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Enterprising Insights, Episode 29 – Industry News and a CX Rant

Enterprising Insights, Episode 29 - Industry News and a CX Rant

In this episode of Enterprising Insights, host Keith Kirkpatrick covers industry news from the past week, including a briefing with Cloud Eagle, a new product announcement from NetSuite, and Adobe’s terms and conditions updated. He closes out the show with a Rant focused on the declining customer experience among American consumers, as tracked by Forrester Research.

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Listen to the audio below:

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Transcript:

Keith Kirkpatrick: Hello everyone, I’m Keith Kirkpatrick, Research Director with The Futurum Group. I’d like to welcome you to Enterprising Insights, it’s our weekly podcast that explores the latest developments in the enterprise software market and the technologies that underpin these platforms and applications and tools. This week I’d like to cover some interesting news from the enterprise application space. Then as always, I will conclude the episode with my rant or rave segment where I pick an item in the market and I will either champion it or criticize it, so let’s get right into it.

So this week I had the opportunity to speak with a vendor, this vendor is called CloudEagle. Now they’re a pretty interesting company, what they do is they basically, before we get into exactly what they do, let me just set the stage here. As everyone is aware, if you think about a lot of enterprises, they have undergone over the last couple of years, an interesting scenario where if you think back to the pandemic where organizations had to stand up services very, very quickly, they had to go out and procure software very quickly just to deal with a complete change in the way people were working. Well, they obviously went out and acquired a lot of licenses to various pieces of software. Maybe some of them worked well, maybe some of them didn’t. So what we have here now is a situation where you have companies that have a lot of software out there, and honestly not all of it is serving its purpose.

Either the software doesn’t work as advertised, or perhaps the vendor may have gone out of business and they still have a license there. Perhaps it’s just they found other software that works better. Well, the problem is you get this thing, and I’ve talked about it in the past, it’s really called application sprawl or technology stack sprawl. And what CloudEagle does is they actually provide visibility into what software licenses companies have. And this is really important because if you think about spending issues, if you think about efficiency, you think about security, it’s really important to know exactly what applications you have, what are being utilized. So what they do is they allow organizations to go in and see, okay, we have 30 licenses of software X, 45 of software B, and those two are redundant and allows the organization to really identify what’s being used, what’s working, what’s not, and of course make sure that they optimize their technology utilization.

It can also be used when it comes down to purchasing so for example, if an organization realizes that they actually don’t need as many licenses as they have, they can go back to the vendor and renegotiate, or adjust their spending. Conversely, if they find that they need a lot more licenses than they have right now, they can use that and perhaps try to negotiate a discount. So that’s one of the things they do. The thing that to me that’s even more interesting is being able to go through and really see, really manage access to all these applications. It’s one of those things where if you think about how new employees typically request access software they go, “Hey, I’m starting this job.” And the manager will say, “Well, they need access to software package A, B, C, and D.” Traditionally, that’s been a manual process. What CloudEagle says they can do is actually automate that and automate it within the flow of work. I was talking with them and they had mentioned that they do have a user interface, but they also provide the opportunity for folks to actually implement or onboard through a more automated workflow that shows up through let’s say Slack.

That’s really interesting because if you think about efficiency and you think about getting things done, people don’t want to have to open up a separate console for every application to be onboarded. They want to be able to do it in such a way where it’s easy, where they’re already going every day. And so what CloudEagle says they can do, is they can actually configure access to and basically onboard employees onto different applications through Slack and actually manage the licensing process through that. And I think that’s really interesting and it’s kind of an interesting approach when we start to think of how things like generative AI are really impacting the way that we’re working and interacting with applications in a much more democratized function where it could be line managers handling this task instead of having to go to IT and do a full onboarding package request, something like that. Which takes up time, takes resources away, takes IT resources away from more pressing issues. So it’s really interesting to see software vendors like CloudEagle doing this.

