of Things, which connects people to

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Ventana Research: Modernizing Business with Digital Technologies

ever more devices in their homes and workplaces, are just becoming apparent. To use these innovations for competitive advantage, however, requires more than investing in technology. It requires embracing evolving best practices: systematic planning, analysis and updating or replacement of inefficient business processes and working toward an ever deeper understanding of both employees and customers. A reasoned approach and the adoption wherever possible of best practices are necessary to transform yesterday’s business through digital transformation into one that can grow and prosper today and tomorrow.

About Ventana Research Ventana Research is the most authoritative and respected benchmark business technology research and advisory services firm. We provide insight and expert guidance on mainstream and disruptive technologies through a unique set of research-based offerings including benchmark research and technology evaluation assessments, education workshops and our research and advisory services, Ventana On-Demand. Our unparalleled understanding of the role of technology in optimizing business processes and performance and our best practices guidance are rooted in our rigorous research-based benchmarking of people, processes, information and technology across business and IT functions in every industry. This benchmark research plus our market coverage and in-depth knowledge of hundreds of technology providers means we can deliver education and expertise to our clients to increase the value they derive from technology investments while reducing time, cost and risk. Ventana Research provides the most comprehensive analyst and research coverage in the industry; business and IT professionals worldwide are members of our community and benefit from Ventana Research’s insights, as do highly regarded media and association partners around the globe. Our views and analyses are distributed daily through blogs and social media channels including Twitter, Facebook, LinkedIn and Google+. To learn how Ventana Research advances the maturity of organizations’ use of information and technology through benchmark research, education and advisory services, visit www.ventanaresearch.com.

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