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Monday’s Musings: Auction Sites Such As Deal Umpire May Level The Playing Field Among Daily Deal Sites

Published on July 18, 2011 by R "Ray" Wang

Merchants Must Break Free From Daily Deal Site Hysteria

Following up on the April 4th post about the damage caused by daily deal sites such as Groupon, merchants continued to send feedback about the challenges they face. Those who use daily deal sites express the following:

Peer pressure to participate. Customers and prospects flooded by daily deals try out competitors. Merchants afraid that lack of participation will hurt the business. A large restaurant chain VP noted, “Dammed if you do, dammed if you don’t. We need to raise awareness above the fray, but the prize for winning is a losing business model”
Attraction of a low value, price sensitive customer base. Instead of attracting brand conscious, high value customers, merchants end up with bargain hunters. Over time, merchants have had to raise prices to make up for losses with daily deal sites. A high end spa owner complained, “I’m attracting the wrong customers and aggravating my loyal customer base. Everyone now wants a bargain and we’ve got no more margin to give”
Inability to negotiate favorable terms. A lack of transparency on terms results in higher takes of percentage of revenue. Merchants lack visibility and expertise to secure better terms. CMO of a large hospitality chain stated, “The terms for the deals stink. We need some pricing pressure to move the pendulum back towards the center”.

New Daily Deal Auction Sites Create Win-Wins for Merchants And Daily Deal Sites

Auction sites such as Deal Umpire provide a market between merchants and daily deal sites. These market places, if successful, will deliver two key benefits for merchants such as:

Visibility in deal terms among various daily deal sites. Deal site profiles include key information such as revenue split, payout terms, subscriber reach, subscriber demographics, deal site business model, credit card fees, media coverage, marketing materials, and when a deal can be featured.
Competition for daily deal business. The market place concept brings together multiple deal site programs into once place. With competitive forces in play, merchants can drive pricing pressure on daily deal sites for lower revenue share and more favorable terms.

Merchants using a market place benefit with:

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Monday’s Musings: The Three V’s of Big Data

Published on July 4, 2011 by R "Ray" Wang

The Three V’s Traditionally Define Big Data

Traditionally, big data describes data that’s too large for existing systems to process. Over the past three years, experts and gurus in the space have added additional characteristics to define big data. As big data enters the mainstream language, it’s time to revisit the definition.

Volume. This original characteristic describes the relative size of data to the processing capability. Today a large number may be 10 terabytes. In 12 months 50 terabytes may constitute big data if we follow Moore’s Law. Overcoming the volume issue requires technologies that store vast amounts of data in a scalable fashion and provide distributed approaches to querying or finding that data. Two options exist today: Apache Hadoop based solutions and massively parallel processing databases such as CalPont, EXASOL, GreenPlum, HP Vertica, IBM Netezza, Kognitio, ParAccel, and Teradata Kickfire
Velocity. This characteristic describes the frequency at which data is generated, captured, and shared. The growth in sensor data from devices, and web based click stream analysis now create requirements for greater real-time use cases. The velocity of large data streams power the ability to parse text, detect sentiment, and identify new patterns. Real-time offers in a world of engagement, require fast matching and immediate feedback loops so promotions align with geo location data, customer purchase history, and current sentiment. Key technologies that address velocity include streaming processing and complex event processing. NoSQL databases are used when relational approaches no longer make sense. In addition, the use of in-memory data bases (IMDB), columnar databases, and key value stores help improve retrieval of pre-calculated data.
Variety. A proliferation of data types from social, machine to machine, and mobile sources add new data types to traditional transactional data. Data no longer fits into neat, easy to consume structures. New types include content, geo-spatial, hardware data points, location based, log data, machine data, metrics, mobile, physical data points, process, RFID’s, search, sentiment, streaming data, social, text, and web. The addition of unstructured data such as speech, text, and language increasingly complicate the ability to categorize data. Some technologies that deal with unstructured data include data mining, text analytics, and noisy text analytics.

