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vr_NGCE_Research_01_impetus_for_improving_engagementOracle has a large and diverse set of products and now has most of its business applications operating in the private and public cloud. However, some recent acquisitions have enabled it to focus on cloud-based-products for managing the customer experience. Our next generation customer engagement research has found that customer experience is the top impetus for improving customer engagement as found by almost three quarters (74%) of organizations. Oracle has created a customer experience suite that includes marketing, commerce, service, sales, CPQ and social cloud. In particular the acquisition of RightNow has become the foundation of Oracle Service Cloud.

Service Cloud is a collection of products built on a common platform : Web Customer Service, Cross Channel Contact Center, Knowledge Management and Policy Automation. Each of these also has several components; for example, Web Customer Service is made up of Web self-service, Social self-service, E-mail support, Live chat, Virtual Assistant, and Smart engagement.  Self-service enables companies to build self-service Web pages which can be accessed on a laptop or a mobile device and can have embedded access to live help (a chat session) if customers need it. Virtual Assistant goes one step further and uses a rules-based engine to initiate a chat session based on the customer’s profile and data entered into the website, in order to provide more contextual responses. It can also be set up to automatically send a link to a document or send out a survey. All three cases make engagement more proactive and potentially more relevant to the customer.

Social self-service supports Facebook-like capabilities that enable companies to collaborate with customers, share information, or create and operate a closed social forum to, for example, gain input for product improvement initiatives. Live chat and Oracle RightNow Cobrowse Cloud Service provides extensions to Virtual Assistant and allows the agent and the customer to browse Web pages together. E-mail support provides standard email management capabilities but is linked with Virtual Assistant to provide more personalized responses; it also includes escalations and workflows to ensure that any required actions are carried out. Smart engagement pulls many of these capabilities together so companies can build guides that walk users through resolving issues, modifying the steps in real time as data is entered.

Oracle has built most of these capabilities on the original RightNow products. According to Oracle, customers can choose only those they need, which means customers and prospects have to understand exactly their business needs and carefully evaluate which products meet vr_NGCE_Research_09_plans_for_customer_engagement_systemsthose needs but there are so many products making it hard to find what you are looking for and understand all the capabilities. And Customer Service is only one-quarter of the customer experience portfolio. Cross Channel Contact Center is not a contact center in the usual sense. Its focus is systems to manage the operations of a contact center, as opposed to managing communications. Cross-Channel Contact Center does include integration capabilities to these technologies; it can, for instance, collect records of interactions that can be used in subsequent analysis and processes. It consists of nine components: Case Management, Guided Resolution, Social Engagement, Customer Engagement, Analytics, Telephony Control, Unified Agent Desktop and Mobile Desktop. Case Management is not for managing service cases but provides intelligent management of interaction queues; for example, it uses rules to route interactions to the agent mostly likely to meet a customer’s expectations. Guided Resolution enables development of scripts and prompts to guide agents through the process of resolving issues. Social Engagement allows companies to monitor social media activities and proactively reach out to help customers find information or resolve issues. Customer Engagement is what many people think of as customer feedback management; it uses rules to solicit customer feedback. Analytics provides canned reports and analysis, and capabilities that allow users to build their own to gain insights from a variety of customer data including across channels of interactions. Telephony Control provides integration with on-premises or cloud-based telephony management systems so that agents can manage calls from their desktop. Unified Desktop has development and integration tools so that companies can build a unified desktop that enables agents to access systems from a single desktop. Finally Mobile Desktop untethers the desktop from a laptop and allows any authorized user to access contact center systems from their smart devices. Mobile was one of the top areas planned for improving customer engagement (41%) as is analytics (38%) that can operate across channels.

Knowledge Management basically supports the end-to-end process of managing creation, distribution and access of content so the same content can be used by all the other systems, and Policy Management basically supports the end-to-end process of managing a company’s policies.

vr_NGCE_Research_08_systems_to_improve_customer_engagementThe Oracle CX portfolio consists of many products that support a very wide range of capabilities. It is true that customer experience management is not simple and requires multiple capabilities. My benchmark research into next-generation customer engagement shows that to improve customer engagement companies have invested and today use a variety of systems; chief among them are CRM (48%), performance management (44%), business process management (43%) and Web-based self-service (39%). The same research also shows more companies looking for cloud-based systems (29%) and mobile systems (63%). My concerns about the Oracle portfolio is that it might be too broad and too complex for any but large organizations to understand; smaller companies with fewer resources might get lost trying work out exactly what they need. This is most likely a consequence of Oracle having to bring together various products from acquisitions. I suspect the same is also true in the naming of some of the products. For example, Web Customer Service doesn’t adequately reflect the capabilities it supports and Cross Channel Contact Center isn’t what many companies think of as a contact center. Companies that make the effort to work through these concerns will find many capabilities that are required to support what I call the omni-customer experience in which customers find it easy to engage with the company and receive personalized, contextual and consistent responses no matter what channel they use or who they interact with. Oracle has a robust portfolio of applications and technology for customer experience, just might take you a little longer to assess the portfolio and approaches.

