Posts Tagged ‘Research Summary’

Research Summary: Best Practices: Consolidated CRM Deployments Drive Paths to Modernization And Social CRM (SCRM)

Forward And Commentary

As with any maturing product category, CRM applications have evolved over time from point applications to best of breed solutions to end-to-end suites. This report examines some common styles of modernization as CRM emerges from the systems of transaction era to the systems of engagement era and beyond.

A. Introduction

With the average CRM deployment nearing the end of their useful life, over 85 percent of line of business executives and CIOs intend to upgrade their CRM systems in the next 24 months.  Why? Customer expectations and a slew of innovative solutions have changed the delivery of customer centricity. Key factors include the need to adopt disruptive technologies, complete the customer view, and achieve business value.

Constellation’s latest survey of over 200 CRM decision makers highlights a trend to consolidate the CRM core as organizations chart four paths to CRM modernization.  The four paths – stay with status quo, move to shiny new CRM, consolidate and augment, and modernize and surround with best-of-breed – represent pragmatic approaches to achieve customer centricity.

Regardless of approach, Constellation recommends that executives approach CRM modernization with a lens that accounts for including tangibles, intangibles and contingencies in the calculations of business value. Using the Constellation Business Value Framework, organizations can quickly compare the four paths of CRM modernization and determine the most appropriate path.

B. Research FindingsBest Practices Indicate That a Consolidated Core Is the First Step to Modernization

Among 203 respondents, the majority (85.7 percent) intends to make significant efforts to modernize their CRM efforts in the next 24 months (see Figure 1.). The four paths to modernization include:

  1. Stay with status quo (14.3 percent). Organizations may choose to continue business as usual. The catalysts for change include major events such as new business models, merger and acquisition, or regulatory requirements. Status quo includes keeping the system as is. Most organizations in this category have either really good adoption or overbought and barely take advantage of existing capabilities. Backers of the status quo scenario find little business value justification and line of business support in making any changes. Many line of business executives and CIOs gain peace of mind knowing that their CRM landscape remains consolidated on one or two platforms and can deliver the power of an integrated core.
  2. Move to shiny new CRM (21.2 percent). Organizations may choose to stay with their existing vendor to avoid any mass changes in training, adoption and implementation costs. Another popular option will be to do a full out rip and replace. The financial wonks will weigh the cost of a reimplementation against the cost of doing nothing – status quo and making an upgrade with an existing vendor. CIO-led organizations will want the power of an integrated core and minimize point solutions.
  3. Consolidate CRM and augment with best-of-breed (37.9 percent). Organizations may choose to consolidate their CRM environment and surround with best-of-breed applications. SaaS applications and CRM point solutions now play a key role in enabling extensibility to CRM customers. Augmentation with third-party solutions with an integrated core not only ensures that business users gain critical functionality, but also provides users with leverage in future contract negotiations. With CMOs and line of business executives in the front office taking back IT budgets, expect CIOs to argue for consolidation of the core as a call for sanity in overall IT strategy.
  4. Upgrade CRM and surround with best-of-breed (26.6 percent). CRM deployments typically run a five to seven-year life cycle. With the last big set of implementations in the 2004 to 2005 era, almost 50 percent of organizations plan an upgrade. Many line of business executives want to upgrade their core CRM system and then modernize their integrated core by adding best-of-breed apps on top of CRM. This option resonates best with line-of-business-led organizations and those with rapidly changing business models and dynamic businesses.

Figure 1.  Get To SCRM By Taking The Four Paths To CRM Optimization

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Research Summary: Demystifying Enterprise Gamification For Business

Purpose and Intent

Much hype surrounds the topic of gamification. Often seen as a technique to add engagement to existing tasks, projects, marketing campaigns, and initiatives, the term gamification unfortunately lacks the seriousness it deserves. This report seeks to change the point of view and demonstrate where gamification plays a role in the enterprise. More importantly, executives will discover how gamification can drive behavior and outcomes through both monetary and non-monetary incentives in enterprise class settings.

Executive Summary

Gamification describes a series of design principles, processes and systems used to influence, engage and motivate individuals, groups and communities to drive behaviors and effect desired outcomes. Originating from the video game industry, many of these pioneering concepts now play a key role in driving incentive and behavior management for both brands in the consumer world and internal scenarios in the workplace. Enterprise gamification is a user experience (UX) and consumerization of IT (CoIT) trend that will take the market by storm in 2012. Constellation believes that by 2013, more than 50 percent of all social business initiatives will include an enterprise gamification component.

