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Hype & High Expectations For Cloud Computing, Part 1

Chris Mark

Cloud computingCloud computing is a much hyped but often misunderstood technology that is gaining traction in different industries around the world. Businesses are integrating the cloud into countless systems, from HR to finance. Full adoption and acceptance of cloud computing, however, are still far away.

A recent global survey by Knowledge@Wharton and SAP’s Performance Benchmarking team reveals that while the hype and excitement surrounding cloud computing is reaching a fever pitch, many businesses are still expressing concerns over cloud security and IT integration issues. The survey also shows that while many people agree that the cloud is revolutionizing business, they still do not fully understand how it works.

How will these tensions surrounding the cloud be resolved? How will the cloud transform businesses in the future? What kinds of benefits will the cloud bring, and is it worthy of the current hype? Knowledge@Wharton discussed those questions and the survey results with David Spencer, vice president at SAP, and Don Huesman, managing director at the Wharton Innovation Group.

An edited transcript of the conversation appears below.

Knowledge@Wharton: Knowledge@Wharton and SAP’s Performance Benchmarking team just conducted a survey about the business value of cloud computing. The survey found that 85% of respondents believe that cloud computing will transform business. Could you speak to us about how cloud computing can make a company more competitive by leading to measurable efficiencies and improving business processes?

David Spencer: There are three areas specifically where the cloud can help our customers be more competitive. One: The Cloud gives individuals better access to areas of their business that the traditional business model previously didn’t give them access to. Two: The speed at which you can deploy a solution gives cloud users an opportunity to realize revenue or benefits much more quickly. Three: The cloud is delivered in a way that makes the total cost of ownership much better. Also, in my opinion, the user interface is more flexible, and it is much easier to deploy.

Knowledge@Wharton: Could you offer any examples of companies where you see this happening?

Spencer: I’ll give you an example of a customer that just recently deployed our Customer OnDemand solution and did it in two weeks. The customer came back to us and said, ‘If we had done this using a traditional model, it would have taken us six months to a year. You’ve done this in two weeks!’ The deployment was completed faster than any other traditional model that was out there. As for the cost — because it’s a variable cost versus a fixed cost, they were able to budget the cost over multiple years instead of taking all the costs upfront.

Knowledge@Wharton: Don, any comments?

Don Huesman: From the Wharton side, I can tell you that the cloud has provided an opportunity for entrepreneurial-minded students with new ventures to establish fairly sophisticated capabilities quite quickly and on a relatively low start-up budget. The cloud allows them to quickly enter a marketplace or put together a platform for delivering a new service at speeds that were not possible before the existence of cloud services. The cloud has certainly provided agility for these entrepreneurs. It creates a more level playing field, and thereby generates more competition.

For example, ElectNext is an enterprise that was established to solve the problem in this country of having an essentially broken political system. By using the cloud, the organizers could efficiently respond to the level of site usage and the level of infrastructure that they needed at any one time. They added on new servers when they found that service was slowing as a result of inadequate resources. In the past, this wasn’t possible. You might have needed to make a guesstimate about possible incoming site traffic and acquired hardware and talented software people to handle this. Now you can respond almost in real time to changes in site demand.

Knowledge@Wharton: Back to you, Dave. Some 65% of survey respondents said that cloud computing would amplify other technology megatrends. Could you tell us which megatrends will be amplified, and how this might happen?

Spencer: Yes. Let’s talk about mobile, social media and big data. We’re seeing more data coming into companies. For example, people are constantly talking about company interactions and opinions on Twitter, Facebook and other sites. Now companies have a massive amount of data that need to be analyzed. One implication that I’m seeing is that companies have to take a more holistic view of their branding. They have unprecedented access to their customers via social media, and individual customers can heavily influence other customers. Now companies can individually market themselves based upon market trends that are going on.

I’ll give you an example of where I’m going with this. Recently, the NFL decided to use SAP’s cloud solutions to run their Fantasy Football service. That’s accessing four million users. The NFL’s IT division may not have had the infrastructure designed to support that before, but because of cloud computing, big data and social trends, they now have an opportunity to market individually to people.