Now, they’re not the only ones that’ll do this, other software vendors out there do this. I’m thinking just off the top of my head, WalkMe does this, they do some other things as well in terms of managing access to generative AI. But I think overall this category is going to continue to expand over the next several months and years as organizations realize that they need to get a better handle and more visibility into their tech usage and their tech spending and licensing issues. Because the buying spree days of the COVID-19 pandemic really are gone, organizations are realizing they need to kind of tighten everything up if they are going to be deploying things like automation, artificial intelligence across their tech stack. They want to make sure they know what they have and then how this technology will be deployed across the applications that they do use. So, next I want to talk a little bit about another announcement that came across my desk last week. I believe this one actually is going live as of Monday the 24th.

This comes from ERP vendor Oracle NetSuite. They actually released a new solution, it’s called NetSuite SuiteSuccess Healthcare Edition. This is a new suite product that is designed to help really ring out efficiency through a very industry specific, pre-configured solution for healthcare companies. The solution has predefined role-based dashboards, reporting functionality, KPIs, and workflows. And the idea here is that the solution is built for healthcare companies and of course, as everyone is aware, Oracle is making a really, really strong push into the health corp space. Larry Ellison famously mentioned about a month ago that he was going to be moving the company’s headquarters from Austin to Nashville to really tap into the number of healthcare companies that are in that region. So there are a few really interesting things here that I’d like to just highlight from this announcement. Obviously, there’s specific functionality in there around financial management reporting, which is a big concern for healthcare organizations. Inventory management, which sort of makes sure that the organizations have a real-time view of the inventory across all locations and including all different types of medications, medical supplies, all of that kind of stuff.

There’s also an asset and lease management function there, helping them make sure that they can manage all of the assets that are owned or leased including devices, ambulances, even office space. And then of course, the other thing that’s super huge is this issue around compliance and security, making sure that all of the protected health information like personal data is actually managed appropriately with role-based access controls. And then of course, the other thing that’s really important along with that is this idea around user activity auditing, making sure that you can track any users, what information are they actually monitoring, what are they using? What are they accessing? To really make sure that everyone remains in compliance. And I think the interesting thing about this approach and really it’s NetSuite’s approach to really everything, there’s two things going on. One is obviously NetSuite being a property of Oracle is also leaning heavily into the healthcare space. They are obviously an ERP that’s targeting smaller organizations than Oracle and Oracle’s fusion apps for healthcare. But what they are doing is they are leveraging all of Oracle’s investment into the healthcare space, looking at all of the processed data, all of transaction data, and all of that kind of stuff that is very specific to healthcare processes to build an out of the box solution that really doesn’t need a heck of a lot of customization.

And this is important because really when we’re thinking about software these days, it’s really all about time to value. Because if you think you’re going to be deploying a new platform or piece of a new platform, you want it to start delivering a return on that investment right away because you’re going to be paying it for on a per license basis pretty much immediately and that’s an ongoing cost. So, the ability to have a solution that can do all of these different functions, pulling data from all different parts of the organization as a good ERP does that they’re really saying that this is something that is built for the healthcare industry and is available to get going right out of the box. The other thing of course is that we think about this NetSuite sort of value prop is also that when you start to deploy things like artificial intelligence, having a single platform makes it easy to make sure that the AI can work across workflows from front to back, from all across every different sort of function within the application. So I think that’s also a real strength for NetSuite in this offering. I think the big question of course for all of these vendors, NetSuite included, is making that sort of value proposition resonate with customers because again, it’s a big lift to implement new software specifically if you think about a lot of these healthcare organizations, some of them are privately owned for private equity, others might be public companies.

A lot of times they operate on a quarter to quarter basis and they need to see results right away, and need to make sure that the value equation works out for them in terms of generating ROI pretty much immediately. So that is the big challenge that is faced by all these application vendors. Then finally, for the last news item of the week, I want to talk a little bit about Adobe. Now, I’ve covered Adobe quite a bit here both in terms of my research notes as well as here on Enterprising Insights. And to be honest, they’ve had a few challenges largely around messaging, messaging in terms of, we’re talking about AI. How they train their model and what data they use to train their models, on are they compensating creators, is are they using other sources to train their models, all of that kind of stuff. And really, Adobe has done a very good job about making sure that they only use images portraying their models that are in their Adobe stock collection of images. And those images are either royalty based images where they pay a licensing fee to the creators or they’re in the public domain, that’s been very clear. What has not been clear, and they’ve honestly fallen down a little bit on, is being less than clear in terms of their terms of use.