In interviews with 55 early adopters of enterprise gamification, Constellation identifies the three core pillars that include measurable action, reputation and incentives. By creating triggers through both monetary and non-monetary incentives among customers, employees, partners, suppliers and other interested parties, organizations can secure sustainable engagement and drive business outcomes such as improved marketing response from external communities, sustained long-term customer loyalty, increased collaboration among internal teams, or enriched onboarding, delivering success with new hires, partners, and customers.

Enterprise gamification requires an application of psychology and behavioral economics to incentivize outcomes. Because enterprise gamification maps closely to human behavior, organizations will want to follow Constellation’s best practices in appealing to the “Seven Deadly Sins” for gamification design.

Research report surfaces leading practices from 55 early adopters

Some highlights of the report include:

  • Details on who’s using gamification across the enterprise
  • The three pillars of enterprise gamification
  • The six elements of sustainable engagement
  • Sustainable behaviors to drive desired business outcomes
  • The Seven Deadly Sins to Optimize Gamification Design
  • The top gamified business processes for the enterprise (see Figure 1)

Figure 1. Marketing, Customer Service and HR Processes Lead in Gamified Processes

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Research Summary: Market Overview – The Market For SAP Optimization Options

Forward And Commentary

This market overview provides a starting point to SAP customers seeking optimization solutions.  The document delivers actionable advice and insights into a proven collection of software solutions.  As part of the full series, best practices documents will follow with in- depth case studies and a critical product evaluation of this growing market of SAP optimization solutions. 

A. Introduction

With the average Global 2000 ERP deployment nearing 11.5 years in service, ERP customers face a significant challenge with updating their existing investments. Installed pre-Y2K, users have attempted to work around the best practices of the ‘90s while seeking innovation and application agility. Subsequently, SAP users face three main challenges:

  1. Higher cost of ownership that reduces overall ROI.
  2. An aging and brittle infrastructure that hampers innovation.
  3. Increasing complexity that hampers greater adoption.

B. Research Findings

As SAP customers choose their go- forward apps strategy, interviews from 100′s of clients show that four paths emerge (see Figure 1):
  1. Stay with status quo;
  2. Move to shiny new SAP.;
  3. Stabilize SAP and augment; and
  4. Modernize SAP and surround with best-of-breed.
Figure 1. The Four Paths Of SAP Optimization

 

Consequently, an $80.1 billion third-party SAP ecosystem has emerged to address nine key areas (details on each vendor in the official report):

Research Summary: Best Practices – The Case For Two-Tier ERP

Forward And Commentary

Legacy optimization remains a key component for funding future innovation.  Two-tier ERP emerges as one strategy to optimize existing systems while adding innovation.  The report capitalizes on the recent Software Insider survey of 235 companies looking at future strategies.

A. Introduction

Organizations continue to face an onslaught of business requirements that their existing ERP systems can no longer address.  Stuck in the past century, these ERP systems are expensive to run, difficult to upgrade, and impossible to modify for today’s fast changing requirements.  Two-tier ERP has emerged as a strategy to enable legacy optimization while reinvigorating the organization’s existing ERP systems.

B. Research Findings

Two-tier ERP refers to a business and technology strategy that enables organizations to keep existing ERP systems at the corporate level while empowering divisions or business units to innovate with a second ERP system.  Consequently, two-tier ERP deployments continue to gain favor.  Why? Organizations must optimize legacy systems while delivering on business value.  In fact, in a recent Constellation Research survey, 48% of respondents indicated that they are considering at two-tier ERP strategy (see Figure 1).  These results reflect a 27-point increase from 2009.

Figure 1.  Two-Tier ERP Growing In Popularity As A Key Strategy

While today’s two-tier strategies mostly involve on-premises solutions, cloud based solutions will gain favor over the next 18 to 24 months because of their rapid deployment capabilities, constant innovation qualities, and subscription pricing.  Organizations challenged by diverse lines of business, multiple localization requirements, or needs to phase in legacy system modernization will find a two-tier ERP strategy one that can reduce costs and provide better business value than a one-size-fits-all solution.  Whether SaaS, on-premises, or hybrid, a two-tier ERP strategy will reduce costs, meet new business requirements, and provide better business value. More…

Research Summary: Software Insider’s Top 25 Posts For 2010

Themes In 2010 Reflected The Buy Side Demand For Both Optimization and Innovation

Technology buyers in 2010 focused most of their priorities on finding cost savings through legacy optimization, navigating a flurry of disruptive technologies, and designing/experimenting with new business model innovations.  Consequently, the top 25 posts for 2010 reflected these 3 major themes:

Legacy Optimization

Disruptive Technology

Business Innovation

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Research Summary: An Enterprise Software Licensee’s Bill of Rights, V2

FORWARD AND COMMENTARY
“An Enterprise Software Licensee’s Bill of Rights (LB0R) V2″ brings the 10th installment of an on-going series to provide clients with insight on how to better align their packaged apps strategies.  Version 2 of the LBoR updates the original groundbreaking list of 36 best practices for software licensing and pricing and provides a good check list for contract negotiations strategy.  Eleven new rights have been added that reflect support for new deployment options, cost savings beyond the current recession, mitgation from future lock-in, and client best practices.

