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Gartner Blog Network
The cloud is NOT just someone else's computer
I recently wrote a Twitter thread about cloud risk and resilience that drew a lot of interest, so I figured I'd expand on it in a blog post. I've been thinking about cloud resilience a lot recently, given that clients have been asking about how they manage their risks. Inquiries about this historically come in waves, almost always triggered by incidents that raise awareness (unfortunately often because the customer has been directly impacted). A wave generally spans a multi-week period, causing waves to bleed into one another. Three distinct sets come to mind over the course of 2021: The Azure AD outages earlier this year had a huge impact on client thinking about concentration risks and critical service dependencies -- often more related to M365 than Azure, though (and exacerbated by the critical dependency that many organizations have on Teams during this pandemic). Azure AD is core to SSO for many organizations, making its resilience enormously impactful. These impacts are still very top of mind for many clients, months later. The Akamai outage (and other CDN outages with hidden dependencies) this summer raised application and infrastructure dependency awareness, and came as a shock to many customers, as Akamai has generally been seen as a bedrock of dependability. The near-daily IBM Cloud "Severity 1" outages over the last month have drawn selective client mentions, rather than a wave, but add to the broader pattern of cloud risk concerns. (To my knowledge, there has been no public communication from IBM regarding root cause of these issues. Notifications indicate the outages are multi-service and multi-regional, often impacting all Gen 2 multizone regions. Kubernetes may be something of a common factor, to guess from the impact scope.) Media amplification of outage awareness appears to have a lot to do with how seriously they're taken by customers -- or non-customers. Affecting stuff that's consumed by end-users -- i.e. office suites, consumer websites, etc. -- gets vastly more attention than things that are "just" a really bad day for enterprise ops people. And there's a negative halo effect -- i.e. if Provider X fails, it tends to raise worries about all their competitors too. But even good media explanations and excellent RCAs tend to be misunderstood by readers -- and even by smart IT people. This leads, in turn, to misunderstanding why cloud services fail and what the real risks are. I recently completed my writing on a note about HA and failover (DR) patterns in cloud IaaS and PaaS, with a light touch on application design patterns for resilience. However, concerns about cloud resilience applies just as much -- if not more so -- to SaaS, especially API SaaS, which creates complicated and deep webs of dependencies. You can buy T-shirts, stickers, and all manner of swag that says, "The cloud is just somebody else's computer." Cute slogan, but not true. Cloud services -- especially at massive scale -- are incredibly complex software systems. Complex software systems don't fail the way a "computer" fails. The cloud exemplifies the failure principles laid out by Richard Cook in his classic "How Complex Systems Fail". As humans, we are really bad at figuring out the risk of complex systems, especially because the good ones are heavily defended against failure. And we tend to over-index on rare but dramatic risks (a plane crash) versus more commonplace risks (a car crash). If you think about "my application hosted on AWS" as "well, it's just sitting on a server in an AWS data center rather than mine", then at some point in time, the nature of a failure is going to shock you, because you are wrong. Cloud services fail after all of the resiliency mechanisms have failed (or sometimes, gone wrong in ways that contribute to the failure). Cloud services tend to go boom because of one or more software bugs, likely combined with either a configuration error or some kind of human error (often related to the deployment process for new configs and software versions). They are only rarely related to a physical failure -- and generally the physical failure only became apparent to customers because the software intended to provide resilience against it failed in some fashion. Far too many customers still think about cloud failure as a simple, fundamentally physical thing. Servers fail, so we should use more than one. Data centers fail, so we should be able to DR into another. Etc. But that model is wrong for cloud and for the digital age. We want to strive for continuous availability and resilience (including graceful degradation and other ways to continue business functionality when the application fails). And we have to plan for individual services failures rather than total cloud failure (whether in an AZ, region, or globally). Such failures can be small-scale, and effectively merely "instability", rather than an "outage" -- and therefore demands apps that are resilient to service errors. So as cloud buyers, we have to think about our risks differently, and we need to architect and operate differently. But we also need to trust our providers -- and trust smartly. To that end, cloud providers need to support us with transparency, so we can make more informed decisions. Key elements of that include: Publicly-documented engineering service-level objectives (SLOs), which are usually distinct from the financially-backed SLAs. This is what cloud providers design to internally and measure themselves against, and knowing that helps inform our own designs and internal SLOs for our apps. Service architecture documentation that helps us understand the ways a service is and isn't resilient, so we can design accordingly. Documented service dependency maps, which allow us to see the chain of dependencies for each of the services we use, allowing us to think about if Service X is really the best fallback alternative if Service Y goes down, as well as inform our troubleshooting. Public status dashboards, clearly indicating the status of services, with solid historical data that allows us to see the track record of service operations. This helps with our troubleshooting and user communication. Public outage root-cause analysis (RCA), which allow us to understand why outages occurred, and receive a public pledge as to what will be done to prevent similar failures in the future. A historical archive of these is also a valuable resource. Change transparency that could help predict stability concerns. Because so many outages end up being related to new deployments / config changes, and the use of SRE principles, including error budgets, is pretty pervasive amongst cloud providers, there is often an interesting pattern to outages. Changes tend to freeze when the error budget is exceeded, leading to an on-and-off pattern of outages; instability can resume at intervals unpredictable to the customer. Mission-critical cloud applications are becoming commonplace -- both in the pervasive use of SaaS, along with widespread production use of IaaS and PaaS. It's past time to modernize thinking about cloud operations, cloud resilience, and cloud BC/DR. Cloud risk management needs to be about intelligent mitigation and not avoidance, as forward-thinking businesses are will not accept simply avoiding the cloud at this point. I am interested in your experiences with resilience as well as cloud instability and outages. Feel free to DM me on Twitter to chat about it.
22.09.2021 06:17
Comms Budget Benchmark Survey Helps Leaders Make Informed Decisions
Do you smell that? Maybe it’s pumpkin spice lattes, or maybe it’s fall planning season for Communications leaders! Around this time every year, I have conversations with heads of Communications about their strategies, budgets, org structures, and resource planning. One thing I always recommend is that they take Gartner’s Communications Budget Benchmark Survey (Gartner subscription required).  What is it? The Communications Budget Benchmark is an interactive, online tool based on data from Communications functions at organizations across the globe. The categories of metrics for comparison include: Budget metrics: Overall Communications budget, adjusted budget (to control for components that vary) and budget as a percentage of organizational revenue Staff metrics: Communications staff (overall and adjusted) and relative size of the function per 1,000 employees Activity responsibility: Number of discrete activities Communications owns, percentage of functions responsible for each type of activity and budget for those activities Expenditures breakdown: Labor, operational, and agencies/services budgets plus spend per employee and across Communications activities My clients have used this data to justify existing budget and staff size or make a case for increasing them. Many of my clients also like to understand what percentage of other Comms teams own various activities like PR or social media or how many FTEs perform each activity. This is especially helpful as they are rethinking their team’s org structure.  Not only do some of my clients complete this survey annually, but the survey has also proven to be especially valuable for Communications leaders who are new to role. The Budget Benchmark Survey, along with Gartner’s Communication Score (Gartner subscription required), gives new leaders actionable insights and data to assess their function and make strategic decisions.  Upgrades! We’ve also updated the platform to make the survey much easier to take and have added some exciting new features! You can complete the whole survey yourself or “phone a friend” by delegating a section through the platform for a colleague to complete. Additionally, you can save your data to easily adjust your numbers year after year for an updated report. Even more importantly, this is now a live benchmark, which is a massive upgrade to the benchmark survey. As more data comes in from other organizations, the benchmarks will update in real time -- so check back in a few months to see if the benchmarks have changed! As we build the benchmarks, you’ll also be able to do various cuts, such as by industry, using the interactive tool.  What's next? This year’s Gartner’s Annual CMO Spend Survey found that marketing budgets as a proportion of company revenue went from 11% in 2020 to 6.4% in 2021, which will clearly have a major impact on marketing operations. Will we see something similar for Communications? Take the Communications Budget Benchmark Survey to find out! 
22.09.2021 04:40
Social Reviewers Are More Likely To Seek Their Own Software At Work
As I mentioned before, one of the newer studies we conducted this year focused not on traditional B2B decision makers (or at least folks in roles we would expect to be decision makers--manager or higher), but on users (no manager or higher titles allowed).  The research points to the growing democratization of IT, and the distribution of power and influence that comes with it.   My colleagues who led the study, Craig Roth and Jeff Chamberlain, will be conducting a free webinar covering some of the results on September 27th at 11am EDT titled, 3 Ways Users Influence a Continuous Software Evaluation Cycle.  You can register here. Let me whet your appetite with a peek into some of the story. As we looked at this study, we worked to understand how workers might influence their peers and their networks, both directly and indirectly.  One of the ways we looked at that was to ask users if they have reviewed software they used at work on social channels.   Make no mistake, this was a small % of the users, but an influential group, as you will see.  Our study included almost 5,000 users. 14% of them had shared either a positive or negative review on social channels.  Of this group, 52% shared a positive review; 33% a negative review, and 15% shared both types. Where it gets interesting is when you look at the way these users obtained new software in the past 12 months.   This was a bit smaller portion of our overall group, with just over 4200 users obtaining new software for work in some way.   The options ranged from providing by IT, a variety of ways for them, or their team, to buy software, or leveraging free offers for vendors.  Here the story is quite clear as the figure below shows. [caption id="attachment_2888" align="aligncenter" width="899"] Source: Gartner, Inc.[/caption] The social reviewers are much more likely to pursue their own paths rather than wait for IT to provide them with the software they want and need. This is a message to vendors.  For those pursuing product-led growth strategies, clearly social users are a key target.  For those who have already been endorsed by IT, culling review sites for negative and positive reviews could provide a warning signal as you work to grow and retain business. The view I am sharing here looks at one factor.  One of the most interesting elements of our analysis of the data reveals a collection of user clusters that reveal patterns of behavior that can shape strategies for vendors that embrace the idea that users can be a critical part of their growth strategies--or a key risk factor. Jeff, Craig and others are working on much more insights to share with clients, but the webinar is a great way to learn more.   Again, if interested, you can register here. The democratization of IT is accelerating the shifts in B2B buyer behavior.  Old strategies may not work and new strategies are definitely needed.  This is just one way we are exploring these trends.  Continuing to dive deeper will be a focal point for our research in the coming months and in 2022.   It is important to understand and adapt.   If you haven't engaged with us, this webinar is an interesting starting point.
21.09.2021 14:49
Technology — Not Trucks — Drives the SCaaS of Amazon, Walmart, UPS
As I shared earlier this year in my blog post, “Supply Chain as a Service: Three Types and Three Opportunities,” companies are looking to exploit their assets and expertise to move beyond cost optimization and contribute directly to top-line revenue. Gartner’s Supply Chain Top 25 research shows that multiple companies across industries are working on supply chain as a service (SCaaS) initiatives. To recap, there are three types of SCaaS, all of which require technology to support development, deployment and scaling. Like trucks, planes and warehouses, technology is an asset. Walmart For some companies and industries, one or two types of SCaaS are potential opportunities. In the case of Walmart, the first two types — physical operational assets and business process services — are opportunities. Walmart Fulfillment Services is an example of the first two types. Beyond the fact that Walmart has a large network of physical fulfillment assets, including distribution centers, stores and trucks, it has significant supply chain business process expertise. Exploiting physical infrastructure and supply chain process expertise to deliver new sources of revenue requires a comprehensive portfolio of technologies within fulfillment operations and between Walmart and third-party sellers and, of course, the customer. Consider the complexities associated with order taking, order scheduling at fulfillment location, order picking and delivery required to support Walmart Fulfillment Services. Walmart’s GoLocal announcement on Aug. 24 is another example of SCaaS. GoLocal provides local delivery between sellers and customers using technologies to connect and match independent drivers to pick and deliver within a defined community such as cities and townships. Amazon One might argue that Amazon has been providing SCaaS for years, with increasing choices across first-party (1P) and third-party (3P) distribution models. As we describe in “Tool: A Guide to Selecting the Right Amazon Distribution Model,” a 1P relationship with Amazon is similar to a wholesale or distributor go-to-market and fulfillment model. The direct-to-consumer or end customer is handled by Amazon and cost associated with fulfilment is buried within the markup Amazon charges as it sets the selling price. Amazon’s 3P relationship with Fulfillment by Amazon (FBA), which launched in 2006, aligns with Gartner’s definition of SCaaS. The seller pays fees to Amazon for storage, pick, pack and shipping to the end customer. Looking beyond the obvious expansion of physical assets, including fulfillment centers, vans and planes, the key to Amazon’s SCaaS offering is technology and business process expertise. From its birth as a company, Amazon has had to build its own solutions in many parts of its business, including aspects of its fulfillment operations. For example, to keep costs low but also support customers’ needs, Amazon built order tracking and visibility into its platform. Existing solutions at the time were disintegrated and dependent on people. For example, direct-to-consumer retailers such as catalog retailers used call centers and customer service representatives to provide order and delivery status. Amazon continued its investments in technology and SCaaS since then, with a list too long to describe here. A recent example to illustrate is Amazon’s launch of Amazon Freight in 2019, which is a digital platform for matching shippers and carriers. Amazon Freight is another example of SCaaS specifically within the transportation space, in contrast to FBA, which includes warehousing and distribution services. Another example from 2019 are the Target Inventory Levels tools that Amazon built and deployed to the market. These tools provide better inventory visibility to third-party sellers. What about supply chain service providers? Supply chain service providers including wholesalers, distributors, parcel carriers, third-party logistics providers (3PLs) and even the supply chain consulting and business process outsourcing are not sitting idly by. Wholesalers and distributors across industries including high tech, manufacturing, life sciences and food service have offered SCaaS. One example is Cardinal Health’s OptiFreight Logistics, which provides a portfolio of “…services and capabilities to meet all of your logistics needs, including same-day courier solutions, regional parcel carrier relationships, mail consolidation capabilities, a shipment protection offering, pharmacy system integration and a multicarrier shipping hub.” For years, the 3PLs have been spending heavily to move their legacy systems running on outdated technology to modern cloud services. As far back as 2008, 3PLs were spending heavily on technology to reduce costs, improve service and power new offerings. For example, the case study that Gartner published in 2012, “Logistics Provider Ceva Leverages IT and Business Process Outsourcing to Transform Its Business” describes what Ceva did to modernize its technology platforms and capabilities. This month and presumably in response to Amazon and Walmart’s SCaaS, UPS on Sept. 10 announced its intention to acquire Roadie, a startup focused on same-day delivery leveraging — you guessed it — modern technology platforms and capabilities to match freelance delivery drivers with shippers needing to deliver to customers today. Based on these recent public announcements and our research and interactions with clients across industries, we anticipate more activity in the SCaaS space. Cost, revenue and sustainability objectives are the drivers, and technology is the enabler. Mike Dominy VP Analyst Gartner Supply Chain Michael.Dominy@gartner.com
21.09.2021 11:00
Sales Analytics Spotlight: Revenue Attribution
Note to reader: I’m starting a new blog series to spotlight specific topics related to sales analytics. The recurring (but occasional) series will use the title format “Sales Analytics Spotlight: <>.” If this blog type is relatively well-received, I’ll continue the concept. Enjoy. Revenue attribution is a generic concept of “attributing” or matching revenue streams to something specific.  Commonly, we hear about revenue attribution as a marketing concept where revenue links to marketing campaigns.  While this is a great use case, it’s only one example of revenue attribution. CSOs should work with their sales operations leaders to attribute revenue streams to specific categories to improve strategic planning.  The specificity allows for more detailed analyses that lead to diagnostic and predictive insights.  It also reveals issues and opportunities that might otherwise be masked if only looking at the macro-level. Three common categories for attribution are customer segment, product and sales motion. Customer Segment Traditionally, CSOs have been using customer segment analytics to prioritize investments and headcount.  If Segment A is growing faster than Segment B, it makes sense to nurture and support that growth.  Similarly, CSOs may detect segment-specific issues across win rates or growth.  Segment-specific issues may trigger a: Shift in segment-specific commercial messaging Review in competitive intelligence Assessment of sales force size and deployment Lately, customer segment analytics enable CSOs to sense demand and gauge the speed of recovery after the onset of COVID-19. Product Admittedly, product revenue attribution is quite common.  Across all commercial functions – sales, marketing, product, etc. – most leaders have an eye on product performance.  Despite that, many CSOs underutilize this analysis.  Product attribution is more than just the top-line performance.  CSOs should examine win rates, deal sizes and sales cycle times.  Win rates reveal insights on seller effectiveness.  To resolve effectiveness issues, CSOs should consider: Sales enablement programs Sales engineers to add product expertise If a given product tends to have smaller deal sizes or longer sales cycles, CSOs may need a more significant solution like developing a dedicated sales team.  Often, sellers avoid products with lower win rates, smaller deal sizes or longer cycles.  Sellers often say these products feel more like an opportunity cost than an opportunity. Sales Motion Annually, CSOs receive a revenue target and many analyze it for feasibility and strategic planning.  It’s incredibly helpful to use sales motion attribution during this analysis.  Common sales motions include: New sell – new customer acquisition Cross-sell – new offering in an existing customer account Up-sell – product or service upgrade Add-on – complementary offerings that are only sold as an attachment Resell (or renewal) – recurring or repeated revenue As CSOs analyze their goals, they will likely see areas of risk or concern.  Perhaps, they need to secure more revenue from new customers or improve resell or renewal rates.  These priorities influence: Sales coverage modeling – perhaps books of business need to expand or shrink Seller role design – many CSOs recognize hybrid sellers focus on existing account management at the detriment of hunting for new accounts. Sales force sizing – sizing and capacity analyses detect underperformance risks that may need remediation Unfortunately, a common pushback is that while revenue attribution is great in theory, the underlying systems and data don't support the analysis.  Progressive CSOs recognize that this isn't a self-correcting problem.  Therefore, they invest in resolving these issues. Finally, revenue attribution concepts can and should be used to analyze opportunity metrics.  This is what data-driven decision-making looks like.
21.09.2021 08:40
Organizational Change--A Must In Today's World
The U.S. has been going through a massive resignation wave. According to the U.S. Bureau of Labor Statistics, 4 million Americans quit their jobs in July of 2021 alone.  This means that managers of all kinds are trying to determine how to change their organizations in order to attract and retain talent. In addition to the talent management challenges that managers are facing, many infrastructure and operations leaders are trying to successfully leverage DevOps.  To achieve the change that I&O leaders require in order to optimize their DevOps-related approaches, it is important for them to consider a different path.  Instead of taking a top-down direction, they should consider and open-source change management plan.  The differences between the two are illustrated in Figure 1.   My colleague, Duncan Prosser, has outlined a plan to optimize DevOps through this approach to change management in the document, Use Open-Source Organizational Change Management to Drive DevOps Success.  If you are an I&O leader looking to make change happen in order to enjoy success with DevOps, then leveraging open-source change management can be an excellent way to go.  