They updated their terms of use in the beginning of June, and there was a big, big kerfuffle about, I guess there was some language in there that was ambiguous in terms of does Adobe look into user data? Are they scanning data that’s held locally? What’s going on? Are they training their data models on customer data? Well, they released in mid-June, they came out and clarified their terms of use, basically stating that creators, the users, own their own content and it’s never being used to train any generative AI models. So I go in there and I make something, they’re not training the models on anything I create so that’s very good that they clarified that. So they’re not training on customer content, they only train it on licensed content with permission such as Adobe Stock images and on public domain. Now there is also a choice though that is available that if you want as a customer to participate in their product improvement program, you can opt into that in terms of things like helping to refine the product experience. But they do clarify that they will not be using generative AI there, and of course you can opt out of it.

Now, I think the other thing that was creating a little bit of controversy was in terms of whether or not they scan user content and really they do say that they can go in and look at anything that’s uploaded to the server. They will scan for images that are basically dangerous material, adult content, any kind of hate speech, any kind of things that would be considered objectionable and I don’t think that that should be a massive issue. I mean, if you think about Adobe, they’re a large company, they’re public, they have a responsibility to make sure that the content that is on their servers, and again, I’m talking about their servers not on a user’s local hard drive. They need to make sure that they’re not hosting content that is illegal, child pornography, something like that, or some crazy violent manifesto or something like that. So I think the fact that they’ve been a little bit more clear there is helpful in terms of making sure that they are a, addressing the concerns of their users who quite honestly were a little concerned that Adobe had changed the terms of how they operate.

But they also had to again, sort of say, “Look, we serve large companies who need to know that Adobe, as a vendor, is not going to be posting content that is inappropriate.” So I think it’s good that they did spell out that yes, they will scan content, upload it to the server to ensure that they’re not hosting anything that is inappropriate. So, I think the lesson here is that Adobe does a good job of stating that their policy in terms of not using AI user generated content to train AI models. I think that they just did not do a good job of being clear with their initial messaging. It’s something they need to learn from, I think they are learning from it and will continue to do so. It is a real challenge for large organizations like Adobe, like Google, Microsoft, whatnot, when you’re dealing with very, very complex issues in terms of training models and scanning content to prevent inappropriate materials from popping up on their servers. And I think it’s just something that the industry will have to deal with over time in terms of striking the right balance about clarity and being very, very explicit about what they will be doing and what they won’t be doing. And I’m sure that the company will move on from this like they had in the past with other issues.

So with that, I want to move on to our rant or rave segment for the week. And this one is going to be a bit of a rant, and this is about, what I’m talking about here is Forrester Research just released its 2024 Forrester customer experience index, which measures the quality of CX across US businesses. They just came out with this report, and I believe that this year, this is according to Forrester, the average customer satisfaction rating dropped by about 1.6 points, dropping from 70.9 to 69.3 on Forrester’s a hundred point scale. So basically, what they’re talking about is sort of a broad erosion across various sectors in terms of customer experience. This survey was conducted with about a hundred thousand consumer responses, so this is not a small survey this is pretty widespread. And really the kind of takeaways from this report were that obviously the quality of CX among US businesses has really reached its lowest point ever. And that really raises a lot of questions about customer satisfaction and all the fact that all this technology that’s being pushed out into the market that is clearly not doing what it’s supposed to be doing, or organizations are not deploying it properly.