The Bottom Line: Start With Your Business Objectives

In Stephen Covey’s book, Seven Habits of Highly Effective People, he starts with a saying, “Begin with the End in Mind”. For big data projects, ask the key questions. What patterns will you uncover that will change how you go to market or address fraud? Can you apply sentiment and location to create new customer experiences. What additional insights can help you create new and disruptive busienss models? Big data is just a technology and tool. How you apply this tool to your business models and objectives will determine whether big data is a luxury or a necessity.

Your POV

What business problem will require you to start with Big Data? What are the key outcomes? Where do you expect to move the needle? Add your comments to the blog or send us a comment at R (at) SoftwareInsider (dot) org or R (at) ConstellationRG (dot) com

Resources

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Disclosure

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* Not responsible for any factual errors or omissions. However, happy to correct any errors upon email receipt.

Copyright © 2001 -2011 R Wang and Insider Associates, LLC All rights reserved.
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Monday’s Musings: Real Time Versus Right Time And The Dawn Of Engagement Apps

Published on June 20, 2011 by R "Ray" Wang

Different Flavors Of Real-Time Result In Significant Implications.

Many pundits, research insight folks, bloggers, and hand wavers keep talking about the need for real time in social business, analytics, mobile, and other disruptive technologies. Given the volume of data, bandwidth constraints, and magnitude of business processes to be supported, is the notion of real time even possible? It’s been the holy grail of many technology suppliers to state they are delivering information or reacting in “real-time”.

While researching the issue, I rediscovered a classic post from event processing researcher Dr. Opher Etzion, from IBM Labs Haifa. The central thesis from this 2007 classic post is that real-time is quite valuable in the context of “the damage caused when missing a deadline”. When you look at that from a business value perspective, his approach leads to four types of real-time (see Figure 1):

Soft real-time: there is a sense to react after the deadline, but the utility decreases (maybe fast) and at some point gets to zero – no use to do it at that point, but no damage.

Firm real-time: The utility go immediately to zero when the deadline is missed – no use to do it after the deadline, but no damage.

Hard essential: Missing the deadline – the utility function goes to a constant negative value; there is a constant penalty.

Hard critical: Missing the deadline – the utility function goes immediately to “minus infinity”, means: a catastrophe will happen.

Figure 1. Four Types Of Real-Time And their Implications Of Missing A Deadline

Source: Dr. Opher Etzion

The Shift From Real-Time To Right-Time Prioritizes Events By Business Value

A deeper examination of the four types shows that business value can easily be quantified in the hard essential and hard critical types as these result in penalties and disasters when real-time is not achieved. In the case of firm real-time, the lack of timely response results in a wasted and non-valiant effort.

Consequently, organizations must prioritize business processes for real-time by business value achieved and potentially lost. Essentially, this prioritization results in the notion of right time delivery of information. Moreover, right time increases in value as a concept when gauged against reactiveness versus proaactiveness.

As we break down business processes by interactions, an emerging class of applications move beyond transactions. In fact, these applications must quickly determine right time actions at the point of engagement that follow 4 distinct types (see Figure 2):

Proactive value added anticipation: the heart of engagement applications, anticipation allows for proactive response. Examples include offers, suggestions, actions based on context drivers. Context drivers could include location, presence, time, proximity, relationships, previous purchase behaviour, etc..
Mission critical reactions: where most “real-time” use cases tend to fit, this type addresses deadlines, commitments, and regulations. Examples include response times, regulatory requirements, alerts, threshold triggers, and service level agreements.
Nice things to do: reminders with minimal impact but provide proactive engagement. Examples include status updates, background information suggestions, and non-critical notifications.
Timeless responses: where useless information resides in an abyss. Examples include log reports, short action items, nice to know information from activity streams.

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Monday’s Musings: Using MDM To Build A Complete Customer View In A Social Era

Published on May 9, 2011 by R "Ray" Wang

Customers Have Evolved… Has Your Organization?