Other documents as part of the ongoing series on packaged apps strategy include:

  1. Why You Need A Long-Term Apps Strategy
  2. Forrester’s Long-Term Packaged Applications Strategy Framework
  3. Does Your Apps Strategy Support Your Corporate Business Drivers?
  4. Packaged Apps Strategies Take A Back Seat At Most Enterprises
  5. The ROI Of Packaged Apps Instance Consolidation
  6. Five Steps To Building A Recession Proof Packaged Apps Strategy
  7. Shape Your Apps Strategy To Reflect New SaaS Licensing And Pricing Trends
  8. Third Party Apps Maintenance Rebounds
  9. Craft Your Negotiations Strategy To Reflect New Packaged Apps Licensing And Pricing Trends
  10. An Enterprise Software Licensee’s Bill of Rights, V2

RESEARCH HIGHLIGHTS

A. Introduction

Since publication in December 2006, the LBoR has played a key tool in enterprise software contract negotiations and packaged apps strategy for over 1000 of my software licensing, pricing, and contract negotiations at Forrester.  During the update of the LBoR, over 100 end users and 70 vendors contributed to the addition of 11 new rights.   This document remains a must read for all those engaged in software contracts.

B. Research Findings

Changing market conditions result in new rights

Four themes emerged among the 11 additional rights added (see Figure 1):

  • Support for new deployment options. Virtualization and SaaS transcend interesting pilots and concepts and become the norm in mainstream adoption. Users will expect to achieve savings in virtualized instances, the ability to swap user and usage rights among new deployment options, and protection from SaaS vendor bankruptcies.
  • Cost savings beyond the current recession. Renewed focus on cost reduction drive enterprises to identify short- and long-term opportunities. These roles expect choice, value, and predictability in their vendor’s support and maintenance programs.
  • Mitigation from future vendor lock-in in a less competitive environment. Consolidation results in less competition. Users should seek leverage in contract negotiations beyond the initial purchase.
  • Additional client input into best practices. More than 70 software vendors and 100 Forrester clients and Software Insider blog readers provided similar suggestions for improvements in the selection and implementation phases of the software ownership life cycle.

Figure 1. Eleven New Rights Reflect Changing Market Conditions and Client Input

11 New Rights in the LBoR V2

Figure 2. An Enterprise Software Licensee’s Bill of Rights, V2

An Enterprise Software Licensee's Bill of Rights, V2

Recommendations – Use the bill of rights as the centerpiece in contract negotiations

Now’s the time to review existing relationships and renegotiate contracts using the LB0R V2 as a reference guide.  Apply seven simple steps to successfully negotiate enterprise software contracts and build a long-term packaged apps strategy:

  1. Assemble the right team.
  2. Identify the key business drivers.
  3. Apply the software ownership life cycle and the licensee’s bill of rights.
  4. Determine the product adoption plan.
  5. Align product adoption strategy with contract negotiation objectives.
  6. Identify main leverage points.
  7. Finalize the negotiation strategy.

C. Report Links

To read the details about each end-user right, seven simple steps, recommendations and the “What It Means” cycle, click here for the Forrester Report: An Enterprise Software Licensee’s Bill of Rights, V2 . For media courtesy requests, please send me an email to rwang@forrester.com

Read other POV on the Enterprise Software Licensee’s Bill of Rights

Your POV.

Would love your feedback on the report.  Looking for help with your SAP, Oracle, Infor, Lawson, Microsoft Dynamics, or other enterprise software contract?   You can post here or send me a private email to rwang0 at gmail dot com.

Copyright © 2009 R Wang. All rights reserved.

Research Summary: Shape Your Apps Strategy To Reflect New SaaS Licensing And Pricing Trends

FORWARD AND COMMENTARY
“Shape Your Apps Strategy To Reflect New SaaS Licensing and Pricing Trends” represent the seventh report in an on-going series to provide clients with insight on how to better align their packaged apps strategies.  As more and more clients seek SaaS solutions as options to pipe in innovation and potentially control costs, clients should be aware of how to build a SaaS strategy that remains sustainable and prevents vendor-lock in.