20.09.2021 07:49
Marketing Ops Requires B2B Marketing Automation
With the publishing of Gartner's 2021 Magic Quadrant on B2B Marketing Automation platforms, marketing ops leaders must evaluate the vendor list. That way, marketing ops leaders can ensure effective, efficient and automated workflows and processes. Key Criteria for Vendor Evaluation for B2B Marketing Automation Platforms Some of the key criteria in evaluating the vendors included: Marketing and sales strategy Digital marketing campaign execution Multichannel marketing lead management Lead workflows Analytics and measurement Operations Integrations with other apps These areas align with running effective and efficient marketing ops for a B2B marketing organization. That's because marketing ops leaders are responsible for optimizing consistency across the marketing organization and ensuring collaboration with Sales leaders for customer acquisition and retention. And this is particularly true with more complex marketing and sales organizations in regulated industries. Those may include industries such as healthcare, higher education or financial services. Complex organizations may include global or multi-product organizations such as those found in retail or manufacturing industries. Ensure Sales Goals and Marketing Strategies Align Solid marketing and sales strategies include multichannel or integrated marketing campaigns and targeted content for prospective or customer audience segments. Content that resonates and clearly provides benefits and differentiation from a brand or product stand point. First and foremost, marketing ops leaders must ensure that digital marketing campaigns align to sales goals and marketing strategies. Otherwise, the rest is off-target. And that includes automated trigger campaign messaging, downloadable content such as B2B whitepapers or studies, or other easily-digestible content. Automation and Integrations Essential to Process Simplification So once the campaign and target strategy is established and agreed-upon, then the lead management and workflows require simplification. The process should not be overcomplex or complicated for anyone including the prospect, the marketer or the sales account executive. This is the true strength behind B2B marketing automation platform vendors for operations leaders. The other key strength of these vendors is the ability to easily integrate with other applications. And for the marketing ops leader, this could specifically include management platforms for marketing work, content marketing, marketing performance or digital assets. If it is difficult to make integrations like these work and to provide ultimate visibility into the campaigns, content and resources, then this could be problematic for effective and efficient marketing operations. Some platforms bring more of these resources and capabilities into one to make it easier to integrate. So if you are a marketing ops leader, then martech optimization is one of your key responsibilities. If your martech stack is missing capabilities or if your systems are too disparate and don't easily integrate, then it will be very difficult to achieve consistency and adoption. Marketing Ops Effectiveness Must Include Streamlined B2B Marketing Automation Marketing ops leaders must rely on an effective B2B marketing automation platform to help ensure efficiency, effectiveness and consistency. That's because it is a critical piece of the operational martech stack. As critical as marketing work or digital asset management platforms. Or as critical as a sales enablement platform. So do your homework to ensure that the B2B marketing automation platform that your company is using is the best one for your use case. Gartner research and advisory can help.   NOTE:  As of 9/20/21, this blog post has been published as a draft. Please check back within the next week for any updates, hyperlinks, additional resources, etc. 
20.09.2021 05:13
Explicit and Implicit Changes Drive Customer-Centric Culture
Many leaders try to change their corporate culture to be more customer-centric. In a recent poll of 57 CMOs, we asked the top five questions that are most urgent to bring success to the marketing department in 2022. Three of the top four answers require leaders to operationalize their customer experience (CX) data, values, and processes into their company's culture and employees’ daily jobs: How can bring the voice of the customer to cross-functional business decisions (e.g., new product development, innovation)? How can we ensure that brand and CX strategy are reflected in business operations? How do we build a consistent brand experience across audiences and channels? Changing culture is always a challenge. Efforts to create customer-centric change are undermined when leaders don’t implement both explicit and implicit expectations and rewards. Explicit Customer-Centric Culture Change Explicit expectations and rewards are the ones leaders communicate clearly and directly. Often, for example, leaders will share and promote the organization’s new CX values. Another explicit action many leaders use is to develop training programs to help employees understand CX processes and expectations. These efforts make clear the vision the leader has for the organization and its employees. These are a good start, but one of the explicit changes leaders often fail to make is to consider the way employees are recognized and rewarded. There’s an adage that employees do what they are paid to do, not what their bosses tell them to do. Simply put, setting new customer-centric expectations for employees while changing nothing of how they’re compensated or recognized undermines the effort. For example, training call-center employees to be more empathetic with customers often brings little change if those employees continue to be rewarded more for efficiency (call handle time, call volume) than customer-centric impact (the improved satisfaction, greater trust, and reduced effort that customer-centric care can deliver.) There has long been a debate in CX circles about the value and wisdom of compensating employees for CX outcomes. Explicitly tying bonuses or financial rewards to employee customer-centric performance requires care to mitigate challenges (such as ensuring employees cannot manipulate the results and making CX KPIs fair and accurate to each employee’s job.) But, even if your organization doesn’t tie direct financial rewards to employee CX contributions, there are still important ways to measure and reward employee performance in explicit ways. These include altering performance appraisals to consider examples of customer-centric behavior or creating recognition programs where employees can nominate each other for demonstrating customer-centric commitment. Implicit Customer-Centric Culture Change Often, leaders lean on explicit communications and rewards to create customer-centric change while being unaware of the implicit ways they may disincentivize customer-centric behaviors. If leaders aren’t cautious, they can send mixed signals, demanding customer-centric changes in straightforward ways while implying different values via their day-to-day decisions and actions. If you wish to influence a customer-centric revolution in your firm or team, you must consider: Have you listened to what gets in employees’ ways as they strive to achieve your explicit customer-centric goals? Asking employees to be more customer-centric without considering your organization's processes, policies, systems, and rules that prevent employees from providing a great CX is one way to disincentive customer-centric change. Another is to ignore sources of unnecessary employee effort that can lead to poor customer experience. In a recent Gartner study, we found that 66% of employees agree with the statement, “The easier it is for me to do my job, the easier it is to provide customers with an excellent experience.” Do you make all or most of your decisions based on short-term ROI? It won’t matter how much you exhort employees to deliver better experiences if your actions convey you care more about immediate financial outcomes such as increased sales or reduced costs. Consider how you evaluate, prioritize and approve ideas and projects. Do your criteria match your customer-centric goals? Or does your evaluation process penalize customer-centric ideas designed to provide what customers want, need, and expect while rewarding proposals that deliver company-centric financial gains? How do you speak about your business results? If you prioritize and focus only on financial outcomes and not customer impact, you implicitly convey to employees that is what you value. When I was at USAA, I once had a senior leader admonish me for providing a project update that began with the financial ROI before discussing the positive impact on the customer. “Lead with how we improved our member’s lives and relationships with USAA, then communicate how it impacted our top and bottom lines,” he told me. That statement says a lot about what he valued and, perhaps, explains a lot about what makes USAA so different, earning some of the highest NPS scores in its category. Ralph Waldo Emerson once said, “What you are stands over you the while, and thunders so that I cannot hear what you say to the contrary.” Over the years, that thought has been shortened into a pithy statement also attributed to Emerson: “What you do speaks so loudly that I cannot hear what you say.” The point he makes is that we don’t convey who we are and what we value with our explicit words but our implicit actions. For leaders, that means customer-centric culture change depends on what you do, not just what you say. The ways you implicitly encourage or dampen customer-centric behaviors can do more to affect your organizational culture than all the explicit expectations you communicate.  
20.09.2021 03:56
Modern Privacy Regulations Forge A New Path in the Middle East
Over the course of 7 short days in September of 2021 both the United Arab Emirates (UAE) and the Kingdom of Saudi Arabia (KSA) announced the introduction of modern privacy regulations. The decision from the twin wealth capitals of the Middle East represents a substantial change in regional data management regulation for thousands of companies, millions of residents and over one trillion dollars in GDP. Bahrain was the first in the region to announce (Law No. 30 of 2018) and subsequently adopt (August 2019) a set of modern privacy laws. The island nation provided organizations operating across the region a critical opportunity to put in place a privacy program and adapt to new requirements albeit on a smaller scale. Neither the UAE's data law (DL) nor KSA's personal data protection law (PDPL) is expected to rise to the complexity or detail of the EUs GDPR. Europe developed its data protection regime over the course of four decades starting with the OECD principles in the late 70s. How does this impact your business? Businesses will be expected to provide consumers with a set of privacy rights that fall into three categories: informative, corrective and restrictive. Informative rights, such as the right to access or portability, these rights require organizations to provide the individual with a copy of their personal data. Corrective rights, such as the right to rectification or erasure, these rights provide individuals with the opportunity to update their records or, at the extreme, delete them entirely. Restrictive rights, allow individuals to control how their data is used. This may be in the form of opting-out from the sale of their data or having their data shared with a third party. In addition to privacy rights, consent and preference management will become more regulated, this is expected to impact direct marketing in large part as organizations across the region have grown accustom to contacting consumers through purchased or shared lists with little or no explicit consent.   What should businesses do to prepare? Organizations should start with a data sanity exercise. Discover what information is held on customers and prospects, Only collect information needed for a defined purpose (data minimization), Identify whether the information was sourced direct from consumer or through a third party (data lineage), Associate the purpose for which the data was collected with its future use. (purpose limitation), Delete information that is no longer needed or required by law.   These initial steps will allow organizations to support consumer privacy rights and develop trust with their clients. At the time of publishing, details regarding fines and regulatory sanctions were not yet available. We expect that individuals will be able to easily raise complaints against offending businesses who will subsequently be investigated and potentially sanctioned by the relevant data protection authorities. For further details regarding the requirements and the tools available to develop a modern privacy program, please review the Market Guide for Consent and Preference Management and the Market Guide for Subject Rights Request Automation.
17.09.2021 13:43
Sales and Marketing Alignment in our new (Hybrid) Reality
This conversation about sales and marketing alignment has taken place in a bubble. I have ignored the fact that people may not be working full-time in offices again. Not for a while, but forever. And it may not be possible for the two functional leaders to get together. In person. To collaborate. So what does this look in our new new hybrid reality? The Changing Workplace The Gartner HR practice has been studying the changes to the workplace, especially with regard to collaboration, and identified four modes based on location and time (seen in the image below): Working Together, Together (colocated, synchronous work):  Collaboration traditionally happens in this setting. Everyone gets together in the same room to work on the same project. And HR leaders still consider this the most important and most productive environment for collaboration. It turns out they are wrong. Synchronous and asynchronous collaboration have a near equal impact on achieving high team innovation. Working Alone, Together (colocated, asynchronous work): Colleagues in the same office work on the same project, but do so in their own spaces and at their own pace. Working Together, Apart (distributed, synchronous work): This is the newest entry in the collaboration matrix, as colleagues spend time on the same video call, working on the same project. One-hour meetings have become the norm, but the half-day calls are exhausting. Working Alone, Apart (distributed, asynchronous work): A common means of collaboration with distributed or remote work forces. Or even situations that require after hours work. Current Environment for Collaboration So what does this mean for sales and marketing leaders who are pursuing alignment? They must get intentional about their plans. The virtual water cooler doesn't exist. Neither does the virtual hallway conversation. Intentionality has always been critical to sales and marketing alignment, but it is even more critical now. This is not something that will happen accidentally. How does it happen in each of the collaboration modes? Working Together, Together: Functional leaders and their teams can come together in the same time and place if most of the employees have returned to the office. Consider this option for ongoing alignment meetings in the future. Working Alone, Together: Again, this is based on a return to the office, which has not happened yet in many organizations. But it is also not the way to begin collaboration between the two leaders. Working Together, Apart: CSOs and CMOs need to focus on these intentional, group meetings to begin collaboration. One of the leaders should reach out to the other to start this collaboration. Once this initial meeting happens, consider a standing meeting with both respective teams to continue the sales and marketing collaboration. Once lead definitions and account lists have been established, continue meeting to review ongoing performance. I have seen teams where they alternate the reporting in each meeting with marketing one time and sales the next. Additional communications between meetings should occur on a dedicated channel on internal communication platforms such as Slack or MS Teams. Smaller issues get solved asynchronously while the bigger ones go on the agenda at the next standing meeting. Working Alone, Apart: This is only relevant for sales and marketing alignment if there is significant, focused work to be done by individuals. For example, retrieving and analyzing data to build an ideal customer profile would be a piece of this collaboration requiring solo work. Intentional Collaboration Drives Innovation And finally, I want to leave you with a data point showing the importance of intentionality. A survey of hybrid and remote workers found that teams using a high intentional collaboration approach are more than 2.6 times more likely to achieve high team innovation compared to teams with a low intentional collaboration approach. Sales and marketing alignment is an intentional form of collaboration, and both the alignment and the collaboration will be more important in the hybrid work reality.
17.09.2021 11:09
Take This Job And…
It’s been decades since Johnny Paycheck dropped his fiery anthem about being fed up with work, but lately it’s in fashion again. Among the COOs and CSCOs in our community, nearly all of them have shared the challenges they face, this year, when it comes to employee retention. If traditional office-based functions have it bad (~10-15% annualized turnover rates), then front-line roles are a nightmare (~80-140% annualized attrition rates, in some cases). It’s so extreme that the term “war for talent” is now commonplace. It’s also a large enough economic phenomenon to have a name: The Great Resignation or the Big Quit. Different surveys place the number of employees looking for a new job at somewhere between 40 and 65%. The more important question beyond the “what” and “how many” is “why.” Some point to the fact that these large percentages represent those who are “only looking.” They say this is not a Great Resignation, but a Great Reprioritization. Anecdotally, this sounds about right. People are rethinking the rhythms of their daily lives, how they want to spend their time and what they want out of their jobs and careers. And, at some point if there is significant misalignment … they will leave. A New Human Deal Gartner’s HR practice proclaims that we need to reinvent the Employee Value Proposition (EVP) as a new deal: The Human Deal (subscription required). One that recognizes the whole person and is designed to provide an exceptional life experience, with a focus on the feelings and features that match employee needs. These researchers recommend using the following framework to define an expanded set of employee needs that, when addressed, lead to higher rates of satisfaction (+15%), retention and performance. Deeper Connections: More than 60% of employees want their organization to understand and share in caring about both their family (68%) and their community (62%). While most organizations focus only on work connections, the best organizations build those deeper connections, while also respecting boundaries. Radical Flexibility: All employees, traditional office-based or front line, want more flexibility than their organization currently offers. While most organizations offer some flexibility in terms of when and where work gets done, the best organizations also offer flexibility around who employees work with, what they work on and how much they work. Our research shows a roughly 30% gap between how important employees consider these flexibility options and how often their employer offers them. Personal Growth: Most organizations offer employees opportunities to learn skills that will be useful to their job or make them more employable. But more than half of employees feel it’s important for their organization to provide opportunities for not only professional growth, but also personal growth. Holistic Well-Being: Delivering holistic well-being is more important than ever, as the boundaries between work and all other aspects of life have become blurred. But while HR organizations are offering resources that promote physical (80%), financial (67%) and emotional (87%) well-being, few employees (nearly 50% less than the average offer rate) are actually using those benefits, so education and incentives are important. Shared Purpose: Fifty-three percent of employees want their organization to act on issues they care about — beyond simply making a statement. But in acting on a shared purpose, organizations face tension between activism and representing all perspectives. During our July Leaders Forum Event, I asked Cisco CEO Chuck Robbins how he and his company decide what environmental and social issues to publicly weigh in on. Their solution is a decision matrix to determine when to take a formal position. This cuts through the politics to focus on those issues benefiting humanity and addressing employees’ desire for the company to take a stand. From the perspective of someone evaluating a new company and role, this expanded EVP feels a bit like Maslow’s Hierarchy of Needs. More basic needs like compensation and other core benefits fall toward the bottom. Psychological needs such as esteem and belonging equate to deeper connection and opportunities for personal growth through expanded roles. Holistic well-being, or feeling cared for as a whole person, also fits into this middle layer. Radical flexibility relates to more control over all the ways the work gets done. When paired with shared purpose, this represents the self-actualization pinnacle of the hierarchy. An Opportunity to Differentiate A final thought as you consider what your new EVP will look like. Not everyone is offering this new, expanded proposition. Not even close. Our latest research shows that well under half of enterprises address these middle and top of the hierarchy types of needs. For front-line roles — currently, our most challenging positions for retention — these benefits are offered even less often. While significant changes may be required to bring your EVP in line with the most compelling offer in the marketplace, if played right, you might just be exclaiming, “Take this job and love it!” to your new recruits. Stan Aronow VP Distinguished Advisor Gartner Supply Chain Stan.Aronow@gartner.com
17.09.2021 10:00
Your Gartner's 7th Annual Chief Data Officer Survey Needs You!
Gartner's 7th Annual Chief Data Officer Survey is OPEN.  Here is your chance to play a role in shaping the future and being a good citizen at the same time.  Why not join in and share your experiences?  Here are the various links to engage with us: LinkedIn or LinkedIn: Gartner pages Twitter And if you want to go to the survey proper, this this link.
17.09.2021 03:19
Socially Responsible Product Manager's Manifesto
In our recent Maverick* Research: How Product Management Drives the Demise of Digital Giants in Three Acts [paywalled], Barika Pace and I envision a future where the digital economy has collapsed like King Ozymandias and his once invincible kingdom. It's a story of how the vicious cycle of filter bubbles, bias and and polarization — owing to certain Big Tech constituents' addiction to hyperengagement and excessive personalization — puts the digital economy's network effects in reverse and causes an almighty global mess. If you allow another gratuitous literature reference for further synopsis, in our story the self-indulgent Atlas doesn't shrug, but rather shoots itself first in the foot and then drops the ball. I concede that we had a lot of fun drafting it. For those who are not familiar with it, the Maverick program is where we Gartner analysts publish our more unconventional insights and positions, unconstrained by our usual, consensus-driven trademark research process. First and foremost, they are meant to provoke new thinking and fresh perspectives among our clients. Over time, many of such ideas often find their way into our mainstream research — or "the Borg", as you may sometimes hear it being affectionately referred to. What Barika and I put forward as the way out of the looming collapse is socially responsible product management. The way we see it, today's tech industry is shaped by several ingrained bad practices that it should finally start growing out of. The infantile Move Fast and Break Things mindset needs its own grown-up Pottery Barn rule: If It's Not Yours and You Break It, You Fix It. That growth will start happening when enough people who hold influence over how tech products are built and managed start questioning the infallibility of the industry's established belief system. Think of tenets such as customer experience, strategic laser focus, and data-driven decision making. Taken to extremes, all those can have extremely harmful social and societal consequences. If a product organization makes no concrete effort to mitigate, or even understand, such consequences then its approach to product management cannot be considered socially responsible. We want to see fewer of those organizations. To illustrate the sort of mental shift that we are calling for, see our ten-point Socially Responsible Product Manager's Manifesto and its accompanying juxtapositions: Digital products disintegrate without digital ethics. Build a lasting foundation for your product by incorporating digital ethics into your code of conduct — rather than leaving them open for individual interpretation. Not all product engagement is constructive and desirable. Break the chain of hyperengagement by treating your users as humans to be respected — rather than subjects to be endlessly nudged and manipulated. Your insights are only as good as the representativeness of your data. Ensure that the data you rely on reflects the full demographics of your market by critically reviewing its representation — rather than assuming that what you see is always what you get. Market impact is not the only kind of impact your product may have. Protect society from your product’s negative externalities by conducting a societal impact assessment — rather than hiding behind the dogma of customer centricity. Assessments count for nothing without meaningful action. Determine how your product can contribute to the corporate values by following through on the impact assessment and making the necessary trade-offs — rather than reverting to purpose-washing. Diversity in decision making is an antidote to unforeseen consequences. Future-proof your decisions by building diverse, equitable and inclusive product teams — rather than echo chambers of group thinking and management speak. Diversity, equity and inclusion are undermined by enormous systemic barriers. Drive systemic change in the demographics of your company and your profession by hiring for skills, potential and drive — rather than for signaling effect, social capital and cultural fit. Everybody follows and acts on incentives. Empower your product teams to behave ethically by rewarding them for doing the most positively impactful thing — rather than for doing merely the most productive or innovative thing. Attitudes and practices — good and bad — spread between organizations. Set an example for your partners and competitors by advocating more socially responsible and ethical product management — rather than parroting conformist orthodoxies. There are things bigger than your company, your product and your job. Be the last line of defense for socially responsible product management by challenging objectives that compromise it and quitting if all else fails — rather than defaulting to your careerist mode. For the lack of a better term, that is still an MVP. We hope to engage with well-informed and well-intended individuals in the profession to develop it further. Join the fight.