Right now customers and prospects probably ignore your organization’s marketing messages because mass marketing campaigns lack relevancy. Right now most customers answer each other’s questions because your customer service and support agents lack the authority or knowledge to resolve issues. Right now prospects ask each other what they think about a company’s product or service because most organization’s sales professionals lack credibility.

Consequently, organizations face immense challenges in influencing prospects and customers as three forces drive the changing dynamics in customer engagement (see Figure 1).

Trust not financial performance is the new social currency. Trust drives influence, engagement, and relationships. People and organizations must earn trust through their actions across their relationships. Trust can be expended to gain influence, create engagement, and foster relationships. Trust can be taken away through lack of credibility, bad behavior, and dishonesty.
Increase in social media adoption moves beyond fad. Social media adoption is a cultural shift not a fad. The growing preference for engagement through social channels drives new relationship models. Social has moved beyond the tipping point. How social evolves and permeate our lives is the question.
Failure of CRM efforts to engage and influence. Traditional CRM focused on management versus engagement. CRM initiatives barely addressed customers and mostly ignored relationships. Projects focused on manager convenience instead of employee empowerment. More importantly, systems supported transactions not relationships.

Figure 1. Three Forces Drive The Changing Dynamics In Customer Engagement

Organizations Must Address Their Data Challenges To Gain A Strategic Advantage

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Monday’s Musings: Putting An End To The Conflict Of Interest Among Some Sourcing Advisors

Published on March 28, 2011 by R "Ray" Wang

Many Services Firms Seek Unfair Advantages With Market Makers

Service providers continue to battle it out in the über competitive market for large annual multi-million dollar contracts. Market makers who serve as sourcing advisors, (i.e. management consultants, analysts, or vendor specialists) often influence the outcome of large sourcing contracts and system integration projects. Consequently, more and more service providers seek to influence sourcing advisors.

Now let’s be honest, influence through consulting engagements around positioning, competitive intelligence, and go-to-market strategy is nothing new. Most firms make it transparent to the buyer who they work with. However, in the past few months, we’ve uncovered several new techniques that cross the line on both objectivity and transparency. These approaches include both formal and informal contractual guarantees across three major areas:

Number of blog posts or written research about a vendor. Sourcing advisors commit to writing certain amounts of research in exchange for a contract with the service provider. In some cases, the research may require editorial approval by the service provider.
Number of invitations to bidders conferences. Sourcing advisors commit to inviting the contracted service provider to a short listed group of candidates. Some contracts even include a tiered scale for greater payouts based on the number of invitations to deals.
Kick backs and referral fees for closed business. Sourcing advisors collect a financial reward for recommending a buyer to a service provider. Fees work similar to referral models with alliance partners.

The Bottom Line: Ask These Five Questions Before You Engage With Your Sourcing Advisor

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Monday’s Musings: The Race For Enterprise Class Consumer Tech

Published on March 7, 2011 by R "Ray" Wang

Start Ups Chase Enterprise Dollars As Freemium Model Plays Out

I’ve been spending time with emerging technology start ups over the past 3 months. The good news – innovation in the valley is alive and well. Most of these ventures start with solving a consumer problem and hope for massive viral success in the freemium model. The bad news – the VC’s hope for quick turnarounds that result in exit strategies to the deep pockets of Google, FaceBook, Microsoft, and Zynga. The sad truth - you and i know most will never make it. When that realization hits, the VC’s hurry and move to the obvious next step – find an enterprise angle.