Regards,

Richard J. Snow

VP & Research Director

vr_bti_br_importance_of_cloud_computingMuch has been written about how cloud computing changes the way businesses source their software and services. For software companies, instead of being installed inside the company, software like business applications run on a computer installed at an external site. If the external site is not shared with any other business, this is called a private cloud; if it is owned and operated by a third party and supports more than one business, it is called a public cloud. In the case of public clouds, users access the applications via the Internet, and increasing they can do this while out of the office, using laptops or mobile devices like smartphones and tablets. The main advantages of this model are that companies don’t need to invest in hardware or support staff to install and maintain hardware or software like these applications, the vendor handles system updates and users can work anywhere (including on the move) by logging in through a Web browser or an application designed specifically for mobile technology. Our research confirms that the overall importance is overall important in more than half (57%) of organizations.

With cloud computing and a shift to pay for what you use approach, it is not surprising that the billing model changes. Companies no longer pay an upfront license fee, followed typically by annual maintenance and support fees but pay on some type of usage basis. These can include a regular “license to use” fee plus charges based on the number of users, the amount of use, the volume of transactions and other factors depending on the supplier’s model. Such a model also changes the relationship between the supplier and the company into a subscription billing process. The parties typically agree on a contract for a fixed period of time and in many cases with an auto-renewing basis. The cloud vendor’s aim is to optimize usage (and the fees accruing from it) and if not auto-renewed, persuade the customer to renew the contracts and perhaps extend it by adding additional services; for its part the customer company wants support and maintenance taken off its hands during the life of the contract. This is complicated when customers want to use more support channels, such as self-service and mobile apps, and the supplier has to not just support them but continue to develop and build for evolving technology.

In any case the cloud model creates billing issues for the vendor that must be managed properly within commerce processes. For cloud vendors billing becomes more complex than in the old on-premises model. It now is based on recurring revenue, calculated by usage over a determined period but billed in intervals. The vendor has to produce invoices that include both regular periodic and event-driven usage charges; for the latter companies have to collect usage data from multiple devices. They also must include charges for packages of services (such as fixed-line telephones, mobile phone and data access and television). Charges may vary depending on events (more or less users), and the billing system must recognize discount periods, premium rates if usage goes beyond agreed levels and other factors. Invoices and payments likely will have to be enabled through online channels, and account management has to recognize the current state of the contract – for example, recognizing free offers at the beginning of the contract and special offers later to entice the user company to extend the contract.

For the cloud vendor, customer service also changes. It becomes a continuous, proactive process that has to blend with marketing, sales and commerce processes to achieve contract extensions and up-sales; because of this business units that have tended to work separately and keep their data in silos need to cooperate more. Customer service must be provided through more channels, and responses must be consistent regardless of channel. Customer engagement should be personalized and  take into the current state of the relationship; for example, at the start of a contract there will more emphasis on advising on how to set up the system, whereas during the life of the contract, the vendor should try to up-sell as well as resolve issues. To meet users’ growing expectations, vendors are likely to have to support a wider variety of self-service such as capabilities to self-administer the software, and access to support services and invoices via the Internet and mobile devices. All-in-all these new recurring revenue models offer the opportunity to extended the active customer relationship and increase customer value, but they also generate new invoicing and customer relationship challenges.

Along with its advantages the cloud model also creates challenges for businesses that use it. There are technical issues such as security, scalability, performance and integrating cloud-based data with on-premises data to, for example, create a complete view of the user company’s customers. There are also relationship issues such as expected levels of support, extending the contract or, in the worst case, terminating the contract and moving to another supplier.

vr_bti_br_top_benefits_of_cloud_computingThe cloud model is enabling more businesses to adopt such potentially lucrative revenue models. Consumers already subscribe to video rental services and pay for what they download. Photographs can be uploaded to the cloud, processed and shared online, and charged for by volume. Hardware can be rented in the cloud and paid for by usage, size and services. Looking ahead, purchasing a car might become obsolete as more people choose to lease cars or subscribe to a service that allows them to rent a car on demand and pay by miles driven and/or days hired. With a broadening set of devices and technology on the Internet from wearable computing to transportation vehicles that is classified in the new term called The Internet of Things. This will  open up further opportunities as more devices become connected through cloud computing and companies offer to provide services through them or by connecting with them. Our research finds that cloud computing delivers a wide array of benefits from lowered costs (40%) to improved efficiency of business processes (39%) and within specific line of business areas and processes even more specific benefits as the adoption and utility of it becomes a standard method for organizations.

Recurring revenue is a rapidly developing market, and although issues are emerging, so are solutions. Ventana Research is seeking to understand current and emerging practices for billing and customer engagement for these business models and the changes such models are generating. If you already offer such services or are planning to do so in the next couple of years, please visit our benchmark research on recurring revenue. We will share the results to help guide you to business success in this business application and process category.

Regards,

Richard J. Snow

VP & Research Director

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