16.09.2021 11:53
Maximize Marketing Automation Investments Before Buying an ABM Platform
B2B marketing leaders must answer a wide range of questions when rolling out and scaling account-based marketing (ABM) programs. One key question marketers inevitably ask during ABM adoption is “what technologies do we need to meet and exceed our program objectives?” Marketing Automation Platforms Support ABM Before considering new tools to add to your tech stack, you should look to optimize usage of existing technologies. Specifically, marketers should look to their current marketing automation platform. Across the last few years, marketing automation vendors have developed capabilities designed to support ABM use cases. Examples of such capabilities include support for: Identifying high-priority accounts using first-party intent data and machine learning Offering a subset of accounts a differentiated demand generation experience Orchestrating multichannel campaigns for ABM accounts Measuring engagement with ABM campaigns Measuring account-level and account stakeholder-level engagement Before investing in any new technology, you should exhaustively explore the potential of your marketing automation platform to execute your ABM program. This step is especially important given that B2B marketers estimate they only use 56% of their current tech stack’s full breadth of capabilities, according to Gartner’s 2020 Marketing Technology Survey. ABM Platforms Enable Scale Despite the strides made by marketing automation platform providers in support of ABM use cases, in many instances, they will not offer sufficient support for scaling ABM programs. Marketing leaders who have already completed a successful ABM pilot and are scaling ABM to a large number of accounts (i.e. 100+) should give serious consideration to purchasing an ABM platform. For those unfamiliar with this type of technology, ABM platforms offer capabilities that enable marketers to run ABM programs at scale. This includes support for account selection, planning, engagement and reporting. Features include: Audience management capabilities to ingest first-party and third-party data from multiple sources Data-driven and AI-driven scoring models to select accounts Contact and lead-to-account matching to help with planning Capabilities to support cross-channel customer engagement 6sense, Demandbase and Terminus are just a few of the vendors in this category. For further information on ABM platform capabilities and representative vendors, see Gartner’s Market Guide for Account-Based Marketing Platforms (subscription required). Refer to the decision tree below for prescriptive guidance on determining when you’re ready to expand beyond your marketing automation platform and evaluate an ABM platform: You shouldn’t feel the need to ditch your marketing automation platform after acquiring an ABM platform. You can combine the capabilities offered by both solutions to supercharge your ABM program. As an example, you could use your marketing automation platform to gather a list of contacts who registered for one of your webinars. You could then pass that list of contacts to your ABM platform. There, you might use the platform’s third-party intent data to uncover engagement from additional stakeholders within a contact’s account. You could also use your ABM platform to run an advertising campaign targeting both the webinar contacts and additional account stakeholders. Then you could use marketing automation to run a personalized email campaign to continue to nurture those contacts. Looking into to the Future While marketing automation solutions and ABM platforms each offer unique sources of value, they increasingly offer some overlapping capabilities. Looking into the future, it's possible that ABM platforms remain a niche solution. However, we can project more likely scenarios that drive future convergence. For instance, ABM platform vendors could build or buy additional capabilities to compete more directly with marketing automation. At the same time, marketing automation vendors could continue to build or buy capabilities in support of ABM, decreasing the need for ABM platforms. We likely haven’t yet reached a point where marketers need to make a 'one or the other' decision. However, you can prepare for future convergence by maintaining an up-to-date, vendor-agnostic outline of your desired demand generation outcomes and the necessary supporting capabilities. This outline can serve as your ‘north star’ to guide technology decisions, even as the landscape shifts.
16.09.2021 10:13
How much carbon does my Data Center produce?
Sustainability is now becoming one of the most talked about themes at the board level, with taxation penalising Green House Gas (GHG) emissions in some countries around the world and a potential for it to be rolled out to others over the next few years. The Intergovernmental Panel on Climate Change (IPCC) released a “Code Red for humanity” report on the 9th August 2021, further bringing attention to the impact of GHGs on the Earth.In The Road to a Net Zero Data Center note, we discussed the steps that can be taken by I&O leaders to address the potential impact of GHG emissions on their DCs, but how do you calculate the amount of GHG emissions you are responsible for? Let’s remind ourselves of the emissions terminology:Scope Description1 Direct emissions from diesel generators or similar on-site generation capacity.Some refrigerants.2 Emissions from grid electricity generation used for data center operation, including air conditioning and power distribution.3 Manufacturing and supply chain emissions associated with data center equipment and services (including cloud and colocation maintenance), as well as end-of-life disposal.Packaging.DC operators should be aware of all 3 scopes as they are relevant to calculating the carbon impact of your DC operation, although the biggest impact comes from Scope 2 and 3 emissions.To address the carbon footprint, the table below gives a guide to the carbon footprint of each electrical supply.Scope Energy Source Carbon emission Note1 Diesel Generator 9.2 Kg per Kw/hr Monthly generator checks contribute this much CO2 into the atmosphere assuming 2 litres of diesel is consumed2 Coal Fired Power station supply 1Kg of CO2 per Kw/hr Source: US Energy Information Administration2 Gas Fired Power station supply 0.4Kg of CO2 per Kw/hr Source: US Energy Information Administration2 Solar, Wind and Nuclear Negligible (Operation of power generation. There will be associated carbon footprints through production techniquesNo real figures exist for calculating scope 3 emissions as these carry a large number of variables. Expect some work to be done on this in the future.The next factor in considering carbon production is working out your DC’s PUE – In real time if possible. Old DCs can have a PUE score of between 1.6 and 2, with more modern DCs scoring 1.15 and 1.2. The lower the PUE rate, the more efficient the DC, the lower the carbon footprint.Action point 1Verify your energy supply comes from nuclear or renewable source to minimise your carbon footprintAction Point 2Minimise you use of diesel generators where possible to reduce CO2 emissionsAction Point 3Improve your DC efficiency by investing in free cooling or operating at a higher temperature (within manufacturer’s recommended tolerances). Ensure your PUE calculation is a regular exercise, ideally real time, to get the best picture of your DC efficiency.We cover the sustainability aspect of the cloud providers in the note already referenced. Gartner is on hand to discuss these and further courses of action to meet your organizations ESG goals.
16.09.2021 05:30
Hype Cycle for Supply Chain Strategy 2021
The Hype Cycle for Supply Chain Strategy has turned 6 this year. Since its inception, its main charter has been to educate and inform CSCOs and supply chain strategy leaders on the top supply chain capabilities that are critical to both continuous improvement and innovation. We track each of these capabilities along their life cycle, starting with an Innovation Trigger, a major event or breakthrough that generates industry interest. Invariably the capability goes through a period of hype where it can’t live up to unrealistic expectation of impact. This often leads to the Trough Of Disillusionment where organizations question the capability’s value. For some capabilities they survive this disillusionment and emerge as a core competency, becoming productive and consistently delivering supply chain value. Entering and Retiring Capabilities This year, we have added two new capabilities — Supply Chain Resilience and Diversity, Equity and Inclusion (DEI) — both driven to the forefront by current macro trends. The pandemic has underscored the need for supply chain resilience. 70% of supply chain leaders report that they have been constantly responding to disruptions since 2019. During the same period, those organizations have not had enough time to recover from high-impact, regional or global disruptions before another high-impact risk event has disrupted their supply chains. While being able to manage risk is important, building resilience allows organizations to altogether avoid or better absorb the business impact of major disruptions through a risk-balanced approach to product design, supply chain strategy and network design. DEI is a critical capability for supply chains. Diverse, inclusive and equitable organizations and teams are positively correlated with superior business outcomes, including innovation, resilience and profitability. They’re correlated with improvements in human capital indicators as well — for example, the time to fill an open position, employee engagement, discretionary effort and intent to stay. Supply chain university graduates of all backgrounds report that they want to work for diverse, inclusive organizations. We retired four capabilities that have become commoditized — undifferentiating to supply chain organizations. These are Descriptive Analytics, Diagnostic Analytics, Internet of Things and Natural Language Generation. Descriptive Analytics and Diagnostic Analytics — foundational analytics to track supply chain performance — have become embedded in other frameworks like Supply Chain Control Tower and Metrics. Internet of Things became a commodity that the head of supply chain strategy would not develop as a specific IoT strategy but instead would rely on specialists in operational technology to determine the best approach to leveraging IoT for supply chain insights. Natural Language Generation (NLG) automatically creates linguistically rich description of insights found in data. We have retired NLG as we have observed that supply chain strategy leaders do not pursue this functionally independently. Instead, the functionality would be offered in other capabilities like artificial intelligence (AI) or reporting. A quick scan of the Hype Cycle shows a cluster of capabilities around the peak. This is not inherently good or bad. Rather, it is an indication of how active the supply chain discipline is currently. New technologies — blockchain, new frameworks like DEI and immersive experience promise to be very impactful to supply chains. However, many of them have yet to mature and demonstrate a staying power. For those reasons, supply chain strategy leaders should look to pilot those capabilities, to understand not only the potential, but the challenges that their organization will face in adopting them. For example, AI is currently in the first phase of maturity: Innovation Trigger. AI applies advanced analysis and logic-based techniques, including machine learning (ML), to interpret events, support and automate decisions, and take actions. Both CEOs and CSCOs view AI as a transformative technology to their organization. Given its transformation benefits, supply chain organizations should actively seek to understand the potential and fit of AI through education and experimenting in small-scale pilots. However, they are advised to avoid potentially large AI projects or technology investments. First, they need to access organizational readiness, data and talent availability, and the role of AI in supporting supply chain and business priorities. There’s a cluster of capabilities around the Trough of Disillusionment, including capabilities like Predictive Analytics, and Supply Chain Risk Management. Supply chain strategy leaders — especially in this volatile economy — are advised to reexamine these capabilities, their true potential and the challenges that have prevented their broad and successful adoption. Predictive Analytics is one example. Predictive Analytics have been deployed in supply chains for dozens of years. Yet many organizations still struggle to point to demonstrable ROI. Adoption is challenged by poor data quality and cultural resistance. Currently, we see leading organizations revisiting their previous efforts, looking to reduce some of the hurdles by adopting complementary techniques like ML to improve data quality or data literacy to improve cultural readiness. As a supply chain strategy leader, use the Hype Cycle as a visual check that your supply chain organization’s current portfolio of projects and initiatives supports your bimodal strategy: having two parallel operating models that support continuous improvement and innovation. The portfolio should include capabilities on the right that are stable and more mature and can incrementally improve your supply chain performance. Capabilities on the left are emerging competencies that might present higher adoption risk, but also promise higher returns. For those, limited pilots and staged adoption is the most effective approach. For the past six years, as the lead author of the Hype Cycle, I have had the privilege of working with more than a dozen of my colleagues, distilling their deep domain knowledge in a wide array of supply chain topics. The goal is to provide our busy supply chain executive clients with a one-stop scan of key capabilities. Gartner clients can reach out to us to further discuss any of these topics. Noha Tohamy Distinguished VP Analyst Gartner Supply Chain Noha.Tohamy@gartner.com
14.09.2021 11:00
What Makes a Good Product Manager?
Applications and software engineering leaders often struggle to select and support Product managers effectively.    Start by focusing on the 10 key characteristics with their mindsets and values, and look out for these negative behaviors.  Then continue to ensure their success with coaching and communication with business stakeholders   Quick Answer: What Makes a Good Product Manager? Published: 08 September 2021 ID: G00748976 Analyst(s): Deacon D.K Wan , Wan Fui Chan   Focus on the 10 key characteristics with their mindsets and values, and look out for these negative behaviors.
14.09.2021 10:08
Federal Reserve Bank Panel on Digital Currencies; Opportunities & Risks
Digital currencies are going to change every aspect of how we transact and do business with each other over the next five years. 81 countries are already experimenting or implementing central bank digital currencies (CBDC) representing 90% of global GDP. (See Atlantic Council ) China reportedly has already disbursed over $5.3 Billion of its new Digital Yuan, as of June 2021. See Markets Insider. Meanwhile, regulators across the globe are struggling over how to safeguard consumer adoption of cryptocurrencies and stablecoins, while holdings and trading in these currencies grow exponentially. (Assets locked on DeFi are still a fraction of the worlds financial assets, or under $100 Billion compared to some $316 Trillion). I’m super excited and honored to be moderating a panel on this subject for the Federal Reserve Bank of Chicago on September 29th.  You can register here: Chicago Payments Symposium 2021 I am joined by premier practitioners and experts in this area. These include representatives of Central Banks with firsthand CBDC experience (Bahamas, Sweden) and from the U.S. which is closely examining the feasibility of a Digital Dollar.  Also on our panel is the Chief Strategy Officer of Circle  which supports USDC, the fully reserved US dollar stablecoin. Our panelists include: Jim Cunha, Senior Vice President, Federal Reserve Bank of Boston Cleopatra Davis, Banking Manager, Central Bank of Bahamas Mithra Sundberg, Head of E-Krona, Riksbank Dante Disparte, Chief Strategy Officer & Head of Global Policy, Circle We have lots to discuss (time permitting) in each of these areas: Key Differentiators of Digital Currencies (i.e. CBDCs, Stablecoins, Cryptocurrencies) Major Digital Currency Initiatives Top Use Cases View from Central Banks (CBDCs) Technology and Partnerships Regulations Staying informed on digital currencies is important, as the implications to our economy, populations and way of life are far-reaching. Dialogue is critical as we collectively explore these new frontiers and opportunities. Thank-you to the Federal Reserve for sponsoring this discussion.
14.09.2021 06:44
10 Strategies to Lead Sales Through Supply Chain Issues
Have you ever heard a sales leader say, “no inventory, no problem”?  Of course not.  Selling requires inventory.  Yet, this is a significant challenge that many sales leaders face.  Admittedly, the solution to not having inventory is to have inventory.  Let’s assume that is being pursued or not in the sales leader’s span of control.  Everything else is either a coping mechanism or an alternative tactic to make the best of a difficult situation.  Here are ten strategies that sales leaders should consider during periods of low inventory or fulfillment issues: 1 – Monitor At-Risk Customers Sales leaders must continually monitor the health of customer relationships.  In a 2020 Gartner survey, only 42% of sales leaders indicated that they had such a program in place.  These programs serve as leading indicators of retention problems and will inform customer fulfillment priorities. 2– Prioritize Strategic Customers for Fulfillment Without violating contractual obligations, sales leaders should stratify customers that require fulfillment.  Even a simple ranking of critical, high, medium, and low helps the supply chain and delivery team focus inventory and attention strategically.  Sellers will appreciate this work as they’ll be able to reduce the uncertainty within customer communications. 3 – Help Sellers Handle Difficult Questions and Messaging Frontline managers should inventory and share with sales leaders an assessment of recurring issues and questions.  Leaders can then centralize a response team to quickly provide critical messaging.  These messages must: Empathize with the customer Set expectations on fulfillment Reinforce the company’s value proposition Where possible, sales leaders may be able to introduce or offer alternative and flexible arrangements (with the support of legal and finance). 4 – Improve Pipeline and Opportunity Management While many sellers may feel otherwise, they must avoid developing a victim mindset or rely on self-serving tactics.  Sales leaders must ensure that sellers operate with greater transparency and accuracy for all opportunities in the pipeline.  Sometimes, enterprising sellers may push deals forward in the pipeline in an attempt to secure inventory.  These tactics backfire.  The supply chain must trust what they see in the pipeline. 5 – Revise Forecasting Methodologies Sales leaders, working with their management team and sales operations, may need to revisit forecasting methodologies and develop leading indicators of demand.  Pre-pandemic, forecasting wasn’t seen as a strength.  Less than 50% of sales leaders indicated they had high confidence in sales forecasting accuracy.  During these times, the uncertainty is more profound.  Sales leaders must focus on shorter time horizons and examine patterns by customer segments. 6 – Shift Sales Development to Available Products and Services For organizations that have a well-built sales development program, lead generation efforts must refocus on products and services that can be fulfilled.  Related to the forecasting revisions, once inventory and demand increase, sales development can slowly begin to ramp up to previous levels. 7 – Delay Filling Open Sales Headcount Recently, I published a blog on The Greatest Sales Risk is the Great Resignation.  Undoubtedly, many sales leaders are facing issues with sellers leaving and open headcount.  Depending on the severity and duration of inventory issues, sales leaders may want to strategically stage hiring to help control demand and avoid frustrating new sellers. 8 – Redeploy Seller Capacity Sellers, especially those focused on products with inventory issues, may have excess capacity that would have otherwise been focused on business development.  Understandably, most sales leaders work to avoid layoffs and furloughs.  However, these leaders must recognize that some sellers may have extra capacity to work on internal projects, content building, data hygiene efforts, etc.  Certainly, sellers should be selling but without inventory, it makes sense to redirect idle resources. 9 – Switch Compensation Metrics or Offer Quota Reductions Most sales leaders recognize that revenue-based commissions are heavily linked to order fulfillment.  No inventory translates to delayed commissions.  During this “great resignation,” disengaged sellers will exacerbate attrition issues.  Sales leaders must work with finance, HR and sales operations to either: Reduce sales quotas to reflect the inventory issues Establish draws or guarantees to help seller cashflow Replace revenue-based incentives with commitment-based alternatives 10 – Develop Scenario Planning While always a good practice, scenario planning during times of uncertainty is a must.  What if inventory replenishes too slowly?  What if the business environment changes?  Sales leaders must avoid being reactive.  They should: Define their risks and issues Understand causal relationships Model scenarios along with their impacts Connect scenario planning to decision making Sales leaders cannot sit idle and solely react to inventory issues.  They must get ahead of the issues by using these 10 strategies and tactics to resiliently cope with internal issues to sustain their commercial activities and function.
14.09.2021 04:17
The Achilles Heel of Larger Organizations
In the technology industry, large companies have an unfair advantage.  With much of the market composed of risk averse, cautious companies, the big choice is often viewed as the safe choice. That doesn't mean smaller companies can't win.  They just need to focus on the right opportunities with a differentiated approach to breakthrough.  It happens a lot.  But there are also lots of misses.  And in those misses, the large orgs strengthen their position. But, I believe that most large organizations have a point of weakness that can be attacked.  Success here may not be a truly devasting blow for the larger organization, but it can be a significant win for the smaller company. That point of weakness.   Organizational silliness.  (Note: There is probably a better name for it, but this is what I prefer to call it). Organizational silliness occurs when a company grows large enough to have multiple divisions--that have their own targets.   Often times, these divisions serve the same set of customers--sometimes with similar solutions and capabilities.   Or, they have very complementary capabilities that together would deliver more value for those customers. [caption id="attachment_2883" align="aligncenter" width="888"] Source: Photo by Sandro Schuh on Unsplash[/caption] But that is where things break down.   While seeming to have a powerful complete solution, internally it doesn't work that way.  The divisions don't talk.  There are different sales teams.   Leaders spend time trying to figure out how to constrain the other division from taking budget from "their customers."   Divisions worry about other divisions cannibalizing their revenues.  Opportunities are not pursued because of concerns of "bad behavior" in the other group.  And the list could go on and on. There are lots of reasons brought up for these issues.  Scale. Focus. Revenue Preservation.  You name it. The biggest loser in these situations is the customer.   They end up with less potential value than they would like and an awkward relationship that doesn't make sense to them. This contributes to the next big loser--the large org.   Even as they (often) continue to grow, they are underperforming potential and damaging customer relationships. The winners--smaller organizations that recognize these situations and go on the offensive.   They go to these customers and highlight the silliness they are forced to endure in their large vendor relationships.  They look for specific solution gaps caused by the silliness and focus their energies there.  Done right, they create a defendable, growing space in the market. How can you spot the silliness?  Work to understand the organizational structures and divisions of your larger competitors.   Determine if they have an integrated sales force or if they have more distinct teams.    Then look at the things you are worried about competitively from them to see if the aren't as strong as you imagined, given the silliness. Use that to create a better, less frustrating option for your customers.   That's not silly.  That's good business.
14.09.2021 03:16
BEVs: Won Battle or a Race Against Time?
