Home › Posts tagged driver

Tag: driver

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , ,

Italian insurer Reale Group found itself with four cloud providers running around 15% of its workloads, and no clear strategy to manage them. “It was not a result we were seeking, it was the result of reality,” said Marco Barioni, CEO of Reale ITES, the company’s internal IT engineering services unit.

Since then, Barioni has taken control of the situation, putting into action a multi-year plan to move over half of Reale Group’s core applications and services to just two public clouds in a quest for cost optimization and innovation.

Multicloud environments like Reale Group’s are already the norm for 98% of infrastructure-as-a-service or platform-as-a-service users — although not all of them are taking control of their situation the same way Barioni is.

That’s according to a new study of enterprise cloud usage by 451 Research, which also looked at what enterprises are running across multiple public clouds, and how they measure strategy success.

Two-thirds of those surveyed are using services from two or three public cloud providers, while 31% are customers of four or more cloud providers. Only 2% had a single cloud provider.

Those enterprises’ cloud environments became even more complex when taking into account their use of software-as-a-service offerings. Half of those surveyed used two to four SaaS providers, one-third used five to nine providers, and one-eighth used 10 or more. Only 4% said they used a single SaaS solution, no mean feat given the prevalence of Salesforce, Zoom, and online productivity suites such as Microsoft 365 or Google Workspace.

The study, commissioned by Oracle, looked at the activities of 1,500 enterprises around the world using IaaS or PaaS offerings, or planning to do so within the next six months. The research was conducted between July and September 2022.

Three years on from the first COVID-19 lockdowns, it’s clear the pandemic was a significant driver of multicloud adoption for 91% of those surveyed. But now that the immediate necessity of the switch to remote operations and remote management has passed, enterprises are seeking other benefits as they build their multicloud environments.

Why build a multicloud infrastructure?

The two most frequently cited motivations for using multiple cloud providers were data sovereignty or locality (cited by 41% of respondents) and cost optimization (40%). Enterprises in financial services, insurance, and healthcare were most concerned about where their data is stored, while cost was the biggest factor for those in real estate, manufacturing, energy, and technology.

Next came three related concerns: business agility and innovation (30%); best-of-breed cloud services and applications (25%); and cloud vendor lock-in concerns (25%). Going with a single cloud provider could prevent enterprises from accessing new technology capabilities (such as the much-hyped ChatGPT, which Microsoft is using to draw customers to its Azure cloud services), leave them with a second-best service from a cloud provider less invested in a given technology, or allow the provider to hold them hostage and raise prices.

Traditional benefits of duplicating IT infrastructure were least important, with greater resiliency or performance cited by 23% of respondents, and redundancy or disaster recovery capabilities by just 21%.

But there are still many factors holding back multicloud adoption in the enterprise. Cloud provider management was the most frequently cited (by 34% of respondents), followed by interconnectivity (30%). It was a tie for third place, with data governance issues, workload and data portability, regulatory compliance, and ensuring security across public clouds all cited by 24%.

“The degree to which benefits outweigh challenges may depend on whether multicloud is part of a broader IT transformation strategy … or the extent to which it addresses particular cost, organizational or governance concerns,” wrote Melanie Posey, author of the study. Simply having multiple public cloud environments to meet different users’ needs may be good enough for risk mitigation and cost arbitrage for some enterprises, she wrote, while others will want integrated environments in which workloads and data can run across multiple public clouds.

Reality bytes

Reale Groupe is still straddling those two states as IT leader Barioni moves the company from relationships with four hyperscalers that just happened toward a greater reliance on two that he chose.

His choice of clouds — Oracle’s OCI and Microsoft’s Azure — was constrained by Reale’s reliance on Oracle’s Exadata platform. “Our core applications all run on Oracle databases,” he said.

While several cloud providers offered the packaged services for machine learning and advanced process management he was looking for, the choice of Microsoft to host the remaining business applications came down to latency, he said. Oracle and Microsoft have closely integrated their infrastructure in the regions most important to Reale, allowing the company to build high-speed interconnects between applications running in each cloud. Reale will move its first integrated applications to the cloud in March 2023, he said.

Multicloud management

Johnson Controls is further along in its multicloud journey. It makes control systems for managing industrial processes and smart buildings, some of which can be managed from the cloud-based OpenBlue Platform run by CTO Vijay Sankaran. He said that, while the company has a primary cloud provider, it has chosen to architect its platform to operate across multiple clouds so it can meet its customers where they are.

That multicloud move has meant extra work, connecting everything to a common observability platform, and ensuring all security events feed up to a single, integrated virtual security operations center so that the various clouds can be monitored from a single pane of glass, he said. While the overhead of adding more cloud providers is to be expected, the same problem exists even when dealing with a single hyperscaler, as different regional instances may have specific controls that need to be put in place, he added.

The study also asked enterprises what key outcomes they expected from a multicloud management platform. Only 22% cited the single pane of glass that Sankaran relies on. The top responses were cloud cost optimization (33%), a common governance policy across clouds and integration with on-premises infrastructure (both 27%), improved visibility and analytics (26%), and integration with existing toolsets (25%).

