Put customers in the centre in 2014, urges Forrester

  • Customer experience and centricity are key success factors for enterprises in 2014
  • ICT growth in Asia Pacific forecast to grow 4%, Asean to grow 7%

Put customers in the centre in 2014, urges ForresterTHE adage 'the customer is king’ is taking on a new dimension in today’s highly competitive world and enterprises that can capitalise on going beyond traditional customer relationship management will stand to benefit the most, according to a new study from Forrester Research.
 
In its recently released Asia Pacific Technology Predictions: 2014 report, the consulting and research firm said that 'the age of the customer' is transforming market opportunities in Asia Pacific and this would fundamentally change how firms manage technology in order to become smarter, nimbler and more customer-focused.

Co-authored by Dane Anderson (pic) and its Asia Pacific team, Forrester sees empowered customers disrupting every industry where the only sustainable competitive advantage is knowledge of, and engagement with, customers.
 
“Keeping up with disruptive technology innovation powered by social, mobile, analytics, and cloud enablement is critical, but success in the age of the customer is about more than technology -- it hinges on organisations shifting their cultures, organisational structures and mindsets to win in this new era,” said the Forrester vice president and research director in his opening remarks in the report.
 
Companies that are customer-obsessed will have the best chance of success across technologies and organisational requirements, said the 18-page report.
 
Forrester noted that though customer experience is not an entirely new concept, its importance amongst enterprise leaders came out of nowhere in 2013, adding that at first, it wasn’t even on CIOs’ agendas, but it is now one of their top priorities.
 
“In 2014, we expect CIO (chief information officer) focus on customer experience to drive very rapid spending growth in this area, driven by firms seeking to differentiate themselves from their competitors by offering a superior customer experience,” the study noted.
 
Forrester said mature firms which recognise this trend acknowledge that no one person can be responsible for such a heavy portfolio and as such, would involve several internal organisations in the improvement process.
 
That said, it conceded that in 2014 most firms would still stubbornly adhere to the traditional model of having a centralised team or person responsible for all customer experience across the entire organisation.
 
Some firms would rely on external consulting that can demonstrate a real ability to deliver improvements in customer experience programmes to realise their customer experience vision due to the shortage of expertise to handle such assignments, the analyst firm added.
 
However, Forrester warned that not all external firms would have the right capabilities and enterprises will have to be cautious about who they hire.
 
“As companies in 2014 work their way through the first ‘repair’ phases of their customer experience programmes, quality assurance and regular customer satisfaction monitoring will be paramount to success.”
 
CIOs’ budget encroached
 
Closely linked to the increased focus on customer experiences are two other significant shifts in the enterprise landscape, the report read.
 
The first is that regional business stakeholders are increasingly making IT purchases out of their business budgets, eating into the CIOs' technology budgets. The second is that organisations will look to source business capabilities rather than just technology ones.
 
Forrester noted in a recent survey that Asian CIOs now exclusively control merely 51% of enterprise IT procurement decisions, down from 58% just a year ago. In dollar terms, it predicts that IT purchases made by the CIO will decrease through 2016 (see chart below) as business leaders increasingly flex their technology management muscles.

Put customers in the centre in 2014, urges Forrester

“As the age of the customer sweeps through Asia Pacific, and business leaders control a larger share of IT spending, regional organisations will move away from technology sourcing to pursue business capabilities such as digital customer engagement,” it said.
 
As business decision-makers look to build capabilities that will help improve business outcomes, Forrester believes that they will move away from procuring technology to sourcing a new breed of managed services to complement their strategic capabilities. This new breed of services will combine: 

  • Strong business process expertise to help businesses be disruptors;
  • Analytics to monitor and optimise business process performance;
  • Software assets that automate business processes; and
  • Flexible engagement models that align with business value.

Growth forecasts
 
Meanwhile, Forrester’s report also forecast technology spending in Asia Pacific to remain flat about 4%, with the Asean region is to experience growth of approxitmately 7%. 
 
According to Clement Teo, senior analyst at the research firm, a weak global economic recovery and unstable domestic spending led to slower economic and technology industry growth in China this year, and directly or indirectly affected export-oriented economies in the Pacific and Asean region.
 
Combined with ongoing structural problems in India and dwindling foreign direct investments in Asean, IT-spending growth across Asia Pacific in 2013 remains slow.

Put customers in the centre in 2014, urges Forrester

Teo said that for 2014, transformation projects will be the main drivers of IT spending while debt levels in countries such as Malaysia and Indonesia will continue to be a major source of concern for foreign investors, whose lack of investment will in turn limit growth in these countries.
 
“Vietnam, the Philippines and Indonesia will lead the Asean region in terms of IT purchase growth, most of which will come from companies undertaking large IT transformation projects and implementing best practices to improve their competitiveness in a slower, more uncertain economy.
 
“Also, Thailand’s ongoing political uncertainty may also affect how IT investments flow into the country, and hence its IT spending growth rate in 2014,” he said.
 
Teo also said growth and spending in the Asean market in 2014 will be uneven. “What’s clear is that, in the coming year, CIOs will focus on improving the customer experience and building connections with lines of business to ensure that the goals of IT align with desired business outcomes.”
 
Besides these trends, Teo also identified public cloud usage to grow but said that organisations are expected to struggle to manage their hybrid approaches.
 
He said demand for cloud-based services continues to increase for specific usage scenarios, including storage, disaster recovery and cloud-bursting.
 
“But lack of consistent download speeds and ongoing latency issues will hinder a more widespread migration of enterprise applications to the cloud in many Asian markets.
 
“Software licensing models will also continue to constrict organisations that are not designed to support multitenant cloud or on-premises deployment scenarios,” he added.

Related stories:

CMOs: The CIO may be your best friend, says IDC

Banks not meeting customer expectations: SunGard research

A revolution in customer relationship needed

Consumers want smarter customer service: Avaya survey
 

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