We are seeing the spectacular sales growth of BEVs (battery electric vehicles - no combustion engine) and PHEVs (plug-in hybrid electric vehicles) in Europe, followed by a similar boom in China that started some years back. EVs are selling not because consumers finally embraced sustainability as a religion, but because manufacturers are threatened with massive fines if they don't sell enough of these. Tax breaks and financial incentives are an extra sweetener that helps convincing a growing number of consumers. EV advocates were quick to sing victory and declare ICE as dead. As the EU and the UK set a clear date for the end of ICE (internal combustion engine) sales, all seems like a done deal. However, this may be a major oversight. The EV value proposition (talking BEVs) is still far from enchanting the vast majority of Europeans. This must not be ignored by government and industry - doing so will bring deceit to consumers, which may end in a public backlash. If EVs haven't won the almost entirety of consumers by 2030 (UK) or 2035 (EU), this may push the deadline for ICEs by several years until, hopefully one day, governments and industry get things right. Alternatively, if governments insist on those deadlines, it may drive passenger car sales dramatically. For instance, Renault - despite being a top EV seller - is seeking to extend EU's ICE ban which is indicative. As such, effectively, we are now in a race against time to make BEVs work for the vast majority of car buyers. It all starts by understanding human behavior BEVs will only prevail if they adapt to the way how car buyers think and their lifestyle: Modern society is about impatience - we want everything to be ASAP. Therefore, most consumers (EV partisans excluded) are not willing to wait hours for their car to charge unless this coincides with another activity of great value to their routine. The vast majority of buyers chooses a car that is way above their real needs - considering most of the time cars drive with one person and in daily short distances, then a microcar would be ideal for most - but car sales reflect exactly the opposite. For exactly the same reason, don't be surprised if most consumers say 400km of range is not enough - their reference will always be what they know today from ICEs. Cost matters a lot - and financial aids won't last forever. Trying to educate consumers or forcing them to do something is futile. If the technology does not adapt to their needs, then it can't succeed. Let's now look at the different areas that must be tackled for EVs to win over the vast majority of our society. Charging network It's clear for most there is still a huge shortage of chargers - and yes, even for those that drive just 20 km per day, simply because one day they will drive more than that and fear what will happen. Several chargers have a tendency to be down (as VW's CEO recently expressed in a rant). Also user discipline is low, with many simply hogging chargers or ICE drivers simply blocking charger car parks. This means not only many more chargers are needed, but also mechanisms must be created to ensure a fair use of those.  Then comes location. We are not short of examples of companies or even governments taking action to put chargers in places that don't matter whatsoever. Chargers need to be available in places that are compatible with people's routine - this means places where they regularly need to spend a fair amount of time as part of their routine. This means: Creating broad charger availability at home, workplace and retail, with some charging capability in road corridors for long-distance driving. Developing legislation and infrastructure so that every single car that spends the night in the street can be charged with minimal fuss (82% of US population lives in cities, 75% in the case of EU). Enabling a vast number of chargers at workplaces as 7-8 hours of work give a lot of time to top up the battery. And the weekly shopping run represents half hour to two hours that can charge a big part of the battery by using fast charge. The cost equation Even with all regulatory and financial support given to EVs in Europe, this is still a car for the affluent. Never mind that on average an EV is 41% more expensive than an ICE even after incentives (September 2021, EU, source: JATO). There is also a clear geographic divide between rich and poor countries, with those of central and northern Europe showing reasonably higher EV penetration than south and east. Besides, if you are not rich enough to have a house with your own parking spot and charger, then this will significantly affect your EV's TCO - using a public charger can be a very expensive proposition, especially a fast charger.  For instance, the electricity price/km for a Tesla Model 3 SR+ (when charged at Innogy Germany) is 44% higher than the diesel price/km for a BMW 320d (also in Germany) - using WLTP consumption figures. The comparison uses fast charging as this is fairest given the very low time it takes to refuel a diesel car.  EV maintenance also presents some cost challenges. Even that EVs require less maintenance interventions than ICEs, battery durability is still a concern. For instance, as VW publicly claims the durability of its EV battery to be 350,000km, the truth is that a reliable ICE can last a lot longer without changing engine and gearbox. Even if EVs are covered by longer warranties, EV owners replacing a battery outside warranty stand to pay a hefty bill. For entry-level EVs, the invoice could be above the car's residual value. EV drivers making frequent use of fast charging will see their battery life shrink even faster. Even if this doesn't mean all EV batteries will last only 350,000 km, the truth is that an inferior durability comparatively to an ICE is a caveat for many vehicle owners. To make matters worse, how long will governments be able to sustain EV subsidies and tax breaks is the key question - especially given the massive burden COVID-19 has been to the public budget. European governments make a substantial revenue from fuel taxation and road tax - it would be naïve to think EVs will remain impervious to taxation for a lot longer. Recommendations: EVs' cost reduction roadmap needs to be more aggressive - cost is paramount and this is a race against time until incentives and tax breaks disappear. Besides scale and transition to EV-specific platforms, the design of EVs needs to be simplified and the level of manufacturing automation needs to be upscaled.  Public charging prices need to be made lower in order to attract less affluent car buyers. Regulation may be needed to ensure that. OEMs need to make efforts to further improve battery durability. Given that EVs are still at their infancy, consumers are unaware of this problem. However, it will take just some years until the issue becomes common knowledge and an obstacle to EV purchase. Driving range is still a problem Let's start by saying EV driving range has been clearly improving in the top segments - with Lucid Air, Tesla Model S Plaid and Mercedes EQS being good examples of that. Sadly, these cars are beyond the majority's purchasing power. As on paper most EVs don't evidence a great range compared to ICEs, reality is even worse as their real-world energy consumption is very influenced by particular factors like low temperature and motorway speeds. For instance, as shown in the table below, several EVs present a dramatically low driving range in motorway (70 mph - 112 km/h). Buying an EV that can't do much more than 100 km on motorway (at speeds below 120 km/h) is a major disappointment for many customers. Their expectations are set by what ICEs can do and the gap is major, especially in cold weather. Recommendation: OEMs must put behind the temptation of selling 'compliance' BEVs - cars with ICE-shared platforms and laggard technology. On the short term, these are great to tick the box and evidence a EV portfolio. However, convincing customers to buy these cars is a long-term gamble, as these customers may not come back to EVs so soon. Sustainability The truth is that there are EV vs ICE carbon footprint comparative studies for all tastes, even that EVs lead over ICEs in the vast majority of situations. However, carbon footprint lifecycle assessments can vary greatly according to the conditions surrounding EV usage. Some examples: The battery is really the 'Achilles heel' of EVs in terms of carbon footprint. As mentioned earlier, if an EV battery would only last 350,000 but an engine and transmission can last a lot longer, this would heavily improve the performance of the ICE in comparison to the EV. Given that EVs are still at their infancy, the maintenance provided by OEM-affiliated dealers on EV powertrains is still basic - this means that in case of a problem with a battery or a motor, the approach is to replace the entire component rather than repairing it. There are already several situations of the sort happening - like for instance a Tesla Model 3 owner who was told by the dealership he had to replace the entire battery, at a cost of $16,000. But an independent repairer managed to solve the problem for much less. Besides the massive financial burden that could be avoided by EV owners, is also the aspect of sustainability - replacing a battery when, in fact, it could be repaired enhances EVs' carbon footprint. unfortunately, aspects like this are not captured by carbon footprint lifecycle assessment studies. In countries where not only the renewable energy mix is low, but also charger network is practically inexistent, the benefits extracted from EVs will be minimal. In those circumstances, self-charging hybrids can provide a better outcome in terms of carbon footprint reduction, at least until renewable energy mix and charging network are up to speed. Battery recycling or second life can reduce the battery's carbon footprint further. However, today there is still limited appetite of the industry to move close to 100% recycling content given that raw materials are still cheap enough and some recycling process technology still needs to evolve in order to enable this level of recyclability in a cost-effective manner.  We should not wait until we reach battery raw material scarcity. Just like it happened with the oil industry, it's quite likely the mining industry will adapt to find new raw material reserves since the demand for EVs is still relatively recent. For that matter, the move to battery recycling and reusability needs to be prompted by different triggers. Recommendations: Governments must enable regulation prompting the recycling of close to 100% of EV battery content. In addition, regulation on component reusability needs to be enacted in order to make sure that a major component (like a battery or a motor) is only replaced when there is absolutely no way to repair it. Each country must formulate policy that adapts its particular situation. For several nations, achieving an energy mix largely based in renewable energy and building a highly-dense EV charger network is something that is still some decades away, if possible at all. In those circumstances, promoting the widespread of self-charging hybrids is a good intermediate step until the main conditions are met to move into full electrification.    Closing remarks BEVs are the future - no doubt about it. However, the path to full electrification is still long and full of obstacles. Governments, press, industry, public opinion in general have the duty to highlight main roadblocks and work together to solve them effectively. This text provides several recommendations that can enable full electrification by 2030-2035 in Europe. However, it will take major cooperation and vision from all parties to achieve this goal.   
14.09.2021 03:13
Three Rules for Every Organizational Redesign
It may surprise some people to hear me say that there are rules that apply to every organizational redesign. After all, I did just boldly declare that you should never benchmark your org structure, because “your organization is a snowflake”. [1] But both these things are true. Your structure never will (and never should) look just like anybody else’s. And at the same time, there are best practices in org design that apply across the board. Here are my top three: Rule #1: Ensure you actually need a new org design At Gartner, we’ve found that organizational redesigns typically occur for one of three reasons: The C-suite requires it (because of costs, M&A activity, etc.) One or more stubborn problems need resolution (like inefficiency, lack of flexibility, etc.) A new goal can’t be achieved with the current structure (like digital transformation, breaking into a new market, etc.) When you dig into these, though, you often discover that costs could be cut another way, the inefficiency isn’t rooted in the structure at all, and the new market entry could be achieved with less extreme adjustments. So in cases like these, why do people assume they need a new structure? In my daily conversations with Communications and Marketing leaders about org design, I’ve begun to think that business leaders have somehow come to automatically link big, complicated, overwhelming challenges with structure, because structure is itself big, complicated, and overwhelming. By this logic, if you have such a problem or goal, the solution couldn’t possibly be as simple as a service level agreement, or more clear and transparent communication from leadership, or just giving your team some training… right? Well… yeah, sometimes it is. Of course, there are also those leaders who want to restructure just to leave their mark on the organization. [2] Obviously don’t be that guy.   Rule #2: Clearly articulate your vision I once heard a legend in which Robin Hood was walking through the forest and noticed a bunch of arrows perfectly landed in the center of targets drawn on trees. He wanted to recruit this archer, so he followed the targets until he found a small boy with a quiver on his back and a bow in his hand. He asked the boy if he knew the archer who’d shot all these bullseyes. The boy said, “I’m the archer, sir.” Robin Hood asked the boy how he’d developed such amazing accuracy. To which the boy replied, “Easy, sir. First I shoot the arrow, then I draw the target around it!” We don’t do cute strategies in business. We do solid ones. And a solid strategy for an organizational redesign involves defining a very clear vision of desired outcomes up front. It’s not enough to say, “We need to close silos” or “We need better collaboration”. Those are just re-statements of the problem. Instead, clearly articulate your “PGPR”: Purpose: Why are you restructuring? Goals: What objectives should a new structure achieve? Priorities: In the event of tensions or necessary trade-offs between goals, which goals should take priority? Requirements: What criteria must any new structure design meet (because of budgets, C-suite directives, HR/legal constraints, etc.)? PGPR defines success. It tells you whether you’ve hit the target or not. Without it, you’re just shooting at random, which will get you random results. Rule #3: Let the people who do the work design the new structure Gartner’s HR research team has uncovered some pretty impressive facts about who makes org redesign decisions: Including non-manager employees in redesign decisions more than doubles the likelihood of restructure success — the greatest impact of any employee group. Yet non-manager employees are the least likely to be consulted about a restructure. [3] Surely, if business leaders knew this, they would involve non-manager employees more in making redesign decisions, right? Ahh, it’s not so simple: Sixty-eight percent of leaders overseeing redesigns tell us that they involved frontline employees in making or providing input into redesign decisions. By contrast, only 11% of employees agree. [4] You see, business leaders think they are including non-manager employees in redesign decision-making. Employees see it differently. Asking for employee feedback about your redesign plan is better than simply announcing it to them. But even asking for feedback doesn’t go far enough to get you the >2x boost in restructure success. To get that, you’ll need to let go control and allow the people who do the work to redesign how the work gets done. After all, who knows better than them what will actually work? Not you, for sure. Did you catch the commonality? All of these rules apply to the process of redesigning your organization, not to the new structure itself. And that’s the real takeaway here: Your org design is a snowflake, but the process you follow to change it is not. Everyone considering a restructure should carefully assess that a restructure is actually necessary, clearly articulate their vision for a new structure, and involve the people who do the work in the design of that new structure. Over 80% of reorgs fail in some way [2]. If you do these things, the chance of your restructure succeeding will rise dramatically. References [1] Lesson Video: “Benchmarking” Your Org Structure Is a Bad Idea” [2] Getting Reorgs Right (HBR) [3] Five Steps to Restructure Marketing—And Keep Your Sanity [4] 3 Questions You Must Answer Before You Restructure for Hybrid
10.09.2021 09:46
Hyperscale Cloud Providers vs. Cloud IT Services Providers: Who Must Bend the Knee?
Hyperscale cloud providers attract the most media attention and are at the epicenter of innovation in infrastructure and platform services. Growing adoption and increased spending are driving the momentum of this trend even more. According to Gartner’s 2020 Cloud End-User Buying Behavior Survey, 68% of respondents globally indicate that their organizations plan to increase spending on cloud computing in the next 12 months. The majority (76%) of respondents using public cloud indicate that their organization is using multiple public cloud providers. Public cloud providers are generally the main focus of digitization initiatives, perhaps due to the market dominance of a small number of hyperscale providers. The messaging of these digital giants is powerful and compelling, and it would seem that the benefits of public cloud are easy to obtain. However, almost a third (32%) of respondents to Gartner’s 2020 Cloud End-User Buying Behavior Survey reported that their organization unsuccessfully or ineffectively implemented cloud-based solutions in the past three years. Gartner interactions show that the complexity of moving to the public cloud and the scarcity of talent and skills to build and operate public cloud infrastructure are connected to cloud project failures. In addition, survey participants say that the most frustrating aspects of working with public cloud infrastructure providers, such as hyperscale cloud providers, are: Cloud performance (28%) Cost control (28%) Cloud interoperability (27%) Migration of mission-critical applications to cloud (27%) Regulatory compliance (26%) Despite attention being predominantly on hyperscale cloud providers, 65% of survey respondents report their organization is working with cloud IT services providers to overcome the frustrations noted above. That makes cloud IT services providers crucial partners for the hyperscale cloud providers’ ongoing success and ability to achieve their growth ambitions and expectations. Tech CEOs of cloud IT services providers can build a thriving business around the leading hyperscale cloud providers’ portfolios with a successful partnership strategy and technical expertise. In our research note “Tech CEO Cloud MSPs Are Crucial Partners for Hyperscale Cloud Providers’ Growth Strategy and Success”, we help tech CEOs of cloud IT services providers to understand the importance of their role in the cloud ecosystem to better articulate their value proposition in their partnership strategies. - - - If you want to engage with me, feel free to schedule an inquiry call (inquiry@gartner.com), book a vendor briefing (vendor.briefings@gartner.com), follow me on Twitter (@ReneBuest) or connect with me on LinkedIn. I am looking forward to talking to you!
09.09.2021 09:52
Just Say “No” to Low-Value Comms Activities
Since the spring of 2020, Communications leaders have experienced an increased need to prioritize their teams' work. Communications teams feel overwhelmed, overworked, and completely burned out from the volume of requests that they have been fielding. When business partners insist that EVERYTHING is important, communicators can be left scratching their heads on where to truly spend their time. Communications leaders with these challenges ultimately face two main issues:  1. Not having a solid enough grasp of organizational priorities to start saying “no” to requests that do not align.  When communicators say yes to every business partner request without evaluating whether the request is aligned to business priorities, they often become overwhelmed by request volume. Moreover, this might validate a perception that the Comms function isn't strategic and doesn't add value to the business.  Additionally, by automatically saying yes to requests, communicators assume that business partners know what they need. They may have a solution to the challenge, but without evaluating the request, it’s harder to know whether they have the solution to the challenge.  To evaluate requests thoroughly enough to say no to low-value requests, communicators must be intimately familiar with what the business priorities are in the first place. This is harder if communicators reactively wait for requests to come to them, rather than proactively seeking out key priorities from business partners.  The latter is a more consultative approach to planning, and may require a shift in the way the Comms team works with the rest of the business. This will prove to be much harder without governance documents in place.  2. Not having governance documents to codify how to work with the Communications team. Without clear guidance for how to work with the Comms team, it’s no wonder business partners inundate communicators with low-value requests. Governance documents, like service offers and service-level agreements, can help set clear expectations for business partners and enable Communications to offer various support levels. Additionally, many Communications teams have seen their status with business leaders elevate since last year, as organizations have faced unprecedented challenges that require a strong Communications function. Unless Comms leaders clearly define the Comms value proposition, along with their capabilities, policies and procedures, their teams run the risk of losing ground with the organization once they come out of crisis mode.  Here are four steps to address these issues and prioritize your team's work:  1. Identify your organization’s most critical priorities, business objectives, and goals.   Rather than waiting for them to come to you, schedule conversations with your business partners to surface their business priorities. This can occur annually, quarterly, and/or monthly.  Key questions to ask include, but are not limited to:  What are your current priorities and initiatives? How do these priorities align with organizational strategy?  What will help you achieve your performance goals?  What are the target business outcomes and metrics you will use to measure success? Why are you focusing on these areas right now? Who needs to do what to achieve these goals? What metrics will you use to measure stakeholder behavior? 2. Assess the value of your Communications activities.  Next, with an understanding of what your business partners are trying to achieve, assess how aligned your activities are to those priorities. Are they routine activities or strategic? Will they help the organization achieve its goals or is it a business partner's pet project? After estimating your activities' business value, you should then assess the opportunity for the Communications function to uniquely add value. Are there key stakeholder behaviors that need to occur to help the organization achieve its goals? Comms is often more strongly positioned to influence behaviors. Therefore, Comms should own activities that require behavior change, rather than encouraging the business to do those activities themselves.   In your assessment, you can also consider the risk associated with the activity. What is the risk to the organization if you recommend the business partners do the activities themselves? What is the risk if no one does it?  Take a look at Gartner’s tool to help with this assessment, Communications Activity Value Assessment (Gartner subscription required). Use this tool to visualize the allocation of your resources to high-/medium-/low-value activities. Then decide which activities to eliminate, standardize or invest in further to achieve your strategic goals. 3. Establish implementation support guidance for business partner requests.  You can then use the results of your assessment to create service level tiers. These tiers clearly define the implementation support your team will provide to the business based on the type of activity. For instance, the Comms team should own and implement high-value activities, like M&A communications and strategy rollouts. You can enable self-service for business partners to do lower-value activities, like simple org change announcements or site-based communications, by providing them with tools, templates, and guidelines.  Take a look at this case study, Principled Communications Service With Tiered Service Levels (Gartner subscription required), to learn how ING’s Communications team partnered with internal clients to implement a tiered service-level framework. This framework enabled them to shift their activity portfolio aggressively to prioritize high-value work.  4. Educate business partners on Comms capabilities and governance. Finally, incorporate the service level tiers (along with your team’s capabilities, value proposition, and expectations of business partners) into a service statement. Codifying the best way to work with the Comms function will help educate your business partners. You will also have something to stand on when the best decision is to say no to low-value work.   You can see examples of how other communicators are structuring their collaboration with business partners — while simultaneously reducing their resource expenditure on low-value work — in our Service Statement Library (Gartner subscription required). This change won’t happen overnight. However, through consistent work with your business partners and Communications team, you can better prioritize your activities. If you’d like some additional guidance or feedback on your own service statements, Gartner is always available to help!
