Monthly Archives: November 2015

SAP Hybris encourages its partners to be bold when it comes to digital transformation.

Last month, SAP Hybris hosted a number of analysts, clients and prospects in Forth Worth Texas for their North American Customer Days event. The major discussion point for the event was the impact digital has had on the relationship with the customer. How does the continued disruption created by the digitization of our indexeconomy impact the manner in which retailers and brands interact with their customers? SAP Hybris emphasized that due to this digital revolution, retailers and brands that employ a “one size fits all” viewpoint is passé. We at Constellation Research couldn’t agree more. On the contrary, retailers and brands in their continued efforts to tailor experiences to the customer of one – lean on the technology and business processes that will permit these contextual experiences for the customer.

There were two points of emphasis at the event that reinforce the evolution of the retail – customer relations:

  • CRM is dead, long live CRM. CRM as we knew it, is most definitely gone. The days of the CRM systems we saw arise in the late 1990s, such as Seibel and Onyx, addressed a very specific need – a linear repository for organizing customer touch points. Originally these systems were created to organize and keep track of a limited number of touch points between a sales force and a prospect or client. This sufficed when most of those interactions were in person, over the phone or via email. A finite number of touch points. Increased digital growth has given rise to an ever growing number of dynamic communication points between customer and brand. This evolution requires the systems being employed to keep pace. Traditional CRM systems and the mind set behind them are dated. Of course the notion of customer relationship management remains important, maybe more so than ever. Maybe not the term “management” since the customer has more influence in the relationship. Retailers are no longer driving the relationship, but working to understand and anticipate customer needs. In this light, the solutions are truly dated. As the number of communications points between customers and brands is ever shifting, growing and constantly evolving the necessary systems are asked to do more and do so faster and more efficiently. Brands and retailers, more than ever, must have systems in place that properly track, store and provide inputs into customer relationships. Legacy CRM systems are dead; the goals of CRM are more than ever vital for brands.
  • Data is the new fuel. Data is the new oil that drives the digital business; those retailers and brands that will strive in this business environment are the ones that turn this oil into fuel. The importance of data is by no means a news bulletin, but it is the importance of transforming this data that remains the challenge. We all know that retailers and brands have an unprecedented access to data. But, as SAP Hybris points out, it is not about extracting the data it is about being able to transform this raw material, in the form of data, into insights. This transformation is multi-faceted. It must be done quickly, efficiently and intelligently. For example, the NHL (the North American professional ice hockey league, National Hockey League) worked with SAP Hybris to determine which data sources to focus on, how to leverage the data sources and what growth plan to adopt with regards to adding new data sources. With a large and various number of data lakes – individual team data, NHL.com assets and even fantasy hockey sites – there was no shortage of information for the NHL to choose from. With SAP Hybris, the NHL took a structured and disciplined approach – always keeping the customer at the center of the efforts. Which data pools were the most applicable to start with, and which could be brought in to build on the insights that were being drawn out? This approach has allowed the NHL to create a more efficient customized customer experience – being more contextually aware of the customer’s needs and possible experience with the NHL.

SAP hybris understands that it’s more than technology that will help your business, on the contrary the technology becomes less important. The need for new business processes, through the usage of the data is what distinguishes the leaders from the laggards. The technology needs to support, not lead these efforts.

At the core the focus continues to be on the customer, but it always has been. The nuance is that the focus is on the contextual customer interaction, which continues to be honed in more and more down to the individual. Retailers and brands need to be more nimble and willing to experiment with new technologies and allow for new applications – all with the changing business processes in mind. As SAP Hybris customer Loblaw stated from main stage – brands and retailers need to own digital, they have to think big, take risks and learn from these efforts. If companies don’t they will be left behind in this ever changing digital economy.

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Software AG – pushing all their chips in for the digital platform

A few weeks ago I spent the majority of my time in Las Vegas with Software AG at their Innovation World summit. Unlike Vegas, what happened at Innovation World isn’t going to stay at Innovation World…okay poor attempt at humor. Software AG should be touting what they spoke about during the 3 days at the Aria Hotel and Casino. The main theme of the event is around the digital platform Software AG is doubling down on. Smart move? Time will tell…but a positive move in light of the digital disruption we are in the midst of and what we all believe will only become greater changes moving forward.

Software AG aggressively pushed their digital platform agenda from day one on main stage as their executives took turns highlighting Software AG’s efforts with creating a digital platform to allow their customers to innovate. Karl-Heinz Streibich, Software AG’s CEO, focused on 7 drivers that is the catalyst for digital disruptions:

  • The shared economy, driven in large part by the Internet.
  • Standardization, think of the smart phones we all carry.
  • Asset lite companies, as digital becomes the main asset companies are shedding traditional assets.
  • Transparency brought by greater connectivity, this will only accelerate with the rise of the IoT (Internet of Things).
  • Fast sprints of innovation, digital platforms allows for rapid innovation.
  • Lower costs, with digitization the costs are reduced.
  • Unbridled creativity, once digitization has touched “everything” creativity will only continue to explode.

Such drivers continue to change the way companies and service providers address the market. Of course the undertone from main stage was that the customers know better what their business needs are, while Software AG knows best how to translate this into bites and bytes. This is the nature of the business world we are currently living in – digital has created an acceleration that is unprecedented. Vendors and solution providers cannot predetermine what problems and business use cases their customers will have next quarter let alone in 6-12 months. The idea of providing the platform – truly a Lego set for customers to then go out and create their own solutions. Karl-Heinz was right in saying – you know your business better than anyone, but we know the digital aspects better than you…let us work together.

There is a caveat to this notion – that while digital has greatly disrupted business, there are some truisms that will remain. The majority of business use cases have some basic aspects and needs that are consistent across industry and company. Under this light it is important that companies such as Software AG lean on their industry teams to accelerate focused business processes that are vertically aligned. Verticals such as retail, finance or manufacturing are already looking at how they can bring their industry insights to accelerate the time to productivity with their solution sets. Can Software AG leverages their vertical teams to start creating some standard building blocks that their N+1 customer in that specific vertical take advantage of?

The challenge for the German software vendor lies in their ability to pivot into verticals, compete with other service providers that have longer histories and track records servicing these verticals. The advantage Software AG brings is they are also not wed to their legacy offerings, which many other vendors are still fighting.

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Filed under Current Events, Digital, IT, Supply Chain