Other documents as part of the ongoing series on packaged apps strategy include:

  1. Why You Need A Long-Term Apps Strategy
  2. Forrester’s Long-Term Packaged Applications Strategy Framework
  3. Does Your Apps Strategy Support Your Corporate Business Drivers?
  4. Packaged Apps Strategies Take A Back Seat At Most Enterprises
  5. The ROI Of Packaged Apps Instance Consolidation
  6. Five Steps To Building A Recession Proof Packaged Apps Strategy
  7. Shape Your Apps Strategy To Reflect New SaaS Licensing And Pricing Trends
  8. Third Party Apps Maintenance Rebounds
  9. Craft Your Negotiations Strategy To Reflect New Packaged Apps Licensing And Pricing Trends

RESEARCH HIGHLIGHTS

A. Introduction

Recessionary forces drive applications professionals to seek new delivery models such as software-as-a-service (SaaS), platform-as-a-service (PaaS), and other XaaS (X-as-a-Service) models. But with these options’ upfront benefits in choice, value, and predictability come new ownership risks that applications professionals and business stakeholders should explore. Forrester’s review of 11 vendors in SaaS enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM) confirms that, motivated by heavy competition for new customers, these vendors remain vigilant in mitigating such end-user concerns. In fact, SaaS vendors continue to improve and refine subscription models for new buying scenarios beyond cost/user/month. Forrester recommends that all applications professionals include SaaS in their firm’s long-term packaged apps strategy and that they take five key actions to mitigate risk while avoiding lock-in.

B. Research Findings

The Recession Is Driving Increased SaaS Adoption 

Faced with impending IT budget cuts, increasing business demands, and the encumbrances of legacy packaged apps, enterprises are increasingly turning to true multi-tenant SaaS delivery options during the downturn.  SaaS adoption as part of a long-term apps strategy keeps growing because:

  • Subscription pricing reduces capital expenditures (capex).
  • SaaS enables more-rapid deployment.
  • Enterprises expect frequent updates with new functionality.
  • Business leaders drive more and more software decisions.
  • Vendor success generates buzz and increased interest.

Vendors Demonstrate Continued Evolution And Value of SaaS Pricing Models
Forrester analyzed the completed, work-in-progress, or ongoing initiatives for the latter half of 2008 for seven SaaS applications vendors. The software licensing and pricing trends Forrester found include refined pricing models, new bundling and unbundling options, and a focus on fixed-price implementations. Specific trends for these SaaS apps vendors include:

  • Amitive delivers a usage-based model to foster collaboration and community participation.
  • Intuit attaches a SaaS services model to on-premise QuickBooks Enterprise Solutions.
  • Intacct reduces the barrier of entry for SMBs while simplifying channel pricing.
  • NetSuite continues to expand vertical-edition bundling and flat-fee pricing for add-ons.
  • QuickArrow delivers choice with tiered and bundled user-based pricing models.
  • salesforce.com provides more value for existing license fees and more user tiers.
  • Workday maintains a simple subscription pricing model based on company size.

Recommendations – Adopt SaaS Benefits While Mitigating Risks In Your Long-Term Apps Strategy

Keep in mind that while cost/user/month SaaS pricing models may seem simple at first, factors such as connection points, storage, support, and module-based pricing can quickly add to their complexity. In addition, true multitenant SaaS models leave users without the software code should the vendor go bankrupt or the client choose to end its relationship with the vendor. While considering SaaS as part of a long-term apps strategy, enterprises should follow these simple suggestions to get the most out of SaaS and mitigate risk:

  • Balance pay-as-you-go month-to-month terms with long-term contracts.
  • Compare SaaS versus on-premise over an appropriate period.
  • Understand long-term ownership implications.
  • Seek more than just refunds for outages in service-level agreements.
  • Choose a financially viable SaaS vendor or seek a software escrow-like mechanism.

C. Report Links

Click on the link for the detailed report along with the “What It Means” and “Alternate View” for: Shape Your Apps Strategy To Reflect New SaaS Licensing And Pricing Trends. For media courtesy requests, please send me an email to rwang@forrester.com

Your POV.

Would love your feedback on the report.  You can post here or send me a private email to rwang0 at gmail dot com.

Copyright © 2009 R Wang. All rights reserved.

Research Summary: Five Steps To Building A Recession Proof Packaged Apps Strategy

FORWARD AND COMMENTARY
The five steps to building a recession proof packaged apps strategy represent the sixth report in an on-going series to provide clients with insight on how to better align their packaged apps strategies.  Aligned with operational efficiency and regulatory compliance business drivers, these best practices provide a road map for more efficient investment.