08.09.2021 05:44
Turn 2022 Supply Chain Strategic Planning Into a Competitive Advantage
With 2021 soon to be in the rearview mirror, now is a great time to take stock of where we’ve been and how we might approach strategic planning differently in the future. As we all know, the recent spate of global disruptions such as the COVID-19 pandemic, geopolitical upheavals and extreme climate events has far-reaching impact on various industries and supply chain organizations. That said, less than 50% of supply chain leaders believe that their organizations performed better than their competitors during the past year. It’s no surprise then that supply chain organizations are striving to become future fit in the wake of severe disruptions and to prepare for the severe disruptions to come. Future-fit organizations actively prepare to respond to disruptions and anticipate change; they maintain competitive advantage during highly uncertain business contexts. Strategic planning, if done well, is a critical lever to build future-fit supply chain organizations. Unlike other years, 2022 strategic planning must be different — we can no longer rely on our traditional strategic planning approaches that last for months and result in creating a strategy that is fixed until the next annual review. The business context is likely to continue to change, and the supply chain strategy and strategic plans will need to adapt to this reality. Our conversations with hundreds of senior executives and CXOs in supply chain organizations reveal four key imperatives to enable strategic planning that drives sustained strategic advantage: Elevate Disruption Shaping as a Strategic Planning Goal To reduce the impact of frequent, unfamiliar disruptions on the supply chain, supply chain leaders have to embed disruption shaping in strategic planning. Gartner identifies three major phases in developing an enterprise strategy: strategy formulation, strategy planning and strategy execution (see Figure 1). Most supply chains today plan for unfamiliar risks as they execute the supply chain strategy. Instead, CSCOs must elevate disruption shaping to the strategy planning phase. Leading organizations reduce the rate of disruption by making their supply chains smaller targets in this volatile risk environment. This goal of disruption shaping must cascade down from strategic planning to action plans and appropriate tracking measures. Supply chain organizations that actively embed disruption-shaping strategies are likely to experience less than one-third of the disruptions experienced by their response-focused peers. Support for Gartner clients: Supply Chain Executive Report: Shaping Supply Chain Disruption in a Volatile Risk Environment Case Study: Risk Exposure Diversification Strategy (Stanley Black & Decker) Case Study: Advantage-Driven Risk Strategy (First Solar)  Move to an Adaptive Strategic Planning Process Most supply chain organizations conduct strategic planning on an annual cadence — however, this approach can leave organizations less responsive to market threats and opportunities that occur outside of planning cycles. Adaptive strategic planning can help supply chain leaders respond to unprecedented change and uncertainty. It starts with building a strategic planning cadence that gathers supply chain leaders and other relevant stakeholders to review the strategic plan multiple times during the year, ensuring that it remains relevant to market conditions. Continual scanning of emerging risks and trends, minimum viable strategy and strategic plans, and experiment-based strategies are all building blocks of adaptive strategic planning. Tractor Supply Company (TSC) is an exemplar in using adaptive strategic planning to drive competitive advantage. To better respond to the disruptive changes in the highly competitive retail market, TSC continuously monitors and identifies market trends that likely impact supply chain strategy significantly, assesses capabilities to take advantage of these trends and conducts more frequent strategic plan reviews to prioritize supply chain action. The quick shift in supply chain strategic plans enabled TSC to prioritize and roll out same-day delivery to its stores early in the pandemic — the company saw 7.5% year-over-year increase in first quarter net sales and a 4.3% increase in comparable store sales in 2020 from 2019. Support for Gartner clients: Case Study: Adaptive Supply Chain Strategic Planning (Tractor Supply Co.) Supply Chain Emerging Risk Prioritization Tool Creating Supply Chain Strategy at the Speed of Business Change Amid Uncertainty Surface Strategic Assumptions to Determine When to Change Course Clear assumptions are the foundation for keeping supply chain strategic plans relevant while also maintaining strategic focus. Spending time up front on explicit and implicit assumptions helps supply chain leaders vet the strategic plan periodically and makes it easier to spot the need for a refresh. However, unlike in previous years, we cannot cascade the strategic assumptions underpinning our previous plans, as most of these assumptions are likely irrelevant in light of the massive upheavals in business and economic operating contexts. Instead, supply chain leaders must begin by taking a clean-sheet mentality to business assumptions in 2022. Leading supply chain organizations take the following critical steps: Surface and document all critical assumptions underpinning the new business strategy, and prioritize them based on how critical they are to the success of the strategic decisions. Create tangible near- and mid-term indicators for the assumptions to objectively track their validity over time. These could be internal indicators (e.g., our company is able to acquire technology licenses from firm X) or external indicators (e.g., worldwide ocean traffic to grow by Y%). Leverage scenario planning exercises to test the validity of their strategic assumptions and uncover hidden assumptions. Support for Gartner clients: Flexible Supply Chain Strategic Planning Starts With Strategic Assumptions Ignition Guide to Conducting a Supply Chain Scenario Planning Exercise 5 Steps for Dynamic Scenario Planning Following COVID-19 Embed Flexibility in Supply Chain Budget and Resource Allocation Seventy-two percent of corporate strategists say slow budget reallocation is the biggest barrier to a more adaptive plan. The deeply interconnected nature of a fixed annual budget makes it hard for the supply chain organization to pivot quickly. When unexpected events happen that require changes to the strategic plan, highly interconnected annual budgets often lack rapid resource-reallocation mechanisms, preventing next steps. Without the power to reallocate funds quickly, supply chain leaders can only make limited changes to their plans in the short term. Leading organizations take the following steps to drive more flexibility into their budgeting approach while balancing cost optimization and innovation priorities: Start with a rigorous view of supply chain spend and investment allocation in the last year to get a baseline estimate of critical spend across each functional area. Build budget scenarios and reallocation triggers to account for changing business needs. Adopt multiple and flexible funding models that support changing priorities and sustain innovation focus in varied business environments. Support for Gartner clients: Supply Chain Budget and Efficiency Benchmarks Sustaining Supply Chain Innovation Through Adaptive Funding Models So there you have it. By considering and acting on these four imperatives, supply chain leaders can pave the way for strategic planning that drives sustained strategic advantage. Best of luck as you plan for 2022! Veena Variyam VP Supply Chain Research Gartner Supply Chain Veena.Variyam@gartner.com
07.09.2021 11:00
Which Industries Lead in Email Marketing?
At this very moment, you probably have hundreds, if not thousands, of unopened marketing emails in your inbox. Email marketing is one of the most important channels for digital marketers and it has only become more important since lockdown began as emails replace in-person engagement with consumers.  Most brands’ email strategies can be summarized as quantity over quality, but marketers can learn from standout brands not only in their own industry but from others as well. Gartner’s Digital IQ Index: Email Benchmarks 2021 shows how six different industries have adapted to the pandemic and offers applicable recommendations for digital marketers in these industries. Below are the rankings of the six industries and the top brand in each: 1. Retail Retail is the top-performing industry in the benchmark as multiline and mono brand retailers dominate. Brands like Best Buy, Target, and Nike took advantage of the ample amounts of data to send hyper-targeted, relevant email updates. After all, you are more likely to open an email discounting a pair of shoes you looked at last week than another limited-time discount email on a nonspecific item. Retail leveraged both implicit and explicit data to inspire engagement, and had the highest year-over-year growth in site traffic from email, driving increased conversion.  2. Financial Services Financial services as a whole performed nearly as well as retail and made up 5 of the top 10 spots in our brand rankings. Brands also saw increased traffic from email and benefited from having the highest open rates across all industries. Financial services marketers can push timely, targeted email content through their extensive customer account data.  For example, Bank of America — the number one ranked brand in this study — uses its app to collect granular customer data. Bank of America collects data about savings plan preferences via an AI tool within its app and directly references those answers in email subject lines. A millennial planning to save for a home will receive an email with a Life Plan to help work towards that goal. 3. Travel and Hospitality One of the hardest hit in the pandemic, travel and hospitality brands that adapted quickly were able to find relative success in email marketing. The industry has the second highest number of total open emails but was not able to drive traffic to site as well as other industries. Top brands found ways to offer value to customers virtually or safely, usually in the form of free delivery or curbside pickup. Once people started dining in person more, Chili’s – the number one travel and hospitality brand – sent follow-up emails to customers after each visit rewarding them with a free appetizer, or dessert at their next visit. 4. Manufacturing and Natural Resources Manufacturing and natural resources brands often struggle to collect the necessary customer data, but industry leaders have adopted some tactics from their B2C peers. Top brands leveraged the data they had to target specific customers and achieved email open rates comparable to its travel and hospitality peers. Milwaukee Tools, the top brand in the industry, uses a data collection form on its brand site to target specific trades in their emails, driving traffic back to their site.  [caption id="attachment_15" align="alignnone" width="1024"] Milwaukee captures data with a form on its brand site, including a question about the user's trade. Its emails then focus on specific trades and professions in their subject lines, which are sent to small number of recipients. Milwaukee also includes recommended products in every email.[/caption] 5. Consumer Goods Consumer goods also faces an uphill battle due to the relative lack of first-party customer data and owned commerce channels. Marketers in this industry had the lowest email open rate of all industries and suffered a decline in traffic year-over-year. However, top brands also emulate B2C brands by offering customer accounts to collect data like purchase history. Hint, for example, offers exclusive subscriber access to new water flavors and alerts users to restocks for specific flavors they had previously purchased. 6. Healthcare Healthcare ranked the lowest overall. Brands in this industry had the lowest mobile optimization rate, despite being table stakes among the other industries. Healthcare marketers were largely unsuccessful in driving traffic to site from email, but top brands were able to push educational and targeted content that resonated with subscribers during the pandemic.
07.09.2021 05:00
Surprise! Many Enterprise Buying Teams Don't Know Their Own Buying Process
As we prepare our next buying study to go to the field, we are looking back at some earlier results to decide how to tune the survey to get useful information.    In our earlier study (from 2019) that focused in on the biggest purchase a respondent was involved in, we worked to uncover the frequency of occurrence of what we call high quality, low regret deals.   If you follow this blog, you know that the percentage of these deals was quite low--only 27% out of 1464 purchases studied met the criteria. With that in hand, we worked to understand why.   What we discovered were issues on both sides of the tables.   Many buyers are not confident in their own decision processes and vendors are not doing enough to help them.  Add to that some inherent skepticism and it creates a challenging environment. But there are other issues, as tech buying gets more and more distributed across the organization, I expect the challenges to increase.  On the surface, the idea of putting decision making close to the groups that will be getting the most value seems like a good idea  But it also means that you will have a lot of people involved in big buying decisions that they don't make on a regular basis. We already saw some evidence of this.   One of the things we asked in 2019, was whether or not the buying effort was delayed by "surprise steps" that the buying team was unaware of.   Remember, this was the biggest purchase that the respondent was involved in.   Also, these were buying teams with 10+ people actively or occasionally participating.  You would think that awareness of the steps required to buy would be very high. Unfortunately, it was not. [caption id="attachment_2877" align="aligncenter" width="899"] Source: Gartner, Inc. 2019[/caption] Basically, when looking at things based on deal size, 50% of our respondents said their buying efforts were delayed by these surprise steps for purchases under $5M.   That number went down slightly (48%) for deals over $5M, but those also had a higher percentage of significant delays. When looking at this by high quality deals, the numbers due shift.  For high quality deals, only 35% experienced delays due to surprise steps (still a big number!), whereas 56% experienced delays for deals that did not meet our criteria. Does this surprise you?  It really shouldn't, but often we go into situations assuming our customers know what they want to do and know how to do it.   That is often not the case.  To accelerate good business, vendors need to help their customers buy (see all of our work on buyer enablement and sensemaking).  They need to help customers build confidence--not just in the vendor, but in themselves.  They need to guide the customer through common efforts that other successful customers follow--reducing surprises and delays. The old question used to be, "How much time should we spend educating our prospects?" The new question should be, "Can we afford not to educate and guide our prospects on how to buy effectively?" Those that commit to this area will reduce the frustrations that could come as decision making continues to be distributed across the organization.
07.09.2021 03:15
Listen, IT Leader: Tool to Assess the Effectiveness of Your Team's Culture for Your Company's Digital Ambition
Most organizations are striving to adapt their culture to accelerate their digital journey. CIOs and IT Leaders can use this tool to identify the necessary culture changes to ensure their team’s behaviors are well-aligned to their enterprise’s digital ambition. Culture is an extraordinary enabler of digital ambitions, but it can also jeopardize them. Our research shows that, without the appropriate culture, the chances to succeed in your transformations diminish significantly (transformations in your digital ambitions, in your operating model, in your IT or enterprise strategies, etc). Behaviors are the manifestation of a culture. Changing the behaviors in your IT organization will be a key element for success. In Gartner, we have developed a tool that provides you with a set of criteria to evaluate the current culture gap of your IT organization. These criteria are organized around the 4 components of Business Models: External Clients/Citizens, Finance, Capabilities, Value Proposition. The tool provides you with: The fundamental behaviors (aka cultural attributes) CIOs should start developing from today. Example: The overall culture alignment degree your IT organization has, and a high-level diagnostics that summarizes your situation — There are five degrees: unaligned, awakening, settling, aligned and forward-looking. Example: Intention/Action your organization has: Intention: The current focus, for each of the business model components, on the Intention to do what you have to do (“I know what I have to do”) Action: The current focus, for each of the business model components, on the Action to make things happen (“I act upon it”) Example: The Present/Future focus of your organization: Present: The current focus, for each of the business model components, on the Present Future: The current focus, for each of the business model components, on the Future Example: The diagnostic based on the scores in Intention/Action and Present/Future. Example: Specific recommendations about how to evolve the culture alignment of each component of the business model to its next degree. Example: With all this information, CIOs and IT Leaders will have a clear picture of where they should focus their attention to overcome the cultural barriers that jeopardize the IT organization’s ability to support their enterprise’s digital ambition. To access the tool, go to "Tool: Assessment of Culture Alignment to Your Enterprise's Digital Ambition" (Gartner suscription required).   May wisdom and courage be with you. Daniel Sanchez-Reina   My latest posts: Gain Influence in the C-Suite by Fulfilling 2 Essential Unaddressed Needs of the CEOGain Influence  Predicts 2021: CIOs Must Adjust Talent and Leadership Direction for Digital Acceleration Create a Culture of IT Smart Spending Measure the ‘Predictors of Productivity’ in a Hybrid Workplace (Remote + On-Site)   — I will be looking forward to talking to you. Feel free to schedule an inquiry call (inquiry@gartner.com), follow me on Twitter (@DanielSnchezRna) or connect with me on LinkedIn.
06.09.2021 12:59
Who Owns the Customer Experience Anyway?
Despite many years of increased organizational focus on the customer experience (CX), many supply chain leaders remain willing to leave the role of managing the CX to commercial and/or marketing teams. However, real opportunity exists for an active supply chain voice to drive CX-related business strategy and outcomes in areas such as: Design — Know and align strategy, operating model, measures, product and service options to address customer needs and preferences Operations — Reliably and seamlessly deliver products, services and experiences to meet customer expectations A growing number of leading supply chains from the Gartner Supply Chain Top 25 and beyond recognize that CX investments aren’t just altruistic — they can drive measurable business outcomes. What are the most common outcomes expected from CX investments, according to more than 400 supply chain participants surveyed by Gartner? Optimized costs (57%), improved service metrics (55%) and revenue growth (46%). The challenge is in proving the relationship between the supply-chain-driven CX investment and business outcomes. Materials science giant Dow, an engineering-cultured company, is one such organization that has been able to leverage this relationship. Dow has demonstrated mathematical correlations between its supply chain performance, the CX, and both margins and growth with Riccardo Porta, Dow supply chain director, recently saying to us: “Every supply chain professional has experienced the frustration of unsuccessfully trying to counter a cash flow inventory reduction value proposition with an on-time, in-full (OTIF) argument. But, what if you can turn the OTIF percentage into CX impact, and CX impact back into margin and growth? That’s the power of CX for supply chain!” We explore how leading supply chains are driving customer value through culture and insights in the August executive report (available to Gartner clients) and in the accompanying podcast, which is available on Spotify, Apple Podcasts and Google Podcasts. But, Who Owns CX? Overall ownership of CX in our organizations can be hard to pin down, particularly where there is no formal CX executive leader or group. Without some type of central coordination, leaders of functions and business units are often unaware of completed CX projects, and the value that they create for the business more broadly and their function more specifically. Chaos ensues when each group acts independently, even with the best intentions — the organization inevitably stumbles. Leading organizations start the shift toward customer centricity by creating cross-functional leadership councils or steering teams focused on the CX. Supply chain is not typically the lead — more often it is marketing, sales or a designated CX leader for the enterprise. But the supply chain needs to be a core member of the CX steering team. In lower maturity organizations, where this leadership cannot be easily identified, this may mean that supply chain must work to convene a cross-functional group focused, initially, on driving the CX for top accounts. Although the framework for governance varies across companies, effectiveness relies on consistent and efficient CX principles that business partners adopt into their decision making. Without consistent execution and operational standards, end-to-end management of CX across the enterprise is almost impossible. At minimum, a supply chain should have its own working group focused on the CX, if one does not exist at the enterprise level. This top-level leadership and alignment must be reinforced by bottom-up initiatives that clearly connect what people do in their jobs to how it impacts the customer. Employees must see a direct connection to their “role in the goal” while being provided with sufficient information and insight that will enable them to execute. For example, companies such as Lenovo are “democratizing” their customer insights. This is about giving broad access to employees across an extensive set of data points. This includes individual customer, consumer and channel partner insight communities, customer surveys and analysis of indirect and inferred customer sentiment from social media. The objective of these sensing activities is to identify an opportunity or root cause of a problem, then enable employees to take action. For the supply chain, this more empowering, collaborative approach to delivering the CX has led to material improvements in service levels such as a 6% year-over-year improvement in products delivered on, or before, the delivery promise date. Lenovo even recognizes the importance of incentives and ensures that employees have skin in the game when it comes to CX performance. Between 10% and 20% of employee bonuses are explicitly tied to CX metrics. Of course, it’s not a linear path to get to the point where you can democratize customer insights across your supply chain organization as Lenovo has done. Or link CX investments to business outcomes as Dow has been able to do. However, you may aspire to these types of capabilities where the supply chain is recognized as something more than a cost center — as a department that drives value to customers and organizational growth. If so, then it’s time to either make the case for supply chain to have a voice at the CX leadership table or reinforce the critical role that you play in that leadership group so that you can open up new opportunities. Thomas O’Connor Senior Director, Analyst Gartner Supply Chain Thomas.Oconnor@gartner.com
03.09.2021 10:00
Look to China for Solutions to Social Commerce's Challenges
With the emergence of Instagram Shopping, Facebook Marketplace and the TikTok-Shopify partnership, social commerce has arrived. But it's not without challenges. Marketers face two broad categories of consumer pushback on their social commerce initiatives. First, consumers lack trust that their personal data privacy will be secured over this new channel. Second, consumers miss the level of detail they are accustomed to on e-commerce product pages, including reviews, user-generated content, ample product images and detailed descriptions (see Design Social Commerce Features That Convince Consumers to Buy). China, with its more advanced social commerce ecosystem, offers perspectives for overcoming these challenges. Leading global brands in diverse categories build extensive commerce presences on China’s largest social platform, WeChat. These efforts provide consumers direct access to a curated assortment of products with ample product page information and compelling content. In China, brands alleviate privacy concerns by creating an easy direct-to-consumer purchase experience. By developing and operating “mini program” stores within the WeChat ecosystem, brands offer a customized shopping experience without making consumers exit the app or disrupting their social media experience. Mini program stores typically mimic web-based direct-to-consumer commerce, in that they include an image- and video-rich storefront, search, category pages and product detail pages (PDP) with extensive information. In addition to providing ample and useful product information, Chinese product pages also incorporate content from celebrities, influencers and users to make product pages livelier. This includes asking users for permission and reusing their social media product photos on official product pages, as well as mimicking the style of user photos. These tactics can help reduce consumers’ skepticism in social commerce. Western marketers should strive for a visual style on their social media and social commerce presence that is both authentic to the brand’s image and native to the social media community’s unique taste. Marketers outside of China should leverage insights from the country’s social commerce playbook. Experiment with Chinese social commerce tactics, and start a dialogue with teams operating in the Chinese market to learn the social commerce practices that make the most sense for your brand.