Knowledge@Wharton: Don, do any examples of megatrends come to your mind?

Huesman: One megatrend that is central to cloud computing has been referred to in the press as the consumerization of IT. Before I go further, I would like to note that cloud services have been around a long time. They are a 20th century innovation. Gartner has just indicated that we’re currently at the top of the “hype cycle” for the concept of cloud computing. I think it’s related to the consumerization forces. So, Drop Box and other cloud services for e-mail have enabled both individuals and businesses to take control of their own IT infrastructure needs. I think this force of consumerization has been a real driver in why cloud computing is so interesting now.

Spencer: Adding onto that, the cloud was originally designed for small companies. It all started with non-strategic applications for smaller companies. But over the last couple of years, we have seen larger companies start to see the model and understand how it fits into their business. Now what you’re seeing is even larger companies running their entire HR systems in the cloud. Larger companies are, without a doubt, adopting cloud solutions more than ever.

Knowledge@Wharton: Related to your comment, our survey found that 66% of respondents said that cloud computing is helping their companies create new, strategic options. HR is one of those options. Are there any other strategic options that cloud computing opens up for companies? What value does that create for the users?

Spencer: HR and sales automation are the two that have gotten a lot of attention. But I’ll go back to what Don said, too — it’s also the commercialization piece of this puzzle. Companies are now tailoring marketing directly to customers, who influence other customers.

Knowledge@Wharton: Don, what do you think about the strategic options?

Huesman: From the point of view of students and start-ups, the consumerization of IT is an important component. The cloud provides application software that can be used on hand-held devices — such as iPads and Android — and this allows a mix of vendors to provide very specific types of application software through an app store. I see this as an opportunity to change the market for traditional enterprise services by broadening the vendor base and increasing competition. Also, I should point out that in an app store environment, and as a part of the consumerization of IT, there will be downward pressure on pricing.

This is part one of a three-part series. Stay tuned for part two.

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Chris Mark

About Chris Mark

Chris Mark is the Executive Director, Design & User Experience at SAP. His specialties include business strategy, program management, management consulting, go-to-market strategy and strategic planning.

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awareness , News

Innovation Without Boundaries: Why The Cloud Matters

Michael Haws

Is it possible to innovate without boundaries?

Of course – if you are using the cloud. An actual cloud doesn’t have any boundaries. It’s fluid. But more important, it can provide the much-needed precipitation that brings nature to life. So it is with cloud technology – but it’s your ideas that can grow and transform your business.USA --- Clouds, Heaven --- Image by © Ocean/Corbis

Running your business in the cloud is no longer just a consideration during a typical use-case exercise. Business executives are now faced with making decisions on solutions that go beyond previous limitations with cloud computing. Selecting the latest tools to address a business process gap is now less about features and more about functionality.

It doesn’t matter whether your organization is experienced with cloud solutions or new to the concept. Cloud technology is quickly becoming a core part of addressing the needs of a growing business.

5 considerations when planning your journey to the cloud

How can your organization define its successful path to the cloud? Here are five things you should consider when investigating whether a move to the cloud is right for you.

1. Understanding the cloud is great, but putting it into action is another thing.

For most CIOs, putting a cloud strategy on paper is new territory. Cloud computing is taking on new realms: Pure managed services to software-as-a-service (SaaS). Just as legacy computing had different flavors, so does cloud technology.

2. There is more than one way to innovate in the cloud.

Alignment with an open cloud reference architecture can help your CIO deliver on the promises of the cloud while using a stair-step approach to cloud adoption – from on-premise to hybrid to full cloud computing. Some companies find their own path by constantly reevaluating their needs and shifting their focus when necessary – making the move from running a data center to delivering real value to stakeholders, for example.

3. The cloud can help accelerate processes and lower cost.

By recognizing unprecedented growth, your organization can embark on a path to significant transformation that powers greater agility and competitiveness. Choose a solution set that best meets your needs, and implement and support it moving forward. By leveraging the cloud to support the chosen solution, ongoing maintenance, training, and system issues becomes the cloud provider’s responsibility. And for you, this offers the freedom to focus on the core business.