Consumer Tech Must Meet Five Elements To Earn Enterprise Class Status

To make it in the enterprise requires a mindset change. Business models focus on well… making money! We’ve spent much time coaching clients on how to move from freemium to premium. We also have to explain how an enterprise customer (i.e. CIO, CMO, Line of Business exec) may make a decision. Inevitably, our buy-side clients will ask, “Is this solution fit for the enterprise?” In a post from October about how consumer tech trends will enter the enterprise, we discussed the 5S’ of for enterprise class software:

Safe. Organizations expect these solutions to not only integrate with ease but also, not harm existing systems or jeopardize how users perform daily work and operations.
Secure. More than just role based security mechanisms, these solutions should pass encryption requirements, prevent data intrusion, and protect key intellectual property assets.
Scalable. Solutions should work in a wide range of environments, meet wide ranges of usage demands, and perform well across the globe. Users should be able to grow demand and scale down as well as up. Scaling up should lead to a lower cost per unit.
Sustainable. Consumer technologies must meet requirements for flexibility and adaptability over longer periods of time (e.g. 7 to 10 years). Training programs, knowledge transfer mechanisms, and support communities should be readily accessible.
Simple. Software vendors should employ design thinking to build solutions based on how people want to use mobile, social, analytics, video, and cloud in an enterprise context. Enterprise software should deliver in an easy to roll out and use manner.

There are probably more criteria to add here and I encourage you to add your thoughts to the 5S of enterprise class. Kudos to Christian Pantel for his addition of the 5th S – Simple!

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Monday’s Musings: Reflections On Obama And The False Hope For A Tech Halo

Published on February 21, 2011 by R "Ray" Wang

President Obama’s Visit Reflects The Importance Of Silicon Valley To The US Economy
By now everyone’s seen and re-seen the photo showing the tech-centric dinner at John Doerr’s house in Woodside, CA on February 17th, 2011 (see Figure 1). With a guest list that included most of the “Captains of the Tech Industry” it would have been great to be a fly on the wall that night to hear what was the secret to innovation and how we could improve education. On many levels, the dinner and the publicity surrounding the visit did emphasize:

The President’s desire to rub off the tech halo. For the White House, here was a chance to highlight an area of the economy that has managed to survive the global meltdown by out innovating the competition. President Obama’s State of the Union talked about how a tech led job creation would be a key component of recovery. The valley served as a great backdrop to show where this was already happening.
How lobbying does pay off for the Valley. For tech leaders in the valley, here was a chance to bend the President’s ear on a number of policies and reap the benefits of all the money spent lobbying. In fact, among the 10 guests, MAPlight.org showed $735,000 given to the President’s party among the overall $913,000 contributed to all political candidates. I would expect more official economic delegations and trade missions to come from the renewed focus on tech. Many tech firms pondering the need for strong government affairs teams regained religion.
The state of Steve Jobs’ health. Good news! Steve seemed healthy enough to dine with the President. After all the trash talk in the papers, a picture proved enough to quiet the critics. Yes, that wasn’t a stunt double like Kim Jong Il! In fact, the picture quelled all rumors.

Figure 1. President Obama’s Tech Centric Dinner Photo Op

Credits: White House Press Office. Attendees include: Carol Bartz, President and CEO, Yahoo!; John Chambers, CEO and Chairman, Cisco Systems; Dick Costolo, CEO, Twitter; John Doerr, Partner, Kleiner Perkins Caufield & Byers; Larry Ellison, Co-Founder and CEO, Oracle; Reed Hastings, CEO, NetFlix; John Hennessy, President, Stanford University; Steve Jobs, Chairman and CEO, Apple; Art Levinson, Chairman and former CEO, Genentech; Eric Schmidt, Chairman and CEO, Google; Steve Westly, Managing Partner and Founder, The Westly Group; Mark Zuckerberg, Founder, President, and CEO, Facebook

Success In The Valley Stems From The Hard Work And Investment From…<GASP> Other Countries

One can only imagine the reasons punted around that night on why Silicon Valley is successful in delivering on concept to cash. It’s true – the valley enjoys many of the assets that bring out innovation and helps the US lead with high tech jobs. We have a top notch workforce. We have several great universities. We have a history of entrepreneurship. We have access to funding and capital. Many would think these elements were endemic to Silicon Valley. Unfortunately, that’s not true.