03.09.2021 06:29
Look to China for Solutions to Social Commerce Challenges
With the emergence of Instagram Shopping, Facebook Marketplace and the TikTok-Shopify partnership, social commerce has arrived. But it's not without challenges. Marketers face two broad categories of consumer pushback on their social commerce initiatives. First, consumers lack trust that their personal data privacy will be secured over this new channel. Second, consumers miss the level of detail they are accustomed to on e-commerce product pages, including reviews, user-generated content, ample product images and detailed descriptions (see Design Social Commerce Features That Convince Consumers to Buy). China, with its more advanced social commerce ecosystem, offers perspectives for overcoming these challenges. Leading global brands in diverse categories build extensive commerce presences on China’s largest social platform, WeChat. These efforts provide consumers direct access to a curated assortment of products with ample product page information and compelling content. In China, brands alleviate privacy concerns by creating an easy direct-to-consumer purchase experience. By developing and operating “mini program” stores within the WeChat ecosystem, brands offer a customized shopping experience without making consumers exit the app or disrupting their social media experience. Mini program stores typically mimic web-based direct-to-consumer commerce, in that they include an image- and video-rich storefront, search, category pages and product detail pages (PDP) with extensive information. In addition to providing ample and useful product information, Chinese product pages also incorporate content from celebrities, influencers and users to make product pages livelier. This includes asking users for permission and reusing their social media product photos on official product pages, as well as mimicking the style of user photos. These tactics can help reduce consumers’ skepticism in social commerce. Western marketers should strive for a visual style on their social media and social commerce presence that is both authentic to the brand’s image and native to the social media community’s unique taste. Marketers outside of China should leverage insights from the country’s social commerce playbook. Experiment with Chinese social commerce tactics, and start a dialogue with teams operating in the Chinese market to learn the social commerce practices that make the most sense for your brand.
03.09.2021 06:29
AI Trust Risk & Security Management; Gartner Market Guide
My Gartner colleagues Farhan Choudhary Jeremy D'Hoinne and I just launched coverage of the AI Trust Risk & Security Management (TriSM) market. AI TriSM comprises multiple software segments that ensure AI model; governance, trustworthiness, fairness, reliability, efficacy, security and data protection.  See Market Guide for AI Trust, Risk & Security Management As users start operationalizing their AI models, their attention quickly turns to managing model risk and ensuring their AI can be trusted to perform as designed.   In fact, our last Gartner enterprise AI survey found that ‘security or privacy concerns’ are the number 1 barrier to AI model implementation so it’s no wonder that’s where user attention turns once models are put into production.  See Survey Analysis: Moving AI Projects From Prototype to Production Today the AI TriSM market is fragmented, and users must select solutions from multiple categories to manage many inherent risks and issues. Most AI vendors and platforms do not provide all required functionality but over time we believe they will acquire these capabilities from existing niche vendors as noted in Figure 1 below.   Third Party AI Models Further, today users are mainly concerned about managing risks of their own homegrown models and have yet to incorporate TriSM around third party models that use AI, such as advanced cybersecurity products for endpoint and network protection. We believe these third party models will increasingly be managed by end-user organizations so that users understand the AI functions they have bought into, and can ensure models operate as expected. Build TRiSM in - not as an Afterthought Security and risk concerns are almost always an afterthought in any system development and deployment. When it comes to AI, this is an especially poor design choice since there are so many moving parts and so many of them are opaque to most users. There’s no need to rely on a black box running critical functions for your enterprise. There are in fact many solutions that bring transparency and trust, keep the bad guys out, prevent benign mistakes, protect sensitive data, and keep AI models functioning as intended.   These solutions just need to be used. The good news is that the same solutions that manage risk and security also help optimize AI model performance.  Hopefully that will get users to deploy AI TRiSM, and once they do, the inherent risks will be readily apparent. After all, if you aren't looking, you won't see.  But frankly, this is the kind of elephant in the room that you are much better off staring down.
02.09.2021 11:23
Deploying Revenue Data Makes Sense of Sense Making
The Gartner for Sales research team put out a study in 2019 titled "Redefining the High-Performing Seller for the Information Era." Since that's a bit of a mouthful, we now tend simply to refer to this B2B sales guidance as "Sense Making." The theory is fantastic, but the execution is easier said than done. Until now! We found the answer the tough questions you've been asking around enabling Sense Makers with context. Check this out....   What is Sense Making, You Ask? Well, this research converged buying challenges of the time with (in)effective seller approaches and found that high-performing sellers tend to take a certain path when providing information to prospects and customers. A path that diverges from core performers pretty significantly. They don't pull up the dumptruck and pour out everything that's ever been related to the question or subject at hand as "Giving" sellers do. They don't pontificate on years of experience and relevant expertise and put concerns to rest with a 'just trust me, I've been at this a while' as the "Telling" sellers do. Instead, they help customers "Make Sense" of the information landscape, sort out the tons of self-guided and competitor-provided research and product knowledge prospects and customers have already collected. They only provide new information when they can confirm that the customer is not already overwhelmed by the potentially conflicting, cascading, and undifferentiated information amassed.   Combined with killer "commercial insight" delivered at key moments of clarity, taking the customer's context into account... this strategy has legs, baby!   So, Why are We Talking Seller Behaviors Here? It turns out, when it comes to pre-interaction preparation and actual customer engagement, there are behaviors that sellers can engage in that will turn up the customer decision confidence dial, and turn down the skepticism of sellers as a source of information dial, and create beautiful harmony with the prospect or customer in pursuit of a mutually-beneficial purchase. One of those pre-interaction preparation behaviors that most prominently stood out to me when sales leaders and their teams would begin to execute on this approach was the need for sellers (and managers) to:   "frequently consult third-party information sources and social media to prepare for customer interactions."   Logical, yes. Scalable, maybe. Currently happening across the selling team - not likely.   Whether it comes down to time, skill, will, an intense aversion to technology... Only 23% of seller respondents to our Seller Skill Diagnostic survey as of August '21 were regularly engaging in this behavior.     Solution Execution It was clear in presenting this research that clients in sales leadership and enablement needed help determining the "how" around enabling this particular behavior... but the answer at that point wasn't completely clear even to us. But, we've been heavily invested in digging into the tech side of sales for the past year or so. From that focus, it seems to some degree the answer was waiting out there all along... underappreciated, undervalued, and misunderstood by sales teams for all of the capabilities and relevant customer context it could bring to the table regardless of time, skill, will, or phobia.   Revenue Data Solutions: Tools and vendors that supply third-party sales and marketing data around customers and prospects to enhance first-party owned data at the company and individual contact level - are capable of telling us about our clients'... research habits purchase intent technology investments and budget social media activity topics and vendors of interest and even rank, score, and prioritize against built Ideal Customer Profiles and Segmentation schemes.   Most sales leaders and enablement teams are probably familiar with some of the vendors in this space, but likely only from the standpoint of their capabilities tied to the cleansing and de-duplication of their own first-party data, or the ability to append that data with up-to-date phone numbers and email addresses for prospecting. There's SO much more rich value here that can actually provide the level of customer context necessary to appropriately plan for customer interactions through a sense-making lens.  The "mind-meld" is possible, and the opportunity here is enormous!   If this type of tech investment to support Sense Making, or really any kind of sales acceleration, automation, and engagement improvement effort is of interest... Jeff Cohen and I will be publishing a Gartner Market Guide detailing the vendor capabilities and data types along with a list and description of representative vendors in this space later this month. Stay tuned!   To read more about Revenue Data Solutions, see Jeff Cohen's blog: Revenue Data Leads the Way to Sales and Marketing Alignment Gartner for Sales Leaders clients can read more about this topic in the recently published Quick Answer: Equipping Revenue Teams with Consistent Customer Context.
01.09.2021 11:01
With the Right Content, Brands Are Increasingly Welcome on Social
When marketers learned of the 2018 Facebook feed algorithm change that privileged posts from friends over other content, it spelled doom for brands’ organic reach. At the time, Facebook said it made those changes in response to user feed preferences, and not even a digital marketing leader would’ve quibbled with a consumer who decried, “too many Facebook ads!” In 2021, nobody is asking for more Facebook ads. But consumer attitudes around brand presence on social media have evolved in recent years. The upshot is that a growing group of consumers – we call them the Brand-Engaged – is developing a healthy appetite for specific types of branded content on social. Gartner research has been tracking how consumers engage with brands on social media since January 2019, and our most recent research finds that the proportion of users who follow brands, and the proportion of users who say they like seeing content from brands on the platform have both increased markedly across the 10 most popular social media platforms. Zeroing in on those consumers who are the most engaged with brands reveals that the proportion of Brand-Engaged users has doubled from 10% to 20% of users (an average across the 10 platforms) from January 2019 to April 2021. Brand-Engaged users are the holy grail for digital marketers when it comes to conversion to sales. More than half said they saw a brand’s post on social media and made a subsequent purchase in the 30 days preceding October 2020, compared to only one-quarter of frequent social media users overall. Take Two Approaches to Connect with Brand-Engaged Users Digital marketing leaders can maximize the social performance metrics that matter most to them by taking two actions: targeting the people most likely to be Brand-Engaged consumers on the platforms where they’re most abundant, and building social content that aligns with the preferences of this type of valuable customer. Brand-Engaged social media users are mostly Gen Z and millennials, more likely to live in urban areas, and more ethnically and racially diverse. To maximize the upside that comes with Brand-Engaged users, digital marketers must locate the “sweet spots” where frequent users, brand followers and those who like to see brand content gather. Instagram, Twitter, Facebook, TikTok and YouTube have the highest proportion of Brand-Engaged users relative to their total user base. Digital marketing leaders will find more opportunities to foster new engaged followers on smaller platforms where users, mostly younger, are more likely to enjoy brand content and relatively few already follow brands compared to other platforms, especially on Twitch, Snapchat and Pinterest. While marketers face substantial investments in creative to consistently engage with users on these platforms investing in rich, creative social executions may be more worthwhile now than just a couple of years ago. More than others, Brand-Engaged users want to see user-generated, educational and entertaining content from brands. They prioritize such posts over promotions and discounts. This is markedly different from other users, who prioritize promotional content over everything else. Additionally, substantially more Brand-Engaged users say they’re primed to “like,” comment on or share branded content if what brands post addresses issues they care about; supports their views; or is inspiring, uplifting or funny. Marketers’ primary audience for creative, experimental, educational or emotional content, then, is Brand-Engaged consumers. Gartner clients, read Capture the Attention of High-Value, Brand-Engaged Social Media Users to Boost Purchases (subscription required).
01.09.2021 08:24
Looking For New Business? Here’s How Centers of Influence Will Help
The hunt for new business - does it ever stop? Does it ever take a back seat? No. We’re in hot pursuit of every possible dollar to impact our bottom line, and one of the greatest untapped or under-tapped opportunities to do this is through Centers of Influence (COIs). Centers of Influence refer to sources of new business leads from outside the bank; accounting firms, law firms, chambers of commerce, and in some cases include internal sources, like other lines of business. Centers of Influence have always been around. They play a critical role in the new business channel ecosystem. But, they’ve played more of an ‘extra’ or ‘behind the scenes’ role, as opposed to ‘main character lead’ taking center stage. That said, more limelight needs to be directed here. Gartner research reveals that in the world of wealth management, only 15% of new clients, on average, are sourced from Centers of Influence. This is, without a doubt, an unexploited opportunity for growth. Recent conversations with Financial Services leaders not only point to renewed energy towards reviewing firm strategy towards COI partnerships, but also towards three fundamental shifts that need to be considered to win in this space. Less Banker Dependent, More Management Driven The first shift is more familiar and closer to home. Conventional approach to Center of Influence management is typically one that falls onto the shoulders of frontline bankers. In pre-pandemic years, Financial Services leaders were trying their best to remove manual burden away from bankers and create more capacity. But with the arrival of the COVID-19 pandemic and 40% of employees across industries in the US reporting feeling burned out as a result, removing manual burden away from bankers is no longer a ‘nice-to-do’ but a ‘need-to-do’. Heads of Sales and Strategy must: Step in and do more to help; take on more ownership in this process Plan and facilitate more virtual events in collaboration with COIs, to foster opportunities at scale Identify Common Purpose and Become a Cog in The Wheel Financial Services leaders should not only use Centers of Influence to access new customers, but also as a means to better meet customer needs.  “Together with for example an agricultural entity, we design an attractive funding solution for their customer base, and through that, we get access to primary and secondary customers who are not currently banking with us” - Executive Head: Business Banking Sales, EMEA “We’re looking at places where we can come together to meet a specific business need and where we might even proactively bring partners with us to solve for that need. In the US, there is a huge transition for middle market companies, as a result of aging populations, that need to transition their companies onto their children or other entities. Rather than just being a bank that fulfils one or two components of that image, we’re looking at how we can play more of a sustainable role as a ‘cog in the wheel’ together with our partners” - Sales Enablement Leader, Commercial Banking, North America Expand The Center of Influence Ecosystem The COVID-19 pandemic challenged us all to be brave and bold and Financial Services leaders must dare to look beyond traditional Center of Influence players, and look towards the unconventional.  “We are partnering with fintechs, as Centers of Influence. These partnerships are giving us access to new types of clients, younger clients for example, that we otherwise wouldn’t have been able to reach” - Head of Retail Banking Strategy, South America  To summarize, when reviewing your firm’s approach to Center of Influence partnerships to drive new business, consider these three imperatives:     Enable management to play a bigger role in Centers of Influence engagement; step in and identify opportunities to collaborate with COIs for mutual gain     Create a common purpose together with other players in the Center of Influence ecosystem; draw up the kind of expanded role you want your firm to play in the customer’s journey and how COIs around you support that role     Expand beyond conventional Centers of Influence  
01.09.2021 05:47
Is Your Supply Chain Shared Services Model Built to Adapt?
Supply chain shared services models are now well established in supply chain organizations. In Gartner’s recent Fit for Purpose Supply Chain Organization Structure survey, 88% of respondents said they operate one or more supply chain shared service centers. However, inquiries with Gartner clients reveal dissatisfaction with how shared services models are set up, both from internal customers and shared services leaders themselves. Shared services leaders struggle with new and diverging business unit requirements; business units complain that shared services do not have mechanisms for investment and adaptation to new needs. As personnel on both sides change, implicit understandings about the role of shared services are lost. Tensions emerge over who does what, the performance requirements and the amount of time internal customers still need to spend supporting issue resolution for the service delivery organization. These issues can be traced back to how a shared services model is set up from the outset. The top three purposes of a shared services center are to improve service, reduce costs, and ensure standard delivery of processes and services (see Figure 2). However, these motivations can differ in different parts of the business. To help resolve these differing perceptions about service delivery, Gartner distinguishes between shared services and centralized services. Both of these models provide low-complexity services that have commonality across business units. Both enable cost efficiencies, scalable growth and standardization.  However, there are three ways in which genuine shared services models offer solutions to the challenges mentioned above (see Figure 3 for a summary). First, Gartner has found that shared services organizations have formal service level agreements (SLAs) from the outset, clearly describing roles, responsibilities and expectations from both the service provider and the internal customer. This allows for some differentiation between the service levels provided to different business units for the same service — flexibility grounded in documented agreements that allow shared services to resource accordingly. Centralized services adopt a one-size-fits-all approach — great for minimizing cost and maintaining complete standardization, but frustrating for internal customers whose business and external customer needs are changing. Second, shared services adopt pricing mechanisms that balance effectiveness in influencing internal customer behavior with efficiency in the process of pricing and charging out costs. The aim is to price services in a way that demonstrates value-for-money and avoids underutilization or overutilization of a service.  A shared services organization can adopt different pricing models for different services — for example, variable pricing for high-volume transactional services, and fixed allocation based on dedicated headcount for activities where each transaction is labor-intensive. Centralized services are generally cost center-based, disconnecting cost from usage and value. Finally, shared services organizations contain roles designed to be responsive to business unit needs.  Gartner has received inquiries from clients who, as internal customers, are frustrated by the lack of capability of their services organization to invest in changes essential for them to grow and adapt their business. These service organizations were set up as centralized services — providing immediate cost efficiencies but lacking the internal capabilities to adapt in the years that followed. Adaptation roles within shared services manage the internal customer relationship and, most importantly, have clear governance mechanisms available from the outset to develop and get approval for changes to service provision, and their associated investments. This is not to say that centralized services are always inferior to a fully-fledged shared services model. If an organization is aligned that service delivery will be fixed and standardized to achieve minimized cost, centralized services is a viable model. To determine which model is required, organizations need to: Strategically define if and how much differentiation is acceptable between SLAs to business units Create a roadmap and investment mechanism for the evolution of service delivery Clearly allocate responsibility for adapting the service delivery organization to future needs Gartner clients can check out these additional resources: 3 Advantages of Shared Services Over Centralized Services for Supply Chain Use These Best Practices to Scope Your Supply Chain Shared Services Center Alan O’Keeffe Senior Director Analyst Gartner Supply Chain Alan.OKeeffe@gartner.com
31.08.2021 11:00
The UK Governments Slow Departure from the GDPR
In May of this year the Taskforce on Innovation, Growth and Regulatory Reform (TIGRR) published a report highlighting the governments intent to replace the GDPR with a new UK framework for data protection. In what has been seen as a poor choice of words, this recommendation referred to personal data as “currency” and outlined multiple targets including creating a more “business friendly” environment. On August 26th this intent took form in a statement outlining a series of changes chief of which is a new list of countries (data partnerships) where personal data collected from UK residents could be transferred without the need for additional controls. [caption id="attachment_40" align="alignnone" width="1024"] Figure 1, Map highlighting the UK governments new data partnerships (source: gov.uk)[/caption]   In holding with earlier poor comms choices in the TIGRR report, the list of countries appears on a map provided by the UK government (see figure 1) where the only aspect highlighted is a value in Pounds for each new country proposed, underlining that the key driver for the government is income. The most contentious country on the list is the United States which lost its data adequacy ruling with the EU when Privacy Shield was struck down by the European Court of Justice. The court deemed that US law fails to protect European data in line with the GDPR. The impact to businesses Organizations will be able to transfer personal data collected from UK residents to an expanded list of countries without the need for a transfer mechanism. Organizations will have to continue applying EU cross-border transfer requirements for personal data collected in the EU and stored in the UK. For countries that do not appear on the list, the UK Information Commissioners Office (ICO) started a public consultation on the new international data transfer agreements (IDTAs) that will replace the EU standard contractual clauses (SCCs). Once in place organizations will have to juggle two sets of paperwork: SCCs and IDTAs depending whether the data is collected from EU residents or from UK residents. If the UK diverges too far from the GDPR it may lose its EU adequacy ruling (granted in June 2021) which is due for review at the two-year mark. This potential risk will cause many organizations who rely on the ruling to store personal data in the UK to transition to EU storage, further impacting the UK cloud business which has suffered substantially following BREXIT. The impact to UK residents As UK residents, we will have to wait and see the full government proposal intended to replace the DPA. But given that the government has green-lit transfers to countries that the EU has specifically restricted indicates that UK residents will be getting diminished privacy protections under the new legislation. Many will be looking to the ICO for guidelines detailing the operational criteria and associated oversight that will accompany these changes.
31.08.2021 08:07
Know What I&O Skills Are Essential For The Future
With the changes that continue to be brought about by technology trends and the pressures from Covid, it is important to look ahead to understand what skills are most important for the success of infrastructure and operations teams. Gartner sees these as falling into five main skill and competency categories (Figure 1). To learn more details about the specific skills that underpin each of these categories, take a look at the recently published Gartner document, Fortify These Five Essential Employee Skills Categories for Infrastructure-Led Innovation. As the title suggests, this publication is about more than just filling job slots.  Its really about ensuring that the right skills are in place to lead with innovative solutions to today's challenges.  After all, that innovation is what organizations need to thrive in the digital business world, and that is what Gartner is here to help achieve.  