Cost control

Whether an enterprise chooses to spread its workloads across more public clouds or concentrate them on fewer, it all seems to come back to managing cost.

Reale Group’s Barioni has a plan for that involving a core team with a mix of competencies: some technology infrastructure experts, and some with a deep knowledge of accounting. Developers tend to aim for the best technical solution, which is often not the most cost-efficient one, he said.

When applications run on premises, computing capacity — and therefore cost — is limited by what the data center can hold, whereas there are few limits on the computing capacity of the cloud — or its cost. Bringing together the technically minded and financially minded will help Barioni balance cost and performance in this new, unconstrained environment. “Every day, you have to take decisions on prioritizing your workloads and deciding how to optimize the computing power you have,” he said. “It’s a completely new mindset.”

Multi Cloud

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , , , , , , , ,

There’s an old saying when something you value changes and no longer brings you the joy the way it used to, “it’s not like it used to be.” For those who remember the good old days, great service was an essential part of the customer experience. Nowadays, customer service is not what it used to be. For decades now, customer service has become a necessary cost center. The emphasis on scale, automation, speed, and margins have also come at the cost of customer experience. However, new research now shows that the role of service is shifting back to “service,” to unify the customer’s experience.  

Since the dawn of the contact center in the 1960s, customer service evolved into a transactional entity. Over the years, executives learned to think of service as a numbers game, cycling customers on and off the phone and closing-out tickets as fast as possible, regardless of whether or not customers had a positive impression of the company in each interaction. That mindset would serve as models for deploying next-gen technologies, including IVRs, knowledge centers, chatbots, automation/RPA, text/messaging, with each designed to scale transactional engagement vs. delivering the level of service customers hope to receive. 

Customer experience reflects all customer engagements; Service can no longer serve as the weakest link 

The customer experience — the sum of all engagements, beyond customer service, a customer has with a business — is core to business success today. A related study of customers and B2B buyers published by Salesforce, the “State of the Connected Customer,” showed that nearly nine-in-ten respondents consider experience to be as critical as the product, itself, in deciding whether or not to buy from a company. This means that the experience you deliver is also a product.  

Nearly all respondents to that survey said a positive service experience makes them more likely to make a repeat purchase (94%). The same study also found that 71% of customers had switched brands in the last year with 48% switching companies for better customer service. These are critical insights especially in the current economic environment, when budgets are tightening, and loyalty becomes more important to the bottom line.  

Every facet of that experience must contribute to the great whole of the brand experience you promise. If customer service is viewed as a cost center and metrics prioritize speed over quality and transactions over relationship, it will always take away from the customer’s experience instead of enhancing it.  

There’s good news to report for service professionals. In its fifth edition of the “State of Service,” Salesforce found that companies are increasing investments in employees and technology budgets to match case volume and customer expectations. Over half of service organizations (55%) report increased budgets — up from 32% in 2020. And 51% report increased headcount — up from 19% in 2020. 

Mindset: The value of service shines when it’s meant to enhance the customer experience 

As customers become increasingly connected and empowered, their expectations soar. Service as a cost center is no longer a viable strategy to stand out against competitors where everything either takes away from or adds to the experience. It comes down to a shift in mindset, from a cost center mentality to a revenue generator. When executives invest in customer services that enhances their experience, customers are more likely to make repeat purchases and stay loyal.  

That truth is increasingly penetrating the hallowed walls of C-Suites and the boardroom.  

More than 50% of respondents in Salesforce’s survey of customer service professionals say their management now views their department as a revenue generator, rather than the cost center it may have perceived to be. That’s a significant tipping point that makes service performance all the more important not just for companies as a whole, but for the people in charge of delivering customer service. 

If you need more proof of this phenomenon, consider that over one-third of customer service leaders are now in the C-level — an unprecedented level of representation at the highest reaches of business structures.  

The fact that these are sourced from customer service ranks speaks volumes. And there’s appetite for this trend to continue. Nearly nine-in-ten of customer service respondents who don’t have C-level representation see its value. 

With the rise of roles such as chief customer officers and chief experience officers, service becomes one, albeit critical, part of the overall customer experience. It no longer has to represent the weakest link in the customer journey. 

Connection is the heart of service 

Driving customer success starts with connection to engage customers to meet and eventually exceed customer expectations. 

Think about the myriad of touchpoints that proliferate the path to purchase — and repurchase and loyalty — today. We often talk about this in terms of striving for omnichannel engagement. But beyond business buzzwords, a customer would never use the word omnichannel, it’s important to humanize the customer experience by considering the different, disconnected, departments that touch the customer journey. For example… 

Are service agents aware of marketing campaigns a given customer has received when they make contact? Do they have an informed sense of how a customer has navigated the company’s e-commerce touchpoints? Is the customer’s historical experience, preferences, previous purchases, available to service agents and all frontline executives responsible for customer engagement through their journey? Is integrated data and insights available to power AI in ways that present next best actions and experiences at a personal level, whether that’s an agent, chatbot, or self-guided path? If in a B2B company, are they aware of salesperson interactions?  