4. You can lock down your infrastructure and ensure more efficient processes.

Do you use a traditional reporting engine against a large relational database to generate a sequential batched report to close your books at quarter’s end? If so, you’re not alone. Sure, a new solution with new technology may be an obvious improvement. But how valuable to your board will you become when you reduce the financial closing process by 1–3 days? That’s the beauty of the cloud: You can accelerate the deployment of your chosen solution and realize ROI quickly – even before the next full reporting period.

5. The cloud opens the door to new opportunity in a secure environment.

For many companies, moving to the cloud may seem impossible due to the time and effort needed to train workers and hire resources with the right skill sets. Plus, if you are a startup in a rural location, it may not be as easy to attract the right talent as it is for your Silicon Valley counterparts. The cloud allows your business to secure your infrastructure as well as recruit and onboard those hard-to-find resources by applying a managed services contract to run your cloud model

The cloud means many things to different people. What’s your path?

With SAP HANA Enterprise Cloud service, you can navigate the best path to building, running, and operating your own cloud when running critical business processes. Find out how SAP HANA Enterprise Cloud can deliver the speed and resources necessary to quickly validate and realize solid ROI.

Check out the video below or visit us at www.sap.com/services-support/svc/in-memory-computing/hana-consulting/enterprise-cloud-services/index.html.

Connect with us on Twitter: @SAPServices

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Michael Haws

About Michael Haws

Michael Haws is the Vice President of HANA Enterprise Cloud at SAP. His specialties include Enterprise Resource Planning Software & Services, Onshore, Nearshore, Offshore--Application, Infrastructure and Business Process Outsourcing.

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Consumers And Providers: Two Halves Of The Hybrid Cloud Equation

Marty McCormick

Long gone are the days of CIOs and IT managers freely spending money to move their 02 Jun 2012 --- Young creatives having lunch and conversation. --- Image by © Hero/Corbisexisting systems to the cloud without any real business justification just to be part of the latest hype. As cloud deployments are becoming more prevalent, IT leaders are now tasked with proving the tangible benefits of adopting a cloud strategy from an operational, efficiency, and cost perspective. At the same time, they must balance their end users’ increasing demand for access to more data from an ever-expanding list of public cloud sources.

Lately, public cloud systems have become part of IT landscapes both in the form of multi-tenant systems, such as software-as-a-service (SaaS) offerings and data consumption applications such as Twitter. Along with the integration of applications and data outside of the corporate domain, new architectures have been spawned, requiring real-time and seamless integration points.  As shown in the figure below, these hybrid clouds – loosely defined as the integration of data from systems in both public and private clouds in a unified fashion – are the foundation of this new IT architecture.

hybridCloudImage

Not only has the hybrid cloud changed a company’s approach to deploying new software, but it has also changed the way software is developed and sold from a provider’s perspective.

The provider perspective: Unifying development and operations

Thanks to the hybrid cloud approach, system administrators and developers are sitting side by side in an agile development model known as Development and Operations (DevOps). By increasing collaboration, communication, innovation, and problem resolution, development teams can closely collaborate with system administrators and provide a continuous feedback loop of both sides of the agile methodology.

For example, operations teams can provide feedback on reported software bugs, software support issues, and new feature requests to development teams in real time. Likewise, development teams develop and test new applications with support and maintainability as a key pillar in design.
After seeing the advantages realized by cloud providers that have embraced this approach long ago, other companies that have traditionally separated these two areas are now adopting the DevOps model.

The consumer perspective: Moving to the cloud on its own terms

From the standpoint of the corporate consumer, hybrid cloud deployments bring a number of advantages to an IT organization. Specifically, the hybrid approach allows companies to move some application functionality to the cloud at their own pace.
Many applications naturally lend themselves to public cloud domains given their application and data requirements. For most companies, HR, indirect procurement, travel, and CRM systems are the first to be deployed in a public cloud. This approach eliminates the requirement for building and operating these applications in house while allowing IT areas to take advantage of new features and technologies much faster.

However, there is one challenge consumers need to overcome: The lack of capabilities needed to extend these applications and meet business requirements when the standard offering is often insufficient. Unfortunately, this tempts organizations to create extensive custom applications that replicate information across a variety of systems to meet end user requirements. This development work can offset the cost benefits of the initial cloud application, especially when you consider the upgrades and support required to maintain the application.