31.08.2021 08:05
Revenue Data Leads the Way to Sales and Marketing Alignment
[caption id="attachment_174" align="alignnone" width="600"] Photo by ev on Unsplash[/caption]   There are many strategic and tactical elements of the revenue process that bring sales and marketing together to collaborate and improve overall results, but where does third-party data fit into the mix? We are in the process of researching vendors in the Revenue Data Solutions market, which includes a variety of third-party data types and capabilities. Each one of the data types provides an opportunity for collaboration between sales and marketing leaders. Revenue Data Solutions start with contact and company data because these are the basics needed for marketing and advertising campaigns and outbound prospecting. While the sources and the quality of this data has changed, the basic idea of it has not changed much from the pre-digital era when companies would buy mailing lists, phone numbers or even those "I'm interested" lists from the checklist cards in trade magazines. In many cases the capabilities of these vendors are merely digital versions — or even automated versions — of functions that have always occurred in revenue teams, but some of the data types are things that have never existed in a non-digital world. It is critical for sales and marketing leaders to understand each data type so they can develop a strategic approach for usage in their organization. This is especially true as these data types can provide a direct path to sales and marketing alignment.  Revenue Data Types Contact (Demographic) Data: The profile information about suspects, leads, prospects, customers, buyers, unknown and known visitors that can be used to clean, enhance and append individuals listed in the system of record. Alignment Recommendation: Sales and marketing leaders should review lead qualification definition to identify the most likely prospects to pursue and the characteristics or data fields that are most helpful in prospecting. Company (Firmographic) Data: The information about companies and their attributes that help revenue teams create ideal customer profiles and target account lists.  Alignment Recommendation: Sales and marketing leaders compare their insights into an organization's best customers to guide targeting and building pipeline. Hierarchy and Buying Group Data: The interconnected structure of companies and their subsidiaries, organizational structure and buying groups that can be used to identify pockets of interest and authority, as well as determining buying group patterns that can lead to group consensus. Alignment Recommendation: Sales and marketing leaders need to both understand the company structure and buying group structure so marketing's aircover campaigns and content align with sales' prospecting. Purchase Intent Data: The specific topics or keywords that are of current interest to companies based on information consumption behavior and other factors. Alignment Recommendation: Sales and marketing leaders should review the information options available to prospects and customers both on their own properties and across the broader web to identify patterns of information and to create additional content. Technographic Data: The company information about technology that is installed, what the current technology budgets is and how many computers are in server rooms and on employees’ desks that can be used by technology companies to understand a competitor's footprint. Progressive organizations can use technographics to understand prospect maturity and growth patterns. Alignment Recommendation: Sales and marketing leaders can confirm competitors from won-lost analysis to support future prospecting and messaging. Relationship Intelligence: The data to provide insight on internal and external network connections to a target contacts and accounts, in order to enhance engagement outreach efforts. Alignment Recommendation: Sales and marketing leaders should look within and beyond their own organization to locate connections to enhance prospecting opportunities. Market Intelligence: The relevant news feeds, blog posts, company/contact and market insights that are available within the CRM or sales engagement platform. These environmental indicators show when to reach out to a prospect or customer. Alignment Recommendation: Sales and marketing leaders need to collaborate on developing sources for specific campaigns that support prioritizing prospecting. Whether sales and marketing leaders are specifically reviewing vendor requirements for Revenue Data Solutions or just identifying means of collaboration, the benefits of the two functional leaders working together will have measurable results.
31.08.2021 03:52
A Measured Approach Rarely Works in Times of Great Change
One of my favorite things to do is to look at the results of our various studies by Enterprise Technology Adoption (ETAs) profiles.    Since we know that ETAs tell us a lot about how, why, and when organizations buy, the insights as you explore different areas of decisions and different people within organizations is often revealing. This weekend, I did just that.   First, I went back to the study we conducted earlier in the year, where we focused on the volume of buying activity.  In that study, we asked some questions about the impact of the pandemic on decisions and decision approaches. By a fairly large margin, our two profiles that are measured in pace of change, and a third that behaves very similarly were the most likely to say they maintained their business and technology strategy through the pandemic (remember the attributes relate to planning in regard to having a strategic technology plan that guides decisions, control, and pace of change): ACR (Accommodating, Collaborative, Responsive) - 67% FCM (Flexible, Collaborative, Measured) - 65% ABM (Accommodating, Business-Led, Measured) - 63% All there of these groups were also the least likely to say that the pandemic has sustainably changed their approach and behaviors with regards to technology. [caption id="attachment_2873" align="aligncenter" width="900"] Source: Pixabay on Pexels.com[/caption] When we saw this earlier this year, it was somewhat interesting, but when we combine it with some the results from the user study I mentioned last week, it becomes very revealing.  I'll soon be publishing research on this specific area, but here is the high level view.  We asked users (could not be at a managerial level or higher) about whether they had the tools they needed to collaborate virtually and work effectively when remote.   Guess who has the lowest percentages? Work remotely: ACR 31% FCM 36% ABM 37% Collaborate Virtually: ACR 25% ABM 29% FCM 33% Users in these orgs in these profile groups were also the least likely to feel that their company culture supported the idea of collaborating with technology.   We'll have other studies later this year that should reveal how organizations performed relative to their peers in  the past year.  I've got a strong hypothesis that these three profile groups will have the lowest percentage of companies that are outperforming their peers. The moral of my story are that there are times when taking a measured, methodical approach is valuable, even critical.  But in times of great change, you have to accept more risk and adapt quickly.   It is highly likely that dynamic organizations are extending their lead, giving them some space where even if they lose focus for a bit (like the hare and the tortoise), their competition is unlikely to catch up.    For example, where do you think people would rather work?  An org that gives them the tools and the cultural support for remote work and collaboration or a company that lags in those areas. It's time to move away from measured, by bringing some decision making discipline combined with learning decision making best practices, so that you can move faster without increasing risk significantly.   The path forward is clear for those willing to take it.
31.08.2021 03:42
A Lesson in Brand Strategy From Volkswagen Group
For auto brands, Instagram remains an efficient vehicle to deliver brand messages and content that drive audience discovery and engagement. The sector consistently offers new technology and innovation, as well as images that feed user self-perception of status and differentiation. These are all useful tools in the race to win attention online and execute brand strategy. Given this, the performance of Volkswagen Group brands on Instagram stands out (see Figure 1). Figure 1. Auto Brand Instagram Posts and Engagement [caption id="attachment_162" align="aligncenter" width="720"] A bubble chart shows auto brand instagram posts and engagement between April 2020 and March 2021[/caption] At first glance, the data confirm that luxury and ultra-luxury brands, like Porsche and Lamborghini, are built for the social media spotlight. Luxury shoppers and brand evangelists covet them for their performance and prestige. They are status symbols that catch wandering eyes and likes, which leads to above-average per post engagement and reach.  Diving a little deeper, we also see that Volkwagen Group's collective Instagram performance illustrates how even companies with broad brand portfolios can achieve collectively high engagement. The impressive performance of widely varying brands, like Audi, Lamborghini, Bugatti, Bentley, and Porsche is fairly precise. I don’t believe that this is a chance occurrence, but something that happens by design.  Volkswagen Group's Brand Strategy “Playbook” Volkswagen Group’s global brand strategy, which was outlined in a company meeting in December 2020, helps us connect the dots between social media performance and systematic brand management. According to Dr. Christian Dahlheim, Volkswagen Group’s Director of Group Sales, this “playbook” serves as a common language that teams across the business use to amplify awareness and drive desired brand-product associations. It also provides a framework for agency partners and other third parties to reference as they write creative briefs and develop advertising campaigns. Here are the main points: The definition of brand vision, mission, and values is the "homework of good marketing." The idea here is simple: Investments in brand creation and awareness are wasted when brand messages and value propositions are inconsistently used. This puts brand positioning on a shaky foundation. A lack of clarity on what a brand stands for at a global level creates noticeable disconnects across markets and messaging channels. While Volkswagen Group brands drive this forward, the company's global brand governance framework keeps people and teams aligned. This ensures that brands speak with a consistent tone of voice across digital channels and campaigns. Clear brand positioning guides customer-centered product design. This is something marketing leaders can't afford to get wrong. For example, ensuring alignment of brand-to-product messaging can help shorten sales cycles. When customers understand what it is they're going to buy they can more quickly say, "yes" or "no." Similarly, consistent brand-to-product messaging can also improve conversion on cross- and up-sell opportunities. When customers understand how a brand’s products work with or differently from one another the buying decision is simpler.  Volkswagen Group Also Connects Brands to Customer Segments and Profit Pools One critical concept sits atop the company's brand strategy pyramid: customer segments and profit pool potential. This has less to do with messaging strategy and more with business strategy. Volkswagen Group assesses brands for their potential to drive profitability, not just revenue. Profitability-centered brand assessments help business leaders see where their brands should go next as industry, competitive and customer landscapes evolve.  Today we anticipate most auto brands will soon apply this concept to strengthen unique selling propositions around electric vehicle technology. This is because EVs have incredible potential to shift brand positioning to capture premium prices and shopper segments. In the future this concept may explain some of the Automotive-Aerospace and Defense industry crossover activity we're observing, like -  Virgin Galactic's partnership with Land Rover Blue Origin's Rivian "Rocket Taxi," Tech and software sharing between Tesla and SpaceX, and, most recently, Porsche SE's (Volkswagen Group's owner) $75 million investment in German rocket startup, Isar Aerospace. These undeniably attention-grabbing partnerships are, however, largely siloed from the day-to-day brand building and marketing messaging focused on selling more cars right this minute. The rest is a de facto afterthought. Ultimately, many of the marketing teams we speak with are so focused on what their brand produces or means today that they often forget to think about what it could mean in the future as their product portfolio evolves. As transportation industry leaders work to effectively build strategic marketing plans Volkswagen Group’s brand strategy “playbook” should serve as inspiration. It points toward a path for future profit sources and the understanding that growth today isn’t a guarantee of growth tomorrow. [caption id="attachment_163" align="aligncenter" width="719"] What's driving your brand strategy forward?[/caption]
30.08.2021 10:36
10 Innovative Blockchain Areas to Watch; Gartner Webinar
Gartner colleagues Whit Andrews Homan Farahmand Martin Reynolds Scott Smith and I recently hosted a Gartner webinar that was especially lively thanks to the constant flow of great questions from a highly inquisitive audience.  You can listen to the replay here: The Opportunities and Challenges Surrounding Blockchain Enterprise interest in blockchain is alive and well as some 450 attendees participated on a mid-August day.  The stimulating session points to a bright future for blockchain innovation. While three fourths of organizations are trying to figure out the relevance and usefulness of blockchain, a full 11% already employ blockchain today. See Figure 1 below for results from our informal webinar poll. These percentages are consistent with past formal Gartner surveys of CIOs and Blockchain Consulting and System Integration firms. 10 Key Areas of Blockchain Innovation  Much of our panel discussion highlighted the important role of blockchain innovation, which we categorize here into ten main areas. These are key to future maintream adoption of blockchain, and the integration of centralized services with decentralized applications: Analytics and Intelligence for on-chain and on/off chain data: for various use cases ranging from system performance, smart contract behavior, anti-money laundering, forensics, security monitoring, fraud detection and customer analytics. Sample vendors: Metrika  (performance) Valid(smart contract behavior), Chainalysis, Ciphertrace,Elliptic, anchain.ai (Blockchain analytics and forensics for multiple use cases such as anti-money laundering, law and tax enforcement, user behavior analytics, and more) NFT Markets and Data; NFT marketplaces: Opensea Rarible NFTs and community (coins) for influencers, e.g, musicians, athletes Nft.Kred   NFT data, e.g. Genome data Nebula  new forms of NFT asset based securities, securitized debt;  Drops NFT platform; Persistent storage ecosystems: Arweave Filecoin CeDeFi Services and Products driven by centralized companies wanting compliant protected access to DeFi: Sample vendors: AllianceBlock Bcware  Templuminc   Ciphertrace Defi Compli Tokenization of Real World Assets driven by new forms of liquidity and yields; Sample vendors: Fortunafi  Centrifuge    Legal issuance: DLA Piper Toko Blockchain Data Security and Trust; driven by ESG; for oil and gas sector – DataGumbo  Context Labs Institutional Custody for Digital Assets, including wallets – driven by access to new digital financial products and CBDC evolution Sample vendors: Fireblocks Metaco Trustology Trustverse Curv Retail Wallets (some with innovative ‘consumer friendly’ security protocols) driven by access to new digital financial products and CBDC evolution: Sample vendors/products: Conio  Metamask Decentralized Identity Services (with centralized identity issuers); driven in part by financial inclusion, verified credentials, and access to credit; Sample projects  Kiva Credit Bureau of the Future in Sierra Leone , Cardano National ID Blockchain in Ethiopia Blockchain Integration and Abstraction Middleware; Decentralized Oracle Networks (Hybrid Smart Contracts), Token Bridges. Sample products/orgs: Chainlink Api3  Lithium Enhanced Blockchain as a Service; supporting multiple clouds, multiple protocols and services for applications, and interoperability between blockchains and legacy systems. Consensys  Kaleido  Settlemint Simba Chain It’s a lot to keep up with as innovative blockchain projects multiply to support on-ramps, off-ramps, bridges, interoperability, integration, secure off chain computing, secure persistent storage,  abstraction layers, analytics, user interfaces, and more.  These products and services will support new forms of assets, commerce, trade, trustworthy contracts, authenticated data, social structures, and democratized governance mechanisms. From a developer point of view, these represent a lot of new components to keep up with. But that just means there are a lot more capabilities developers can imagine, build and deploy. Web 3.0 and the decentralized Web really is a major leap forward.  Given the plethora of existential problems we all face today, it represents one bright path out of them. _______________________________________________________________________________________________________________ Figure 1: Blockchain Adoption amongst Enterprises today Figure 2: Personal Knowledge of Blockchain Technology
30.08.2021 05:00
Walled Gardens Flourish As Data Privacy Efforts Take Root
Marketers can’t rely on user-level identifiers like they used to. Sparked by global privacy legislation (e.g., GDPR, CCPA) and consumers’ growing demand for greater ownership over their digital identities, device makers, web browsers and ad tech giants are making efforts to advance data privacy for internet users. While these advancements empower users, they adversely affect digital advertising efforts.  In particular, three major developments are upending digital marketing teams’ ability to track and target users across websites, channels and devices: Third-party cookies crumble. Google Chrome—the world’s most popular web browser—plans to phase out the use of third-party cookies in late 2023, following in the footsteps of Safari and Firefox.  Apple restricts the use of device identifiers. As part of its iOS 14.5 update, Apple’s AppTrackingTransparency framework requires third-party app developers to prompt Apple device users to opt in or out of all app-specific targeting or tracking.  First-party cookies have a shorter shelf-life. Apple’s 2.3 update to its Intelligent Tracking Prevention automatically deletes first-party cookies from a user’s Safari web browser after 24 hours. This curtails efforts by some ad tech platforms that rely on first-party cookies as cross-site trackers on Safari in lieu of third-party cookies. In response to these data privacy disruptions, marketers are placing more of their advertising dollars within “walled gardens” — giant, consumer-facing digital platforms such as Google, Facebook and Amazon. Top brands in Gartner’s Digital IQ: Advertising Benchmarks for 2021 have significantly increased investments in walled garden publishers both to prepare for the changes and test performance on these growing channels. Together, Google, Facebook and Amazon constitute nearly two-thirds of total U.S. digital ad revenue. In Exchange For Reliability, Marketers Relinquish Control Walled gardens attract marketers due to their abundance of owned and constantly updated first-party data. Marketers can use proprietary advertising tools found on these platforms to deliver and measure targeted, brand-safe ads to users with reduced risk of privacy compliance violations or other customer data blunders. However, in exchange for greater safety and reliability, marketers relinquish transparency and control. Brands are completely dependent on how these closed ecosystems measure and interpret advertising performance, making it difficult to understand and compare campaigns outside their walls. While marketers can leverage these platforms’ advanced targeting features to run highly-sophisticated ad campaigns, they can only get an aggregated view of campaign performance as walled gardens preserve the integrity of their users’ privacy. In short: data that resides within these walls stays there. How are marketers adapting their advertising efforts within the walls of Google, Amazon and Facebook? Our upcoming research report, titled, “Brands Retreat Behind Walled Gardens As Data Privacy Efforts Take Root” will explore the themes and tactics top brands are using to advertise on these platforms. It will also explore how brands are exercising media mix agility and exploring lesser-utilized platforms, such as Amazon-owned Twitch.  Gartner clients can also read Gartner’s Google to Drop All the Cookies, but Hold the Cards and Apple Upsets the Digital Advertising Cart to maintain a pulse on ongoing data privacy disruptions and learn how to adapt their digital advertising efforts accordingly.
27.08.2021 03:05
Sales Leaders, the Reinvention of the Workplace is In Your Hands!
VP Analyst, Dave Egloff and I recently published a deck that boiled down the broader conversation Gartner is having across functions on the Future of Work Reinvented for our Sales Leadership clients. The aim was to shine a light on the pieces of the model that we felt had higher relevance for CSOs and their teams: Digital Enablement, Rethinking the Workplace, and Shifting Talent & Skills.  Workplace Strategies in Focus: From Gartner's 2020 B2B Digital Commerce Survey, it became clear to us that in just a few short years, B2B sales interactions will occur within digital channels the vast majority of the time (forecast 80% by 2025). In an even shorter span, more than half of procuring organizations (buyers!) will conduct even complex purchases through online channels (59% by 2023). As a result, commercial leaders must make plans to prepare their teams to sell (and address their desire to sell) in a potentially foreign environment where digital-first skills and behaviors become much more valued. As the Great Resignation continues to develop, we'll surely find that large portions of existing field, inside, and virtual sales teams will seek greener pastures.... many as a result of a lack of ambition to adapt their tenured selling style to a digital world. This trend will be even more pronounced if their organizations and leadership do not take action quickly to increase their ability to adapt through more appropriate tools, resources, data, and training.   Digital Enablement: Optimize work through technologies and practices to improve the short-term transition and to promote longer-term prosperity.   Thus, in order to enable our selling teams digitally (including indirect partners!!), we'll need to: (Re)Map the digital customer buying journey Invest in better data and tech to facilitate new behaviors Create consistency across the digital footprint of the organization with Sales actively participating Go beyond the standard Zoom/WebEx/Teams videoconferences to more interactive, collaborative, and asynchronous collaboration venues... like Digital Sales Rooms!     Rethinking the Workplace: Help leaders create a workplace strategy for the postpandemic, hybrid work era. Obviously, as leaders of selling we'll need to think about a more hybrid physical workplace for our teams... at least in some cases. But, possibly more importantly, we'll need to consider those factors for our customer stakeholders as well... and figure out how to make buying easier with hybrid buying groups researching and decisioning independently, asynchronously, and virtually more often than not. So, the decisions before sales leaders here revolve around: Reassessment of the ROI of seller travel Territory design with new low/no travel assumptions and rep-free purchasing Capacity/sizing constraints and updates Buyer engagement models based on highly varied co-location of purchasing groups     Shifting Talent & Skills: Analyze the skills and competencies employees will need in the digital future and how enterprises can acquire or train workers in these skills. Lastly, sales role competencies must evolve to meet the buyer preferences for digital interactions we are observing. Sellers need greater confidence in technology utilization, sense making behaviors, and addressing nuanced thinking with greater grasp of buyers' context. To accomplish this, a focus on 'must have' skills such as digital dexterity, data literacy, and virtual customer engagement would be highly beneficial when considering investments in enablement and training. Competency models, job descriptions, hiring guides, development plans should be updated accordingly. Managers' approaches to hiring, onboarding, and coaching will need to conform with the times. Performance management and compensation/incentives will need to be brought into alignment.   The moral of the story here is, as leaders of selling in a new hybrid workplace requiring digital prowess... we've got a lot to talk about!  The best start is to get these concepts in front of your teams and gather their perspectives on where the biggest gaps reside.   Gartner clients can download the associated research deck here:  The Future of Work Reinvented for Chief Sales Officers
25.08.2021 11:20
Do you handle personal information in China? You're probably going to have to change your approach
It’s no surprise that China’s personal information protection law (PIPL) was coming. A shiny new set of rules, similar to the GDPR, meant to govern how personal information collected in China is to be handled. On August 20th the National People’s Congress passed the PIPL which then enters into effect 73 days later on November 1st. If your organization processes personal information collected in China either as a first or third party, that is when you will be expected to comply. The Good News The PIPL is similar to the GDPR, it’s nowhere as comprehensive and we expect it to be heavily supported with ongoing guidance from the regulatory bodies. But if you’ve taken the last few years to put in place a comprehensive privacy program, associating processing activities with one of the six legal bases outlined within the GDPR, then you should be in a good position to tackle the PIPL. The Not So Good News Though similar, the PIPL is not the GDPR. Processing data as part of a contractual or legal obligation is supported, BUT critically, the concept of “legitimate interest” continues to be absent, which means that most processing of personal information will have to rely on informed consent. Furthermore, even in areas where you have a legal basis other than consent, consent would still be required if the processing involves: sensitive data, cross-border transfer of data or sharing data with third parties. Note: China has always adopted a consent-first model, the PIPL cements that approach moving forward. What about data residency? The cross-border transfer of data from China in most instances will require consent from the data subject. Organizations that process a certain volume of personal information, a volume yet to be determined by the Cyberspace Administration of China (CAC) must store the information exclusively in China. If the exporting organization can demonstrate that it is “necessary” to transfer the data outside of China, they will have to undergo a security assessment process to be defined by the CAC. The “necessity” exemption is potentially there to allow for international banking and similar activities to take place, activities that would otherwise be impossible. What next? Consent and preference management is going to be the linchpin for any processing of personal information in China. Whether your choice is to build or buy, if your organization processes or plans to process personal information in China, investing in consent and preference management capabilities should be your top priority. For further detail review the Market Guide for Consent and Preference Management Regarding the data residency requirements, consent is not a viable path forward for cross-border transfer, and the exemptions from consent will apply to only a few use-cases. Organizations should budget for localized governance and technology in China as part of market entry or market expansion.