This is all critical context that service reps need to meet elevated customer expectations for efficient, tailored engagement. 

So, have companies met those customer expectations for connected engagement? According to the “State of the Connected Customer” survey, they have not.  

Three-in-five respondents say they generally feel like they are interacting with different departments rather than one company. And unfortunately, two-thirds say they often need to repeat information to different agents. When nearly all customers say a positive service experience makes them more likely to make a repeat purchase, is this status quo serving service’s elevated business mandate? 

This attests to a cost-center vs. growth mindset. In each case, the outcomes are very different. 

Compare high-performing service teams — those with the highest customer satisfaction levels — and their underperforming peers. The top teams are empowered to treat unique customers with unique engagement, think freedom from restrictive policies that don’t put all customer situations into a single category of service. Top teams are also more empowered with contextual information that details a customer’s entire journey, whether with service, or another team.  

In these cases, over three-fifths of service teams now share the same CRM software with their colleagues in other departments like ecommerce, sales, and marketing.  

Context matters in a digital-first world 

Let’s talk about the other critical element of meeting elevated customer expectations: digital channels and, more importantly, customer context. 

Even though the world is opening up, the use of digital channels, such as social media and customer portals, have not backtracked. In fact, customers say they are likely to spend more time online than before 2020. This is leading to the adoption of more digital-first touchpoints. Nearly three-in-five customers now prefer to engage through digital channels.  

Before you ask, yes, that preference skews higher among younger demographics. But still, channels such as phone and email are dropping, and digital-first touchpoints are rising across the board.  

Responses to this trend are represented in the increasing adoption among service organizations of channels like mobile apps, forums, and especially video. But a wholesale shift to digital channels ignores critical nuance…context. 

Key objectives are shifting to reflect a focus on efficiency, cost savings, and doing more with less 

Customers veer towards different channels depending on the circumstances. For instance, 59% of customers prefer self-service tools for simple issues while 81% of service professionals say the phone is a preferred channel for complex issues — up from 76% in 2020.  

Wherever they go, customers want their interaction to be easy, seamless, and fast. Let’s focus for a moment on the preference for self-service for simple issues. This is a great example of where customer and company priorities meet — in this case, in the pursuit of efficiency. 

Customer success excellence in today’s environment isn’t easy. Salesforce research found that 83% of customers expect to interact with someone immediately, and 83% expect to resolve complex problems through one person.  

Service professionals are feeling the pressure too, with 60% recognizing the increase in customer expectations since before the pandemic. 

Shifting KPIs reflect a focus on efficiency 

The preference for self-service for simple matters coincides with a heightened focus on efficiency for companies facing uncertain economic conditions. 

Organizations are being asked to do more with less and reduce costs. This is reflected in the rise of efficiency-related service KPIs, such as case deflection, customer effort, and first contact resolution.  

While self-service is a great foray into this pursuit, it can only go so far. How else can service organizations maximize customer satisfaction while using resources most efficiently? 

The answer lies at least in part in technology. Specifically, nearly three-fifths of service organizations now use at least one form of workflow or process automation — freeing up agents to focus on the higher value, more complex work that customers with more pressing or unique needs demand in exchange for repeat purchases.  

Users of automation reported significant benefits, such as time savings, better customer focus, and fewer errors in addressing customer needs. 

Three takeaways to transform service into a growth (and customer relationship) engine  

Service plays an important role in delivering a connected, efficient, and product customer experience. More importantly, service itself is shifting from a necessary cost center to a strategic growth engine. 

Service organizations are now at the forefront of strategic shifts across industries. Leaders are investing in continued momentum as well as future disruptions as customer expectations only continue to increase. 

1) Shift from a service mindset to an experience mindset 

Customers don’t see a “service department” — they see one company. As elevated, connected experiences become more commonplace, any instance of a disconnected, siloed experience across sales, service, marketing, and beyond will stand out and prompt customers to seek out better alternatives. Connecting service people, processes, and technology with their cross-functional counterparts helps mitigate this risk and elevate the overall customer experience. 

2) Empower employees as much as customers 

Scaling digital engagement offerings for customers has its merits, but we need to also think about what capabilities employees need to engage across these channels and provide the tailored, empathetic, and contextualized service customers deserve. Technology is a big part of this equation. But all the technology in the world won’t make much of a difference without the evolved policies and processes that transformation requires. 

3) Audit metrics for efficiency, scale, and experience 

Tried-and-true service metrics aren’t going anywhere, but a narrow focus on closing out as many tickets with as few agents as possible is a recipe for CX and service failure. Think about how KPIs can help identify areas of improvement as you scale across new channels, for instance. As resources get scarcer among economic uncertainty, look for ways to do more with less, without compromising the experiences customers have and take away from each engagement. 

Business Services