What this all means to everyone involved in the hybrid cloud

Given these two perspectives, on-premise software providers are transforming themselves so they can meet the ever-evolving demands of today’s information consumer. In particular, they are preparing for these unique challenges facing customers and creating a smooth journey to a hybrid cloud.

Take SAP, for example. By adopting a DevOps model to break down a huge internal barrier and allowing tighter collaboration, the company has delivered a simpler approach to hybrid cloud deployments through the SAP HANA Cloud Platform for extending applications and SAP HANA Enterprise Cloud for hosting solutions.

Find out how these two innovations can help you implement a robust and secure hybrid cloud solution:
SAP HANA Cloud Platform
SAP HANA Enterprise Cloud

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Marty McCormick

About Marty McCormick

Marty McCormick is the Lead Technical Architect, Managed Cloud Delivery, at SAP. He is experienced in a wide range of SAP solutions, including SAP Netweaver SAP Portal, SAP CRM, SAP SRM, SAP MDM, SAP BI, and SAP ERP.

Live Businesses Deliver a Personal Customer Experience Without Losing Trust

Lori Mitchell-Keller, Brian Walker, Johann Wrede, Polly Traylor, and Stephanie Overby

Trust is the foundation of customer relationships. People who don’t trust your business are not likely to become or remain customers.

The trust relationship has taken some big hits lately. Beloved brands like Chipotle and Toyota have seen customer trust ebb due to public perception of their roles in safety issues. Consumers continue to experience occasional data breaches from large brands.

Yet these traditional threats have short half-lives. The latest threat could last forever.

Most customers claim they want personalization across all the channels in which they interact with companies. Such personalization should create long-term loyalty by creating a new level of intimacy in the relationship.

sap_Q216_digital_double_feature3_images2But that intimacy comes at a high price. For personalization to work, brands need to gather unprecedented amounts of personal information about customers and continue to do so over the course of the relationship. Customers are already wary: 80% of consumers have updated their privacy settings recently, according to an article in VentureBeat.

Companies must get personalization right. If they do, customers are more likely to purchase again and less likely to switch to a competitor. Personalization is also an important step toward the holy grail of digital transformation: becoming a Live Business, capable of meeting customers with relevant and customized offers, products, and services in real time or in the moments of customers’ choosing.

When done wrong, personalization can cause customers to feel that they’ve been deceived and that their privacy has been violated. It can also turn into an uncomfortable headline. When Target used its database of customer purchases to send coupons for diapers to the home of an expectant teen before her father knew about the pregnancy, its action backfired. The incident became the centerpiece of a New York Times story on Target’s consumer intelligence gathering practices and privacy.

Straddling the Line of Trust

Customers can’t define the line between helpful and creepy, but they know it when they see it.

Research conducted by RichRelevance in 2015 made something abundantly clear: what marketers think is cool may be seen as creepy by consumers. For example, facial-recognition technology that identifies age and gender to target advertisements on digital screens is considered creepy by 73% of people surveyed. Yet consumers were happy about scanning a product on their mobile device to see product reviews and recommendations for other items they might like, the survey revealed. Here’s what else resonates as creepy or cool when it comes to digital engagement with consumers, courtesy of RichRelevance and Edelman Berland (now called Edelman).

Creepy

  • Shoppers are put off when salespeople greet them by name because of mobile phone signals or know their spending habits because of facial-recognition software.
  • Dynamic pricing, such as a digital display showing a lower price “just for you,” also puts shoppers off.
  • When brands collect data on consumers without their knowledge, 83% of people consider it an invasion of privacy, according to RichRelevance’s research, and 65% feel the same way about ads that follow them from Web site to Web site (retargeting).

Cool

  • Shoppers like mobile apps with interactive maps that efficiently guide them to products in the store.
  • They also like when their in-store location triggers a coupon or other promotion for a product nearby.
  • When a Web site reminds the consumer of past purchases, a majority of shoppers like it.