Other documents as part of the series include:

RESEARCH HIGHLIGHTS

Introduction
Enterprises continue to face tremendous change from new business models, economic crises, changing workforce dynamics, and technology advancement. The current global recession challenges enterprises to tightly align packaged apps strategies with relevant business drivers. With regulatory compliance and operational efficiency as top-of-mind concerns, enterprises must recession-proof existing strategies to achieve sustainable change, identify opportunities to make business processes more efficient, choose the most effective technology strategy, and reexamine vendor relationships. The near-term goal: Find ways to optimize existing investments in packaged apps in order to free up money to fund not only budget cuts but also potential revenue sources for innovation.

Research Findings

The five steps take into account business drivers, people and organizational dynamics, process optimization, technology strategy, and vendor ecosystems and relationships.

  • Step 1: Align Packaged Apps Strategy With Recession-Relevant Business Drivers. Today’s key business drivers must align with regulatory compliance and achieve cost avoidance and risk mitigation.  Operational efficiency drivers attain short-term and long-term recurring cost savings.
  • Step 2: Organize The Stakeholders For Sustainable Change. Move beyond top-level executive sponsorship to create bottom-up buy-in.  Align business and IT through corporate planning and budgeting. Instill a program management discipline.
  • Step 3: Identify Opportunities In Commoditized And Differentiated Processes. Design with the end in mind. Apply process mapping to identify common processes.  Shift investments from commoditized to competitively differentiated processes.
  • Step 4: Select Effective Technology Strategies. With business drivers in hand, stakeholder alignment in place, and business processes identified, application delivery professionals can then begin work on technology strategies.  Strategies that align to both regulatory compliance and operational efficiencies include:  consolidating apps instances and deploying data archiving strategies.  Strategies that align to operational efficiencies include: optimizing upgrade planning, preparing for new deployment options such as software-as-a-service (SaaS), and incorporating upfront quality management and testing.
  • Step 5: Reexamine Your Vendor Relationship. This fifth and final step to recession-proofing an organization’s existing apps strategy traditionally represents the first step app delivery pros take when making decisions about apps strategy. However, by saving this step for last, app delivery pros gain the freedom to make decisions based on business needs rather than bias toward a particular vendor or technical solution. This approach will favor vendors that deliver choice, value, and predictability in the overall relationship as well as provide greater alignment between apps strategy and business drivers.

Report Links

Click on the link for the detailed report: Five Steps To Building A Recession-Proof Packaged Applications Strategy. For media courtesy requests, please send me an email to rwang@forrester.com

Your POV.

Would love your feedback on the report.  You can post here or send me a private email to rwang0@gmail.com.

Copyright © 2009 R Wang. All rights reserved.

Research Summary: Which Has The Better Apps Strategy: Oracle Or SAP? Oracle’s Bold Next-Generation Play Versus SAP’s Less Disruptive Path

Forward and Commentary

With my esteemed colleagues John R. Rymer and Paul D. Hamerman, we recently updated our Oracle Versus SAP In Enterprise Applications: Let The Battle Of Architectures Begin! report published in May 31st, 2006.  This new update was released October 31, 2008 and highlights a shift in direction and vendor vision for both Oracle and SAP’s future.  This report was the result of 12+ months of active research.  We placed significant emphasis on primary research, discussions with system integrators, conversations with leading customers, and on-the-record and off-the-record discussions with current and former Oracle and SAP employees.

Executive Summary

A key decision criterion for enterprise applications is how compelling and clear the vendor’s vision for the future is. Oracle’s vision for the future of its apps business is now clearer and more compelling than that of archrival SAP. But Oracle’s biggest test is yet to come: it must deliver the Oracle Fusion Applications system with its associated promises of better flexibility and lower cost of ownership and do it within the next two years to keep the upper hand in apps innovation. SAP offers a gradual and potentially less disruptive path for enterprise customers, evolving its current release piece by piece; it has also taken its innovative SAP Business ByDesign product off the table as its next-generation suite. Each vendor now offers more (and more complex) paths for customers to consider, but it is unlikely that mass defections will take place in either direction. Despite the size and influence of Oracle and SAP, customers should challenge the vendors to prove the value of their migration and upgrade strategies, including assessing whether either vendor offers better front-office or vertical solutions than best-of-breed suppliers or emerging cloud-based solutions.

Report Links

Click here for the link to the Forrester report: Which Has The Better Apps Strategy: Oracle Or SAP? Oracle’s Bold Next-Generation Play Versus SAP’s Less Disruptive Path. For media courtesy requests, please send me an email to rwang@forrester.com

Your POV.

Would love your feedback on the report.  You can post here or send me a private email to rwang0@gmail.com.

Copyright © 2008 R Wang. All rights reserved.