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Monday’s Musings: Thoughts On How Indian Infotech Companies Can Lead Instead Of Follow

Published on February 7, 2011 by R "Ray" Wang

Disruptive Technologies Remain Top Of Mind Among Business Technology Leaders

It’s always a privilege and a pleasure to reach out to clients and prospects around the world. For those tracking my location, I’ve been in London, San Francisco, and Mumbai over the past 9 days. The conversations have ranged from social business and enterprise 2.0 tools while speaking at the Tibco tibbr launch; to CRM and social CRM strategies while keynoting at the Microsoft Dynamics CRM 2011 San Francisco launch event. Despite the range of topics, a few themes keep emerging among buyers:

Can you help me figure out what’s hype and what’s real among the disruptive technologies?
What technologies will support my new business models?
How do I pay for all this “stuff” if I want to go forward?

The good news – pent up demand signals new interest to spend among business technology leaders. In fact, I’ve spoken with at least a dozen companies investing more into <gasp>… ERP! The bad news – technology is moving so fast that many organizations can’t keep up with what’s new. Most organizations can barely keep the lights on. On my way to Mumbai, the conversations among buyers shared similar themes with one exception – the rise of India in global tech.

Conversations On The Way To Nasscom Focus On India And Its Role In The Global Tech Economy

Now, as many of you know, the trip to India takes almost 24 hours from San Francisco. By the tenth hour, you and your fellow passengers have watched every movie you can see, poorly slept, eaten 2 meals, and more than happy to strike an intellectual conversation. For me, trips to India, Brazil, China, and the UAE always provide good data points on disruptive and emerging technology adoption in fast growing economies. This trip proved no differently. Surrounded by techies, from the IT and bio tech world, we dove into heated discussions ranging from India’s place in the global tech economy; to inspiring innovation in Indian companies; to China vs India; to the future of outsourcing.

All in all, these conversations reflected the top of mind items in the tech community and mirrored many of the Nasscom agenda items. Among the NRI’s, a lot of attention discussed the rebalancing of power from the United States to India and China in the tech community. Among us outsiders, we expressed a respect and recognition for how much India has accomplished. In fact, most infotech firms have made a shift from provider to catalyst (see Figure 1). A few market leaders such as Infosys, HCL, TCS, and Wipro remained within striking distance of achieving advisor status in some industries. Western firms such as Accenture, IBM, and Deloitte seek to move from advisor to innovator status.

Figure 1. Software Insider Stages Of Service Firm Maturity

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Monday’s Musings: Q1 2011 State of Social CRM and CRM From An EMEA Point Of View

Published on January 31, 2011 by R "Ray" Wang

Greeting from London! It’s been a great surprise to enjoy the sunny and warm weather (by UK standards) as I readjust my body clock. Thankfully, I’ve had a chance to catch up with a few new and old clients, several analysts, media moguls, and in real life meetups w/ close relationships (i.e. @grahamhill and @buchanla) built over Twitter. Nothing beats in-person conversations and I’m thankful we could connect on the state of disruptive technologies such as Social CRM, CRM, Cloud optimization, gamification, and mobile enterprise. A few trends from some great discussions and debates:

Social CRM (SCRM) adoption picking up in the UK for marketing and support/service. Conversations with Laurence Buchanan, CapGemini’s chief dude on CRM and Social CRM, indicated that clients are interested in SCRM for both an offensive and defensive strategy. Offensive strategies focus on social media monitoring and marketing. Defensive strategies mitigate risk in public relations disasters from support and service incidents. Talking to a few utility and public sector prospects and clients, it became quite apparent that Laurence’s experiences proved out true. A regulated industries CIO confided in me and said, “We’re doing this b/c we don’t want to end up as the top BBC story.” Talks with a retail prospect focused on shifting marketing budgets to digital marketing.
Design thinking a key differentiator in successful SCRM adoption. Over some great Earl Grey and Matcha GreenTea latte’s, rockstar strategist and CRM guru, Graham Hill, discussed some of the key elements of successful implementations. The introduction of services design thinking presents a key factor in success. Success requires balancing the left brain and right brain points of view. Moreover, his experiences from working at Toyota and other quality focused enterprises prove out why it’s better to get the design right the first time. Good design embodies input in organizational culture, business processes, and of course technology. One of the memorable quotes from the day stuck with me – “Consume as little technology as you need”.
The cloud will play a key role in social media monitoring. As media monitoring evolves from a highly paid, skilled craft to a high volume mathematical data crunching exercise, BPO offerings will emerge to address big data crunching. Companies such as Wipro and Capgemini are already building such service lines. Also, these Cloud BPO services such as CapGemini’s Immediate gain traction with clients who want a set of unified CRM and Social CRM services delivered in the cloud. It’s also healthy to note that the EMEA clients have gained confidence in privacy controls and cloud security provisions by EMEA providers.
Salesforce.com and Microsoft Dynamics CRM gaining traction in UK. In 29 conversations over the past 2 quarters, CRM discussions lead with Salesforce.com and Microsoft Dynamics CRM. Salesforce.com dominates the CRM replacement buy-side decisions among large enterprise CIO’s. Meanwhile Microsoft Dynamics CRM leads discussions among net new buyers in small and medium sized businesses, public sector, and divisions of large enterprises with Microsoft centric IT shops.

Your POV.

Are you in EMEA and deploying Social CRM? What’s working? What lessons have you learned? Share your thoughts here or send a private email to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your Social CRM/ Social Business efforts. Here’s how we can assist:

Assessing social business/social CRM readiness
Developing your social business/ social CRM strategy
Vendor selection
Implementation partner selection
Connecting with other pioneers
Sharing best practices
Designing a next gen apps strategy
Providing contract negotiations and software licensing support
Demystifying software licensing

Resources And Related Research:

Reprints

Reprints can be purchased through the Software Insider brand or Constellation Research, Inc. To request official reprints in PDF format, please contact r@softwareinsider.org.

Disclosure

Although we work closely with many mega software vendors, we want you to trust us. For the full disclosure policy, stay tuned for the full client list on the Constellation Research website.

Monday’s Musings: Why I’m Unplugging From Location Based Services Until The Privacy Issue Is Resolved

Published on January 17, 2011 by R "Ray" Wang

Convergence Of Smart Phone Affordability And Broad Network Access Drives Growth In Location Based Services

I’ve been a big fan of location based services (LBS). In fact, many of you have followed my whereabouts on Yelp, Tripit, and other integrated Twitter services. As many of you know, location based services take your geographical position from your mobile device and deliver relevant information services based on your relationship to people, objects, places, etc. In the 2010 Pew Research Pew Research Center’s Internet & American Life Project, surveys showed, 4% of Americans utilized Location Based Services (LBS) (see Figure 1).

Figure 1. Layar’s Augmented Reality location based service (LBS).

Constellation Research, Inc. estimates these services to grow and generate up to $10.7B in revenue by 2013. Among the early adopter set, LBS is on fire. Among the general population, growth will most likely trend with smartphone adoption, which market research firm IDC estimates a 55% growth from 2009 to 2010 (~270 million units). You do the math!

As one of those early adopters, I and many others have enjoyed LBS from a consumer tech point of view to:

Navigate around places. Use turn by turn navigation and traffic maps through services such as Google Navigation and Yahoo! Maps.
Identify events to attend. See where my friends are by date and location to make time to catch up using Loopt, Rummble, and Tripit.
Locate friends near me. Catch up with people near me using Foursquare and Gowalla as a matter of convenience. In some cases, track people by mobile device location.
Reduce traffic fines. Warn and be warned where speed traps, sobriety check points, and cameras through crowdsourcing apps such as Trapster and Phantom Alert
Find places to eat. Follow foodie friends to see where they check in on Yelp.
Receive offers from merchants. Get rewarded for checking in to locations with discounts from merchants. Take advantage of M-commerce (mobile).