There are no hard-and-fast rules about which personalization tactics are creepy and which are cool, but trust is particularly threatened in face-to-face interactions. Nobody minds much if Amazon sends product recommendations through a computer, but when salespeople approach customers like a long-lost friend based on information collected without the customer’s knowledge or permission, the violation of trust feels much more personal and emotional. The stage is set for an angry, embarrassed customer to walk out  the door, forever.

sap_Q216_digital_double_feature3_images3It doesn’t help that the limits of trust shift constantly as social media tempts us to reveal more and more about ourselves and as companies’ data collection techniques continue to improve. It’s easy to cross the line from helpful to creepy or annoying (see Straddling the Line of Trust).

Online, customers are similarly choosy about personalization. For example, when online shoppers are simply looking at a product category, ads that matched their prior Web-browsing interests are ineffective, an MIT study reports. Yet after consumers have visited a review site to seek out information and are closer to a purchase, personalized content is more effective than generic ads.

Personalization Requires a Live Business

Yet the limits of trust are definitely shifting toward more personalization, not less. Customers already enjoy frictionless personalized experiences with digital-native companies like Uber, and they are applying those heightened expectations to all companies. For example, 91% of customers want to pick up where they left off when they switch between channels, according to Aspect research. And personalization is helpful when you receive recommendations for products that you would like based on previous in-store or online purchases.

sap_Q216_digital_double_feature3_images-0004Customers also want their interactions to be live—or in the moment they choose. Fulfilling that need means that companies must become Live Businesses, capable of creating a technological infrastructure that allows real-time interactions and that allows the entire organization—its structure, people, and processes—to respond to customers in all the moments that matter.

Coordinating across channels and meeting customers in the right moments with personalized interactions will become critical as the digital economy matures and customer expectations rise. For instance, when customers air complaints about a brand on social media, 72% expect a response within an hour, according to consulting firm Bain & Company. Meanwhile, an Accenture survey found that nearly 60% of consumers want real-time promotions; 48% like online reminders to order items that they might have run out of; and 51% like the idea of a one-click checkout, where they can skip payment method or shipping forms because the retailer has saved their preferences. Those types of services build trust, showing that companies care enough to understand their customers and send offers or information that save them time, money, or both.

So while trust is difficult to earn, once you’ve earned it and figured out how to maintain it, you can have customers for life—as long as you respect the shifting boundaries.

“Do customers think the company is truly acting with their best interests at heart, or is it just trying to feed the quarterly earnings beast?” asks Donna Peeples, a customer experience expert and the former chief customer experience officer at AIG. “Customer data should be accurate and timely, the company should be transparent about how the data is being used, and it should give customers control over data collection.”

sap_Q216_digital_double_feature3_images-0005How to Earn Trust for a Live Business

Despite spending US$600 billion on online purchases, U.S. consumers are concerned with transaction privacy, the 2015 Consumer Trust Survey from CA Security Council reveals. These concerns will become acute as Live Businesses make personalization across channels a reality.

Here are some ways to improve trust while moving forward with omnichannel personalization.

  • Determine the value of trust. Customers want to know what value they are getting in exchange for their data. An Accenture study found that the majority of consumers in the United States and the United Kingdom are willing to have trusted retailers use some of their personal data in order to present personalized and targeted products, services, recommendations, and offers.
    “If customers get substantial discounts or offers that are appealing to them, they are often more than willing to make that trade-off,” says Tom Davenport, author of Big Data at Work: Dispelling the Myths, Uncovering the Opportunities. “But a lot of companies are cheap. They use the information but don’t give anything back. They make offers that aren’t particularly relevant or useful. They don’t give discounts for loyalty. They’re just trying to sell more.”
  • Let customers make the first move. Customers who voluntarily give up data are more likely to trust personalization across the channels where they do business. Mobile apps are a great way to invite customers to share more data in a more intimate relationship that they control. By entering the data they choose into the app, customers won’t be annoyed by personalization that’s built around it.
    For example, a leading luxury retailer’s sales associates may offer customers their favorite beverages based on information they entered into the app about their interests and preferences.
  • Simplify data collection and usage policies. Slapping a dense data- use policy written in legalese on the corporate website does little to earn customers’ trust. Instead, companies should think about the customer data transaction, such as what information the customer is giving them, how they’re using it, and what the result will be, and describe it as simply as possible.
    “Try to describe it in words so simple that your grandmother can understand it. And then ask your grandmother if it’s reasonable,” suggests Elea McDonnell Feit, assistant professor of marketing at Drexel University’s LeBow College of Business. “If your grandmother can’t understand what’s happening, you’ve got a problem.”
    The use of data should be totally transparent in the interaction itself, adds Feit. “When a company uses data to customize a service or offering to a customer, the customer should be able to figure out where the company got the data and immediately see how the company is providing added value to the customers by using the data,” Feit says.
  • Create trust through education. Yes, bombarding customers with generic offers and pushing those offers across the different Web sites they visit may boost profits over the short term, but customers will eventually become weary and mistrustful. To create trust that lasts and that supports personalization, educate the customers.

