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 Chuck SchaefferIs There a CX Software Market?
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Are CX Strategies Best Supported By Purpose Built CX Software?

It’s clear to most that Customer Experience Management (CXM or just CX) is a business strategy with measurable objectives, systemic business processes and supporting analytics; but what’s not so clear is whether there is a distinct enterprise software market sector to support this business strategy. So, is there a CX software market? Gartner says no. Forrester says yes. My friend Paul Greenberg says no, and there never will be. Several software technology publishers say yes, and they have the CX software to show.

In my CXM video conversation with CRM industry heavy weight Paul Greenberg, he delivers a resilient statement that CX is not a software market, and I think he’s making that proclamation in largest part to the enterprise software technology companies that are forcefully moving to offer and deliver CX-labeled software solutions designed and marketed to fulfill CX strategies. Paul makes a convincing case as we currently assess the market. But business strategies need software automation to scale, ensure consistent processes and deliver analytics to decision makers which feed continuous process improvement. So the next question may be does CX strategy require CX software, or is CX supported by existing software technologies such as CRM software?

Not to be lost on this top of mind C-suite objective and growing market opportunity, several business software publishers are changing their branding and promotion – effectively moving away from CRM software solutions – to a new brand of CX software.

Oracle calls it Oracle CX. Kana changed its CRM product name from Service Experience Management to Customer Experience Management. In my discussions with Steve Kraus and Brian Callahan, senior CRM executives at Pega software, they point out a subtle but interesting change in terminology from their customers, noting that customers are now using the phrases “customer relationship management” and “managing relationships with customers” as two different topics; with the former CRM phrase being largely technology-oriented and the second being more process oriented and followed by a conversation about CX and customer-centric strategy.

This CX software positioning really began with Greg Gianforte, then CEO of RightNow Technologies, about three years ago. Greg both evangelized CX and wasn’t shy to throw CRM under the bus as part of the problem that needed to be remedied. He suggested that the CRM failure rate and inability to put the customer first mandated the need for a new software technology. He raised interesting points, but in reality if the CRM software market was such a failure, it probably wouldn’t be an $18 billion industry achieving double digit growth. Similarly, the failure to put the customer first is a management error, not a software limitation. In fact, putting technology ahead of strategy is what contributed to the first named problem of CRM failure rates.

While Customer Experience messaging didn’t resonate with the market as positioned by RightNow, and RightNow failed to create a new enterprise software category where they could be viewed apart from Oracle, SAP and Salesforce.com, the company nonetheless delivered an impressive B2C, cloud-based customer service application and was ultimately acquired by Oracle in January 2012, and which then gave Oracle a second bite of the apple.

Oracle’s acquisition of RightNow Technologies was a contributing piece to a broader Oracle CX portfolio. Oracle suggests that Customer Experience objectives are best served with a collection of integrated software solutions, each purpose built to deliver the right content at the point of customer interaction exactly when needed.

This positioning may make more sense. There’s a reasonable case to be made for a collection of software automation tools used to extract and deliver data in a real-time, in a contextually sensitive and intelligible manner that can arguably be branded as a CX software solution, and where the technology specifically facilitates customer interaction processes and outcomes. And unlike Gianforte’s positioning, Oracle promotes a CX software solution without throwing CRM under the bus, and suggests that while CRM software has become table stakes, and will seldom if ever deliver competitive advantage, it is nonetheless part of the CX fabric and required for many customer facing transactions.

But taking Oracle’s stand a step further begins to blur the scope of CX as a software solution. The proliferation of customer channels leaves any single technology solution underpowered. Instead, an orchestrated assembly of software solutions which include MDM (master data management), CRM, contact center and new marketing automation technologies; back-office applications such as ERP, SCM and MRP; customer engagement tools such as VOC (voice of the customer), EFM (enterprise feedback management) and simple survey applications; and BI (business intelligence) solutions to aggregate the data and convey actionable information to decision makers and drive continuous process improvements are all part of the blend needed to serve customers in a way that consistently meets or exceeds their expectations.

Achieving Customer Experience objectives actually requires a mash-up of enterprise software with the goal of delivering the specific content or knowledge at the right customer interaction point exactly when needed. But looked at another way, what enterprise software application doesn’t contribute in some way to a customer experience management process? What enterprise software doesn’t house customer data or the product, sales, purchasing, movement or ancillary data that’s needed to respond to customer inquiries? Hmm… Can’t think of any, which then suggests that everything we’ve been calling “IT” is really “CX”. It’s déjà vu all over again.

Or is there something in between?

To discover the software technologies that support CX objectives, you can begin looking in sectors we’ve come to know for some time, starting with Customer Relationship Management.

That’s not to suggest that as businesses mature and markets become more competitive that the current era of enterprise applications are up to the complex task at hand. They’re not. Delivering exactly the right contextual information in near real-time through all channels and devices to the staff or customers exactly when needed and in a way to consistently meet or exceed customer expectations is a tall order, and one that will be responded to with a mix of existing and new technologies.

Looking forward, many of the customer interaction point solutions will morph into suites, and then those suites will consolidate into broader core applications. While CX is arguably not yet an autonomous software market, it’s quite possible that the combination of soon to be realized software suites and new innovation designed to tackle this challenge may indeed create a new CX market. Maybe, but were not there yet.

So is CX a software market sector? There are certainly software tools and technologies marketed, sold and deployed under the CX moniker. However, at this point the tools are fragmented, delivered as point solutions and lack an enterprise-wide approach. But if the tools coalesce into enterprise suites directly aligned with CX strategy and capable of uniquely orchestrating the difficult goal of consistently delivering knowledge and content across channels, devices and customer touch points in a way that facilitates rewarding customer experiences, then and only then do I think we will see the next enterprise software sector. End

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In my discussions with Steve Kraus and Brian Callahan, senior CRM executives at Pega software, they point out a subtle but interesting change in terminology from their customers, noting that customers are now using the phrases “customer relationship management” and “managing relationships with customers” as two different topics; with the former CRM phrase being largely technology-oriented and the second being more process oriented and followed by a conversation about CX and customer-centric strategy.

 

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