One of the other points that was raised in the report is that there are a lot of problems with, as they say, “Inadequate omnichannel experiences.” And that is leading to a lot of customer frustration. And then of course the third thing there is what they call high effort platforms. So things like digital platforms or self-service platforms that require a lot of excessive effort for customers to get to solve their problems. So these are really concerning insights based on what I’m seeing here because if you think about the amount of focus on customer experience, particularly in the last several years where businesses have invested heavily in terms of looking at new CX platforms, looking at ways to deflect very low hanging fruit, customer inquiries to self-service platforms. Clearly, it’s not resonating as well as they would’ve hoped with consumers and that’s a problem. And I’m thinking that there are a couple of things going wrong here. One is of course that the technology is not being deployed properly, meaning are they deploying these and not tying it to the right data?

Meaning are they missing the mark on personalization? Are they missing the mark in terms of being able to, if you’re using, let say an automated bot, are they not grounding it in the right information? Are they not collecting enough information about their customers and tying it to those algorithms? There’s clearly a breakdown there. I also suspect that there’s a breakdown in terms of training because ultimately, once a customer gets to a human that’s where all the technology in the world isn’t going to help if you don’t have agents that are well-trained and well supported. Maybe it’s a question of they don’t have the information they need, a lot of platforms, technology platforms say that they’re able to serve that up using generative AI. I suspect a lot of that isn’t going on just yet. And then the third issue here with this issue around high effort to actually get things done. I think that’s also, if you think about a lot of the self-service platforms that are put out in the market, they’re not perfect yet, they still don’t account for every possible scenario.

They don’t account for every possible way that people might be trying to explain their problems and I think that’s an issue that vendors are going to have to address with their customers, and it’s just going to take time in terms of really understanding how customers interact with systems. And really, how do you get them to that next phase, which is interacting with the human in as little time with as little friction as possible so that they aren’t wasting time with the system who was trying to understand them because that is one of the biggest points of frustration. And then of course, once they do reach those agents, those agents need to be supported properly with the right information, at the right time, in context, in a single screen, so they’re not trying to look for information all over the place. And I think the other thing is that, and I don’t know whether or not this is something that is going to ever change or not given the economics, but when you have agents that are dealing with multiple interactions at once, there’s only so much one person can do in terms of dividing their attention three or four ways at once. And there’s always going to be that lag and there’s always going to be that human factor, maybe not keeping everything straight. So, it’ll be interesting to see how the industry responds to this survey. I do think it is, obviously the declines are widespread.

I do think I saw a nugget in there saying that airlines actually did a little bit better, which is kind of surprising because I’ve had some pretty bad experiences with them. But it will be something that I think vendors need to really look at in terms of how can they help their customers address their specific needs. It won’t be necessarily a one size fits all, a vertical strategy, it probably requires going in very deeply with their professional services teams to really help analyze what’s going on at that particular organization and then how can technology, and people, and processes, and policies be modified to provide better outcomes. So, that’s kind of my rant of the day here, but it is something that I will follow up on because I do think this is really interesting given all of the hype around a focus on customer experience, and yet we’re still seeing massive declines. All right, well that’s all time that I have to today, so I want to thank you all for tuning into Enterprising Insights. I’ll be back again next week for another episode focused in on the happenings within the enterprise application market. Thanks again for tuning in and be sure to subscribe, rate, and review this podcast on your preferred platform and we’ll see you all next time.

Author Information

Keith has over 25 years of experience in research, marketing, and consulting-based fields.

He has authored in-depth reports and market forecast studies covering artificial intelligence, biometrics, data analytics, robotics, high performance computing, and quantum computing, with a specific focus on the use of these technologies within large enterprise organizations and SMBs. He has also established strong working relationships with the international technology vendor community and is a frequent speaker at industry conferences and events.

In his career as a financial and technology journalist he has written for national and trade publications, including BusinessWeek, CNBC.com, Investment Dealers’ Digest, The Red Herring, The Communications of the ACM, and Mobile Computing & Communications, among others.

He is a member of the Association of Independent Information Professionals (AIIP).

Keith holds dual Bachelor of Arts degrees in Magazine Journalism and Sociology from Syracuse University.

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