Procter & Gamble’s (P&G’s) Mean Stinks campaign for Secret deodorant encourages girl-to-girl anti-bullying posts on Twitter, Facebook, and Instagram. The pages let participants send apologies to those they have bullied; view videos; and share tips, tools, and challenges with their peers.

P&G has said that participation in Mean Stinks has helped drive market share increases for the core Secret brand as well as the specific line of deodorant promoted by the effort. Offering education without pushing products or services creates a sense that companies are putting customers’ interests before their own, which is one of the bedrock elements of trust. Opting in to personalization seems less risky to customers if they perceive that companies have built up a reserve of value and trust.

“Companies that do personalization well demonstrate that they care, respect customers’ time, know and understand their customers and their needs and interests,” says Peeples. “It also reinforces that interactions are not merely transactions but opportunities to build a long-term relationship with that customer.”

Laying the Foundation for Live, Personalized Omnichannel Processes

sap_Q216_digital_double_feature3_images-0006Creating a personalized omnichannel strategy that balances trust and business goals starts with knowing the customer. This can happen only when multiple aspects of your business are coordinated in a live fashion. But marketers today struggle to collect the kind of data that could drive more meaningful connections with customers. In an Infogroup survey of more than 500 marketers, only 21% said they are “very confident in the accuracy and completeness of their customer profiles.” A little over half of respondents said they aren’t collecting enough data overall.

Collecting enough of the right types of data requires more holistic data-collection techniques:

  • Take advantage of the lower costs for processing and storing terabytes of data, and develop a data strategy that combines and crunches all the customer data points needed to drive relevant interactions. This includes transactional, mobile, sensor, and  Web data.
  • Social media analytics is also a central tactic. Social profiles and activity are rich sources of data about behavior and character, merging what people buy or look for with their interests, for instance. Such data can feed predictive analytics and personalization campaigns.
  • Experiment with commercial tools that can filter and mine the data of customers and prospects in real time. This is a significant step beyond basic demographic data collections of the past.

sap_Q216_digital_double_feature3_images-0007Once the necessary data is available, companies need the technology, processes, and people to make sensible use of it in an omnichannel personalization strategy. Only when a company is organized as a Live Business can that happen. Here’s how your company can move toward being a Live Business:
Be live across channels. Having a consistent customer journey map across channels is core to omnichannel personalization. It requires integration across multiple systems and organizational silos to enable core capabilities, such as inventory visibility and purchase/pickup/return across channels. This integration also constitutes a major chunk of the transition to becoming a company that can act in the moments that matter most to customers. If all channels can sync in real time, customers can get what they want in the moment they want it.

Free the data scientists. Marketing rarely has full control over the omnichannel experience, but it is the undisputed leader in understanding customer behavior. While data science is part of that understanding, it has traditionally played a background role. Marketers need to bring the data scientists into efforts to sort through the different options for digitizing the omnichannel experience. The right data scientists understand not only how to use the tools but also how to apply the data to make accurate decisions and follow customers from channel to channel with personalized offers.