25.08.2021 10:15
Evolutionary Changes for Gartner’s Healthcare Supply Chain Top 25
Gartner has revised its methodology that guides the process of assessing organizations in the Healthcare Supply Chain Top 25 for the United States market. This new methodology reflects our changed focus from across all of healthcare supply chain to only health systems. Your initial reaction might be, “Why is Gartner making this change?” Since 2009, Gartner has kept the Healthcare Supply Chain Top 25 Ranking much the same. But 2021 is different. Changes in the world of the healthcare supply chain and its place in the global, all-industry supply chain mean the time is now to evolve and make some changes. The main change is that we are moving our Healthcare Supply Chain ranking to an all healthcare provider ranking for 2021 and beyond. And while the focus has shifted to health systems, the goals of the Healthcare Supply Chain Top 25 remain the same (see Figure 1). We are not making this move lightly. There are three primary reasons why we are making this change.   First, the healthcare supply chain has made progress, and we desire to add more health systems to our ranking. Many are larger through mergers than ever before and the maturity of this group has improved since 2009. Second, there is greater recognition of life science companies in our global Supply Chain Top 25 ranking, with four companies making the global ranking in 2021 versus only one in 2009. Third, with the growing number of life science companies in the global ranking, we want to reduce confusion between the Healthcare Supply Chain Top 25 and the Global Supply Chain Top 25, in terms of companies included and the methodology used to rank them in each study. The following are specific methodology changes for the Healthcare Supply Chain Top 25: Our focus going forward will be 100% on health systems in the United States. Manufacturers, distributors and retailers with above $12 billion in revenue will still feature in our global Supply Chain Ranking (see The Gartner Supply Chain Top 25 for 2021: Masters, Top 25 and Industry Leaders - available to Gartner Supply Chain clients). We are expanding the group of healthcare providers in the ranking from 72 to 171 by removing the qualification that a health system has to be in the top three quintiles of the IBM Watson Health 15 Top Health Systems Study. We will keep a minimum operating expense target of $2 billion for the health systems. Overall, this allows more health systems to be ranked. We will increase the weight of the IBM Watson Health 15 Top Health Systems Study ranking — rising from 15% to 20% for 2021 — based on our increasing belief in the connection of the supply chain to the quality of care. Offsetting this increase will be a small decrease in the peer and analyst opinion component to 32.5% each, respectively. The Healthcare Supply Chain Top 25 ranking continues to be based on a combination of quantitative data and opinion data. The quantitative data gives us an objective basis, on top of which we place the community peer vote component. We made a number of changes to the Healthcare Supply Chain Capabilities Model that guides our peer and analyst opinion. This model was last revised in 2016. It’s a good time to reflect on any changes. The focus has narrowed to health systems, and there are areas where we made additions or weighted certain capabilities differently. Big changes include increasing the emphasis on “effective governance” in terms of foundational capabilities, along with the addition of “digital supply chain” to that section of the model. Two other highlights: there is a revised and increased focus on “resiliency and/or risk management” in the network visibility section; “environmental, social and governance (ESG)” has been added to the section that focuses on collaboration. Continued focus on collaboration in the healthcare supply chain We did not want to lose the opportunity for peers and analysts to recognize “healthcare trading partner collaborators in the U.S.” Highlighting the interconnected, interdependent nature of the healthcare supply chain is still a primary focus of our efforts. While these manufacturers, distributors and retailers will no longer be formally ranked, we will be more directly highlighting those organizations that collaboratively support the mission of “improving human life at sustainable costs.” This collaborator designation also allows us to recognize privately held companies and/or companies where the primary business is not healthcare but that have a large healthcare division. Since making this announcement in late July, it has mostly been met positively. We will be able to recognize more U.S. health systems and eliminate any confusion for life science companies that were in both the Global and Healthcare Supply Chain Top 25s. I’m glad to answer any questions at eric.odaffer@gartner.com. Eric O’Daffer VP Analyst Gartner Supply Chain
24.08.2021 11:00
How Much Power Do Users Have?
Gartner's research into business technologists and the distribution of technology related budgets highlight just how much the power over technology purchases is shifting and spreading.   But what about users? By users, in this case, I'm referring to the people who work in organizations that are not in positions of power (e.g. workers, not managers and executives).  Certainly, we've seen a growing emphasis on user experience, but there are times when vendors make the case, "Users don't make decisions," when justifying investment choices that lean in other directions.   At the same time, we are seeing more and more evidence of the user of trials and freemium products as a way to build toward a deal.   If you think about it, most of these would be evaluated by users. [caption id="attachment_2868" align="aligncenter" width="900"] Source: Photo by cottonbro from Pexels[/caption] With this evidence in hand, we wanted to explore if users truly have influence, power, or involvement in software decisions.   To do that, we conducted a study that was focused entirely on non-managerial workers in organizations.   The results have come back and are painting an interesting picture that the Gartner team will be sharing over the coming weeks and months.  These are no longer a generic, unimportant set of constituents. Some of the ideas we'll explore: How do users exercise both direct and indirect influence on software deployments (where indirect might be encouraging others to reduce usage when frustrated with the experience) How do organizational dynamics, like Enterprise Technology Adoption profiles, influence user's desires and actions related to software decisions Do all users matter?  Or can we segment users into various groups that reflect their likelihood of exerting influence directly and indirectly. What drives users to pursue free products and how often does it turn into paid purchases? This is just a subset of the insights that we are developing.  There is a lot there. But if I was to tease anything, I think it is this.   As power and influence over technology continues to spread throughout the organization, the voice of the user will continue to grow.    Savvy vendors will cultivate those voices and target programs to the users that are most likely to influence decisions to build the bottoms-up support that can be critical to successfully expanding deployments, even as they continue to work the top down path. As a side note, this work brings back reminders to some of my earlier research and interactions related to advocacy marketing.  I had quite a few clients question the value of advocacy programs since they were, in many ways, likely to be more attractive to users than decision makers.  At the time, I suggested that the user support would be high value and they should think about how to cultivate that while also having programs for traditional decision makers.   The current research convinces me that was the right path. Stay tuned, and above all, don't discount the influence and growing power of users.
24.08.2021 03:37
“Amazon Vehicles” Represents a Unique Advertising Opportunity for Auto Brands
At first blush, Amazon.com may not seem like an obvious choice for automotive marketers to spend their advertising dollars on. Afterall, you can’t buy cars through Amazon’s online marketplace — so why bother?  Because Amazon possesses a robust community of car shoppers, enthusiasts and experts sharing their experiences and opinions on Amazon’s growing Vehicles community. First introduced in 2016, Amazon Vehicles is quickly becoming the research destination-of-choice for many car shoppers. Flush with specs, customer reviews, pictures, suggested retail price and more, car shoppers can research various car models on pages that mimic Amazon’s traditional product pages.  These pages also give users the option to add vehicles to their Amazon “Garage” — a feature that allows car owners to find and purchase compatible car parts and accessories sold through Amazon or interact with fellow owners. Some Amazon Vehicles pages also come equipped with a call to action that take users off of Amazon and onto the automaker’s owned web property to advance prospective customers along their customer journey (see Figure 1). Figure 1. Amazon Vehicles Page For The 2021 Nissan Frontier PRO-4X Given that the majority of online product searches begin on Amazon.com (source), and with the deprecation of third-party cookies pushing more advertisers within the confines of walled gardens, Amazon Vehicles represents a unique marketing opportunity for automotive brands seeking to drive brand awareness. For example, automakers such as Ford, Toyota and Volkswagen have all placed a series of static display ads on Amazon’s Vehicles community (see Figure 2).  Figure 2. Amazon Vehicles Display Ads from Automakers While many Amazon Vehicles display ads bring users to the advertised vehicles’ respective Amazon Vehicles page, some brands take it a step further. For instance, Ford’s 2021 Mustang Mach-E Amazon Vehicles display ad takes users away from Amazon Vehicles and onto a special Amazon.com landing page for the car model. Featuring a unique layout, this landing page provides shoppers with a series of branded video content with more information on the unique features of the all-electric vehicle. The page also contains calls to action that direct users off of Amazon and onto Ford’s owned web properties (see Figure 3). Figure 3. Amazon Landing Page for Ford’s 2021 Mustang Mach-E As automakers pivot their advertising efforts away from sales and discounts amidst supply chain disruptions, Amazon will continue to serve as a unique outlet to drive brand awareness and consideration for automakers.  At the very least, automakers should maintain a pulse on moves Amazon is making. As the world’s largest online retailer propels its digital commerce dominance to new heights, it continues to explore brick-and-mortar opportunities. For example, Amazon has recently — and without much fanfare — unleashed a national grocery store chain (“Amazon Fresh”) amidst the height of the pandemic. There are also some speculations that the retail giant plans to open several large department store-esque locations across the U.S. as many retailers are still buckling under the weight of the global pandemic (source). To read about another unique marketing opportunity, head over to Kyle Rees’ blog post, where he comments on Ferrari’s joy ride in the metaverse. Learn how automotive brands are recalibrating their marketing efforts against a backdrop of microchip shortages, logistics nightmares and more, be sure to check out Gartner’s upcoming Digital IQ Index: Auto, 2021. And don't forget to register for the live Webinar on September 22.
23.08.2021 09:39
The Greatest Sales Risk is the Great Resignation
If you tune into many media outlets, you’ll inevitably hear about “The Great Resignation.”  This term describes the mass exodus of employees leaving their current job.  According to the US Department of Labor, June had over 10 million jobs created and nearly 4 million professionals quit their job.  It’s fair to say that the labor market is tight.  And, there are many reasons why this environment is likely to persist. For sales leaders, the Great Resignation is not so great.  Moreover, this might be their biggest obstacle to meeting their goals.  Unfortunately, many sales leaders recognize this risk but haven’t calculated the magnitude of its impact.  Let’s explore the explicit and hidden costs of sellers leaving. Explicit Costs of Sales Turnover Based on Gartner's research, the average cost of a departing employee is nearly $19k.  While this isn’t specific to sales, it should provide a quick order of magnitude on the direct impact on your organization.  Hypothetically, if you have a sales force of 100 sellers with an 18% turnover, that’s a $335k consequence.  For sales organizations, the math gets much trickier when you factor in hidden costs. Hidden Costs of Sales Turnover Hidden costs are those dollars at risk before you even recognize you have an issue.  Specifically, there are three sources of hidden costs: Disengaged sellers – i.e., sellers wanting to leave or looking at other organizations. Note, even if your sellers aren’t actively looking, recruiters are working to get their attention. Under-served buyers in the open territory – i.e., the revenue risk associated with buyers and prospects in unassigned territories or books of businesses. Certainly, sales leaders will leverage other sellers and managers to support open territories, but those individuals are likely at full capacity with their current work.  Managers, in particular, are likely to be well over-capacity as they add hiring activities to their already full plate. Onboarding sellers – i.e., sellers who have been hired but are still learning how to execute in their new organization. Gartner's research shows that the time to onboard sellers has been steadily growing.  Interestingly, the most common response to the time to full seller productivity was 7-12 months. These hidden and opportunistic costs are difficult to monetize in dollars as it varies by an individual’s performance, role and business model.  Instead, it may be easier to approximate the costs in terms of months – let’s call it Turnover-Related Risk in Seller Productivity Months.  To calculate this metric, consider: The average turnover The estimated productivity lost due to disengaged sellers The number of months it takes to backfill The onboarding of sellers Calculation Illustration:  Turnover-Related Risk in Seller Productivity Months For this calculation, let’s assume 100 sellers and a turnover of 18% (which is somewhat typical, but admittedly varies by role and industry).  Here are other assumptions: Pre-turnover distraction = 2 months per seller Pre-turnover productivity loss = 25% Time-to-backfill = 2 months Seller onboarding = 8 months with the following productivity build: 0% productive for 3 months 50% productive for 3 months 75% productive for 2 months Based on these assumptions, the turnover-related risk in seller productivity months is 7 ½ months per turnover.  That's to say that every seller leaving costs the sales leader 7.5 months of productivity.   When compared in the aggregate, 7.5 months across 18% turnover equals 135 months. This is 11% of the total months.  Therefore, in this case, the sales leader has an 11% risk due to voluntary turnover.  That’s significant. Sales leaders must not be a victim to this circumstance.  Seller turnover is bound to happen but it can be mitigated, especially for strong performers.  Most leaders already see this as an immediate risk.  No one should be surprised by what’s coming.  Sales leaders must not be defensive and reactive.  They must turn offensive and proactive.  For more information on how to do that, see Attracting and retaining top sales talent.  
23.08.2021 09:00
Sales Tech Mayhem: More Unicorns, Sales Enablement Mayhem and New Entrants
This post has been co-authored with Dan Gottlieb The Sales Tech Mayhem action is fierce. August 2021 alone saw the announcement of 2 new unicorns and an acquisition. Our last post on the market was only a couple weeks ago and we already have 33 more bullets. In the era of Sales Tech Mayhem, if you turn your head for a minute - you will miss something big. To recap: Sales Tech Mayhem is the current period which started roughly a year ago where the sales tech market has begun rapidly moving from a wide set of categories into a narrow list of vendors with wide portfolios of capabilities. This mayhem is likely to continue over the next couple years. We defined Sales Tech Mayhem in a lot more detail in our last post 39 observations from a scorching hot tech market and our research note Impact of ZoomInfo’s Acquisition of Chorus (Gartner subscription required).  Sales tech is not all unicorns and acquisitions. There has been some very interesting early stage activity adding to the Mayhem of which we will cover below and in coming posts.   Here we go: Sales Tech Mayhem Exhibit A: The unicorn list just grew again In the 2 weeks since our last post, 2 new unicorns were publicly announced. People.ai announced a $100M Series D putting them at a $1.1b valuation. Mindtickle raised a $100M Series E putting them at $1.2b valuation. That increases the unicorn number of 6.5 to 8.5. 8 sales tech unicorns ($1 billion-plus) valuations — Outreach, SalesLoft, Gong, HighSpot, Seismic and Clari and now Mindtickle and People.ai. Why 8.5? 6Sense is a Martech unicorn aggressively moving into cross-functional capabilities, that is, focusing on sales. Unicorns doing what Unicorns do Along with the new unicorn raises listed above, current unicorn Seismic announced $170 million Series G putting them at a $3b valuation. They didn’t just raise money, they announced the acquisition of sales training/readiness vendor Lessonly. This will not be the last big raise. In Sales Tech Mayhem, the term “raise” has truly taken on a poker meaning. We expect other sales tech vendors to “call” that $3b valuation and “raise” another $1b in valuation (or more). Nor will this be the last acquisition, M&A activity is clearly a/the major contributor to sales tech mayhem. Speaking of poker, our bet is by the time our next Sales Tech Mayhem post comes out in the next couple weeks, there will be either a raise or acquisition (probably both). Sales Enablement Stack Mayhem  Gartner estimates that revenue in the sales enablement market came to $1.7 billion in 2020, an increase of approximately 12.1% over the prior year. Relative to the overall category of sales, which was down to 10.9% growth, sales enablement is a high-growth segment within the overall sales category. Both data points above via Market Guide for Sales Enablement Platforms (Gartner subscription required). There are now 4 unicorns in the sales enablement market alone. 3 unicorns in the sales enablement platform space - Mindtickle, Highspot, and Seismic. Conversation intelligence has been a game-changer for sales enablement so Gong makes it 4. That is mayhem. And the drivers for more buying are also pointing "up and to the right". The move to virtual/hybrid selling has been a key driver. 94% of organizations have invested or are considering investing in technology to enable virtual selling. That’s basically everybody. Also, the market is perpetually evaluating their tool set. 68% of organizations are inventorying their tools or technologies every year. More Mayhem is coming from the ground-up: A potential new category is blooming Venture capitalists are circling around the demo/product experience space.  As is the case with most early categories, the name of the category is still on the table. We like when you can explain the category in a few words - automation to support the delivery of the product demo both live and on-demand. We also like to see a mass of early stage vendors with VCs picking their “horses” in this race.   Early vendors in the demo/product experience space: Demostack ($13.3m Series A), Navattic ($1.2m Seed), Reprise ($17m Series A), Tourial (Seed - no $ announced), Walnut ($6mm Seed). Product story-telling is one of the key aspects here. We are crafting stories across the board - in a product-first world, the product has to be presented in a story. Great demos are really opportunities to tell great stories about a solutions' functionality. Here is the key to this market - buyers are favorable to demos. Look at the two data points below from the Gartner Technology Buying Dynamics B2B Technology Buyers Survey. 50% of buyers surveyed cite demos as one of the most valuable materials during the buying cycle.  58% of buyers cite “demonstrations” as a call to action they would respond to in a marketing campaign.  The demo/product experience market serves both “traditional” sales where the demo is a critical play in the sales process.  And the market is in position for the future where product led growth (PLG) will continue to rise. (PLG is a strategy that generates pipeline and revenue through the use and adoption of compelling product) Think about product demos delivered automagically throughout a product-led experience without talking to sales because like it or not, that is the growing preference. See below. 43% of buyers are gravitating to rep-free experiences but here is the kicker, the future looks even more product-led - over half of the next generation of leaders, the millennials, prefer rep-free. Sales Tech Mayhem rages on. See you in our next update!
Impressum: Bernard Henter, Am Flugfeld 33, 40489 Düsseldorf, Tel. +49-211-404113     Kontaktformular   2021-09-23 22:28