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Charting Your Course in 2014: CRM And HR

by Ken Murphy, Editorial Director

January 1, 2014

Ken Murphy of SAPinsider recently chatted with Nucleus Research analyst Rebecca Wettemann about the firm's Top 10 Predictions for 2014.


Ken Murphy: Hi, this is Ken Murphy with SAPinsider, and I’m pleased to be joined by Rebecca Wettemann of Nucleus Research. We spoke with Rebecca a year ago, and chatted about Nucleus Research’s Top 10 Predictions for 2013, among them the anticipated rise of BI adoption, a move toward more accessible analytics, and technology focusing more and more on customer experience. And Rebecca has been gracious enough to join us again to discuss Nucleus Research’s Top 10 Predictions for the upcoming year. Their annual report with those predictions was released last week (Dec. 9, 2013). Rebecca, thanks for joining us.

Rebecca Wettemann: My pleasure Ken.

Ken: Rebecca, before we talk a little bit about what’s in store for 2014, what in your estimation is the biggest prediction that Nucleus got right for 2013?

Rebecca: Well, first Ken thanks for giving me the opportunity to brag a little bit. We are pretty proud of our track record on our predictions and if you look year over year, although we’ve been off on the timeframe on some predictions we tend to bat pretty close to 1.000 on accuracy of our predictions. But I think there are two from last year that are worth pointing out. First, the productivity impact. The negative productivity impact that Windows 8 created for users. I think anybody moving to Windows 8 this year saw that and felt that and certainly that will continue to be an issue as more organizations move to Windows 8. But probably the most visible prediction that we brought up last year was the rise of 3D printing. And we had mentioned last year about the opportunity for good and evil that could come from 3D printing, and I think we’re continuing to see today with conversations about legislation around 3D printing and what really is a weapon, that this is going to continue to be an issue as the technology becomes more advanced and more accessible to more people.

Ken: Sure, that was a big news story throughout the whole year. So I’d like to ask you a little bit about changes in the CRM space as we head into 2014, because one of the Nucleus predictions is a blurring of the lines between business-to-business or business-to-consumer sales strategies. So instead, Nucleus foresees what you’re calling a single business-to-buyer model. Can you just elaborate on what this means, and are vendors such as SAP positioned to deliver this capability to customers?

Rebecca: Sure. Ken, I think we’ve seen a lot of conversations about the customer experience in the past 18-to-24 months where we’re talking about the customer experience as an end consumer. In reality, all buyers are people and so what we’re seeing in the  CRM front is less of a distinction between applications or solutions that are focused on delivering customer experience for business-to-consumer or business-to-business companies. Because all buyers are people, we need to target them in the same way, even though their transaction size may be different and the way they ultimately place their transaction may be different. This leads to two key areas in technology where we see SAP and other vendors looking to innovation. First, Big Data. Being able to do the predictive targeting and understand targeted messages for customers, be they customers buying for their organization or buying for themselves. And that’s where embedded analytics, and SAP HANA certainly comes into play. Just enabling organizations to very rapidly analyze data and have a much better understanding of their customers. The other area is mobile. Enabling consumers to access information on their mobile devices, conduct transactions on their mobile devices, but also enabling those internal salespeople to serve customers more effectively on mobile devices is the key area that we see vendors investing and moving forward. And we’re certainly seeing SAP with a rapid release cycle CRM based applications for mobile continuing to accelerate that trend.

Ken: So in addition to mobility, the report addresses how cloud BI and also mobility are creating a demand for ease of use in reporting and accessibility which puts pressure on vendors to meet the demand with new features and functionality. So is this trend toward more accessible BI leading to more rapid advances in the space, or is it a more level vendor playing field, or a combination of the two?

Rebecca: I think really what it’s creating is probably one of the most challenging balancing acts of 2014 for the BI vendors as they think about how do we harness these in-memory capabilities and the analytics capabilities that are becoming very powerful, but put them in the hands of the business user in a way that’s meaningful, accessible, usable, and ultimately enables them to make better decisions. It’s really about using the intelligence of software to make the analytics not more simplistic, but more simple for the end user. I think at the midterm, what we’re seeing is vendors work a lot more on blueprints, target projects, things like the rapid deployment solutions where customers can learn very quickly how to solve a specific business problem with analytics and then expand that use to a broader use of non-expert analytics consumers.

We’re also seeing closer partnerships with vendors and their customers in this space, where they may be spending more time on-site actually helping customers understand how to best leverage these new and more complex technologies.

Ken: Another prediction in the Nucleus Research report is the growing influence of social collaboration in the HCM space. From predictive analytics and smarter hiring, to performance reviews and compliance based documentation. Can you elaborate on these trends, especially the role of predictive analytics in the HCM space?

Rebecca: I think social and HCM are old news to a certain extent. We’ve seen a lot of merger and acquisition activity in the past couple of years with companies looking to acquire those social performance managements, those social capabilities, to be able to integrate into their overall HCM solutions. What we see when we add the power of analytical processing, of in-memory processing, and the Big Data solutions out there, is the ability to really take predictive analytics to a new level. Faster processing power means I can do things around text analytics for example, that simple wasn’t capable of doing before, it simply wasn’t cost effective before. If you think about the volume of data, about day-to-day work performance being generated by these social performance management and social collaboration applications, we now have a lot more opportunities with the computing power and text analytics capabilities to be much more predictive and proactive in the way we manage employees.

We’re also going to see a much richer record trail. So performance reviews are no longer quarterly, monthly, or even annual. They’re really happening on an ongoing and very interactive basis.

Ken: And, finally, Rebecca. Among the Nucleus predictions that we haven’t touched on, is there a key trend that we should be on the lookout for next year?

Rebecca: Well, Ken, the key trend that we’re focused on and really encouraging vendors to embrace and we’ll be rating them on this moving forward is the idea of moving the concepts of the dark cockpit that were developed by cockpit engineers in the aerospace industry to enterprise software. Software in the race for feature function parity has become far too complex as way too many features  is confusing for the user, requires more training than it should, and ultimately distracts users from what they should actually be doing, which is using software to make intelligent decisions.

The idea of the smarter dark cockpit is really being able to make the software smarter, taking the intelligence of the software to simplify, automate, and focus the user on what they actually need to do to do their jobs. The focus part is a key part of this; when cockpit design engineers were thinking about the dark cockpit, they were thinking about how do we focus the pilot on the most important thing they need to do, which is fly the plane. In the area of enterprise software, it’s the same thing. In the CRM field, it’s how do I focus sales on closing the deal? The dark cockpit concept really takes those principles from aerospace design engineering and says “How do we simplify, automate, and focus users within the application?” It’s a far more challenging development effort for vendors than traditional feature additions, but provides far more powerful, more productive user experience.

Ken: Well, that’s something we’ll certainly be on the lookout for next year. Rebecca, I just want to thank you again for sharing your insights and those of Nucleus Research with us. Thank you for your time.

Rebecca: My pleasure.

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