Walgreens’ Technology Approach to Personalization

Walgreens is a leader in building the kind of technology base that can enable real-time, omnichannel personalization. Its digital transformation is 16 years in the making, according to Jason Fei, senior director of architecture for digital engineering at Walgreens. At the heart of its infrastructure is a Big Data engine that feeds many customer interaction and omnichannel processes, including customer segmentation. The company adds third-party systems in areas such as predictive analytics and marketing software. Walgreens has a cloud-first strategy for all new applications, such as its image-processing and print-ordering applications. Other elements of the drugstore chain’s technology platform include:

  • Application programming interface (API)-driven architecture. Walgreens’ APIs enable more than 50 partners to connect with its apps and systems to drive customer-facing processes, including integrations with consumer wearables to drive reward points for healthy habits, as well as content partnerships with companies such as WebMD. “With APIs we can be an extensible business, allowing other companies to connect to us easily and help in the digital enablement of our physical stores,” Fei says.
  • Responsive Web sites. The company’s Web site is built using responsive and adaptive design practices so that the site automatically adapts to the consumer’s device, whether that is a mobile phone, tablet, or desktop computer. “We have a single code base that runs anywhere and delivers a consistent, optimized experience to all of our customers,” Fei says.

Making the Most of the Technology Base

This technology foundation has allowed Walgreens to push forward in personalization. For example, according to Fei the company uses sophisticated segmentation and personalization engines to drive outbound e-mail and text campaigns to customers based on their purchase history and profile. “We don’t blast out messages to customers; we use our personalization recommendations to be relevant,” says Fei.

The next phase of this strategy is to develop live inbound personalization tactics, such as recognizing customers when they come back to the Web site and tailoring their experience accordingly. These highly automated, self-learning systems improve over time, becoming more relevant at the moment a customer logs back in.

“When you search for a product, the Web site will take a good guess of what you might actually want. If you always print greeting cards at the same time of year, for example, the system would automatically deliver content around that,” Fei explains. “Everyone comes to Walgreens with a mission, so we can be very targeted with our communications.”

Walgreens’ mobile app combines real-time personalization with convenience. You can scan a pill bottle to refill a prescription, access coupons, send photos from your phone to print in the store, track rewards, and find the exact location of a product on the shelf.

Walgreens also recently deployed a new integrated interactive voice-response system that includes a personalization engine that recognizes the individual, says Troy Mills, vice president of customer care at Walgreens. The system can then predict the most probable reason for the customer’s call and quickly get them to the right individual for further help.

How to Get Started with Live Customer Experiences

sap_Q216_digital_double_feature3_images-0008As Fei can attest, getting Walgreens’ omnichannel and personalization infrastructure to this point has involved a lot of work, with much more to come. For companies just now embarking on this journey, especially midsize and large companies, getting started will mean overhauling an outdated and ineffective technology infrastructure where duplicate systems and processes for managing customer data, marketing programs, and transactions are common.

A bad internal user experience often transcends into a bad customer-facing experience, says Peeples. “We can’t afford the distractions of the latest app or social ‘shiny penny’ without addressing the root causes of our systems’ issues.”

Live Business Requires Striking the Right Balance

The boundaries of trust are a moving target. Sales tactics that used to be acceptable decades ago, such as the door-to-door salesperson, are unwelcome today to most homeowners. And consumers’ expectations are unpredictable. At the dawn of social media, many people were anxious about their photos unexpectedly showing up online. Now our identities are tagged and our posts and photos distributed and commented on regularly.

But while consumers are getting more comfortable with online technology and its trade-offs, they won’t put up with personalization efforts that make use of their data without their knowledge or permission. That data has value, and customers want to decide for themselves when it’s worth giving it away. Marketers need to strike the right balance between personalization and a healthy respect for the unique needs and concerns of individuals. D!

 

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Lori Mitchell-Keller

About Lori Mitchell-Keller

Lori Mitchell-Keller is the Executive Vice President and Global General Manager Consumer Industries at SAP. She leads the Retail, Wholesale Distribution, Consumer Products, and Life Sciences Industries with a strong focus on helping our customers transform their business and derive value while getting closer to their customers.

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The #1 Reason People Leave A Job Might Surprise You

Meghan M. Biro

Do you know the number-one reason employees leave a job? It isn’t because of their title, salary, or workload. They leave because of their managers.

Surprised? You shouldn’t be. It makes sense, and we have the research to prove it.

Multiple surveys have confirmed a manager can make or break an employee’s experience. A study by employee engagement firm TinyPulse identified various behaviors impact retention, such as micromanagement and a lack of opportunities for development. Gallup found “at least 75 percent of the reasons for voluntary turnover can be influenced by managers.”

Compensation, culture, colleagues, and balance all play a role—but the crux is the person who holds the role of supervisor.

When good intentions lead to bad management

Bad managers aren’t uncommon; most people have survived at least one. But bad managers aren’t bad people; more often than not, they just don’t have the skills they need to be effective or to recognize warning signs. Consider this:

Skilled workers aren’t automatically great managers. Companies often promote internally, rewarding skilled employees with a move to management. Moving some into management can be a solid strategy, but you can’t ignore the corresponding need for professional development. Before you promote an employee, you need to vet them carefully and provide access to appropriate training. Without that, new managers feel like they are expected to “wing it” and to learn as they go. And over time, the bad habits that arise from inadequate training can cause real problems.

Enthusiastic managers can overwork good employees. “If you want something done, ask a busy person,” Benjamin Franklin once said—and it’s true that good employees often work more efficiently, produce more, and take on more than required. Instead of rewarding above-and-beyond contributions, however, some managers push for more by consistently turning to the best people on their team. This can leave top performers feeling taken advantage of and burned out, spurring them to leave for a job that respects their time and dedication.

Positive working relationships must be a priority. People spend much of their waking hours at work. Managers are responsible for helping their teams be productive, and for improving morale and developing each team member’s skills. Employees who are boxed-in or feel unsupported will stop producing at the same rate, and they may leave entirely.

Anyone can handle a bad management situation temporarily, but… A good employee won’t hang around for years. Employees need to feel appreciated, challenged, and supported in the workplace. Good management doesn’t just help the individual, it helps the team, department, and organization succeed.

Treat employees well without sacrificing business goals

Unfortunately, many managers miss the warning signs. And then? It can be too late. According to HR consultant Bill Rehm, managers often fail to think about retention until the moment someone hands in a resignation notice. They’re often so focused on the battle for recruitment that they miss the internal weaknesses. Then they write off the departure as something with an external cause.

To build and nurture strong teams, you need to start with each manager. You can reduce turnover rates and eliminate the number-one reason for talent loss by encouraging sound management techniques. Where do you start? How about by:

Getting to know the person, not just the worker. What someone writes on a resume or does on the job isn’t their full biography. Take time to get to know team members; ask about their motivations, hidden skills, and outside interests. Learn what the company can do to support their professional growth.

Finding the right talent—for management and your team. Good recruiting finds the right employees to fit a company’s corporate culture and leadership. According to Smashfly,* of the2015 Fortune 500 companies, 57 percent share employee stories as part of their strategy to attract great candidates. Use employee advocates and authentic stories to help build teams who will work well together.

Embracing a culture of transparency and engagement. Engage employees in decision-making discussions and give them context for the work they do every day. A deeper level of understanding can be a motivating factor and may present an opportunity for innovation.

Celebrating good work. As often as “the squeaky wheel gets the grease,” a good job deserves attention, too. Plus, celebrating it may offer more benefits than drawing attention to errors. When employees do well—go above and beyond, or take initiative—recognize their work with verbal praise and earned rewards.

Remembering that change is good. Companies need constant innovation and new thinking to gain or keep a competitive edge. Employees who feel stifled or unchallenged won’t contribute to that evolution.

Providing ongoing feedback. Annual performance and engagement reviews are falling by the wayside, replaced by regular surveys and reports. Company leadership should consider continually offering employees both data-driven and personal feedback about their performance.

Companies need strong managers—and strong leaders. Be a strong leader. Invest in your management team. You’ll not only encourage innovation and growth—you’ll keep your employees happy and eliminate one of the key factors that can have them heading for the door.

*Smashfly.com is a TalentCulture client but the views expressed in this post are my own.

For more on how strong leadership leads to happier employees, see No Magic Pill To Boost Leadership And Employee Engagement

 

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