We're heading into the homestretch for the Watchlist 2013 winners reviews.
When all is said and done it will have consumed 4 months of my life. But, in the course of that time, I'll have gotten to analyze and write about 38 great companies who are having an impact.
This week we review the last of the vendor winners (minus the two CRM Idol 2012 winners who are automatically placed on this list) and with these four the vendors go out on a high note. Let's see what this year's highest scorer (2 years straight) Blackbaud, NexJ, Coveo and Thunderhead.com have to say when it comes to impact.
Let’s do the housekeeping first.
The 2014 CRM Watchlist Registration is Now Open
On Wednesday February 20, 2013 at 7:00am ET, the CRM Watchlist 2014 registration process began. Yep, right in the middle of the 2013 reviews. Progress (and time) wait for no man (or woman). What that means is that if you are a technology company or consulting/systems integrator business that does "customer facing" things which means software or services products/solutions, you become a candidate for the CRM Watchlist 2014. That means that:
- You can request a 2014 registration form from me at firstname.lastname@example.org.
- When you receive it, fill it out exactly according to instructions and in return you will get the questionnaire for 2014 - either the vendor questionnaire or the consulting/SI questionnaire which are slightly different
- You have until November 30, 2013 to fill out the questionnaire.
- If you send in the registration form to me, I will presume that you are going to fill out the questionnaire by the due date and will start tracking you as soon send the registration back to me. Please don't waste my time and request the questionnaire and then not fill it out. I'm tracking you for the better part of a year if you do send it.
Previously on CRM Watchlist 2013:
We now return to our regularly scheduled programming.
What is fascinating about these four vendors is that there is one uniform characteristic. They have dominant products. I mean that arguably in all four cases, they are best in class and that is where they truly have an impact. What makes up a great product? Let me make a universal and short statement. It is the level of thought that goes into the ideas around the uses of the products and the intelligence with which the products are then developed. Details aren’t ignored, real life is not shoved away on behalf of a developers dream suite. These products all serve the markets they are in. They are extraordinarily well engineered in all four cases. Additionally, these companies all have strong management teams; have deep domain knowledge and are open to hearing what they need to do from customers. Without exception, these four companies are the likely best in their areas with the most substantial futures.
Does that leave them without “things” to do? Nope. Each of them also has specific needs to fulfill and anomalies to exploit. We’ll take a look at what that means posthaste.
First up the verticals.
There isn’t a lot of representation for vertical industries. Partially because the companies that specialize in customer-facing applications for specific industries tend to be on the smaller side and focused on a very narrow slice of even the industry that they are involved in. Also, because many of the technology companies with broader portfolios have their own vertical practices or foci. Witness Parature and the public sector; Amdocs and telcos; SAP and dozens of industry solutions with CRM-related pieces.
But there are some outstanding ones out there who are vertically focused. But even “outstanding” doesn’t get you recognition for the CRM Watchlist. In order to win the Watchlist, the vertically focused technology company has to either have an impact that is so dominant that they own the space or have an impact that goes beyond their immediate focus – not an easy thing to do in either case.
Yet, this year, once again, we have two winners – and it’s the same two as last year. That would be our also once again, highest scorer in the entire Watchlist Blackbaud and financial and health services rock star, NexJ. These guys just raked up the points when it came to the score, with their quality and scope – and their ability to get outside the narrow confines of their industry.
So, yay! to Blackbaud and NexJ – and let’s see what they bring.
I’m going to start this with an anecdote about our once again highest scorer, Blackbaud.
CRM Idol 2011 had several CRM for Non-Profit offerings among the contestants. When we were questioning one of them during their demo, I asked them, “What is your target market?” Their answer was, “anyone that Blackbaud doesn’t want.”
That’s how dominant Blackbaud is the non-profit world. They are a mega-giant with 2011 revenues of $370,868,000, up from $327 plus million the year before and approaching a $450,000,000 run rate by 3rd quarter 2012. Until 2012 they only had one major universal rival, Convio. They don’t anymore, because they bought them. They have 27,000 customers. BIG numbers.
Keep in mind that the needs of non-profits, while they overlap with standard business needs, are not identical with for profit company requirements. In fact, as I mentioned in last year’s review, it isn’t called customer relationship management in the non-profit world, but constituent relationship management.
Some of the specific non-profit operational challenges as identified by Blackbaud in the 2011 annual report:
- Solicit funds and build relationships with major donors
- Garner small cash contributions from numerous contributors
- Manage and develop complex relationships with large numbers of constituents
- Communicate their accomplishments and importance of the mission
- Comply with complex accounting, tax and reporting issues that differ from traditional businesses
- Solicit cash and in-kind contributions from businesses to help raise money or deliver products/services
- Provide a wide array of programs and services to individuals
- Improve the data collection and sharing capabilities of their employees, volunteers and donors by operating and providing distributed access to centralized databases
I would add a couple of other kinds of challenges that plague non-profits and have throughout time immemorial:
- Understand that their volunteer and donor might be the same person
- Communicate the mission for sure, but run a non-profit business with an emphasis on business. This is a business with a cause that supersedes the business operations – but can’t ignore them nonetheless.
What makes Blackbaud’s success even more remarkable is that just because something is called a non-profit doesn’t make it the same as the next non-profit. For example, several years ago, I went on a non-profit national speaking tour with a large consulting firm and we had attendees ranging from the American Red Cross to the Chicago Museum of Science and Industry to the American Medical Association to the Rockefeller Foundation attending. The only thing they had in common was 501(c)(3) status. Each of them had an entirely different purpose, business model and ROI they were looking for. Daunting job; but Blackbaud does it.
The acquisition of Convio, who had a strong non-profit CRM suite strengthened Blackbaud’s CRM offering which is now integrated, for the most part. What this gives them is a fairly complete non-profit CRM platform – not just a set of applications. In fact it actually is more of an ecosystem than just a platform.
While their platform offers a complete set of applications (fundraising, major giving, campaign management, content management, reporting, analytics, etc.) and associated technology services including a strong API for integration and third party possible apps (though I don’t see much evidence of that – even if it’s there), that is only one-third of their total offering. The power of Blackbaud is not just in the comprehensiveness of the platform, but in the extent of the ecosystem.
There are three parts to the ecosystem – and the platform spans two of them. Part one is constituent management which involves business processes, analytics, campaign management, etc. Part two is digital engagement (their Luminate Online product) which brings advocacy, content management, email marketing peer-to-peer interaction and fundraising to the fore. To complete the ecosystem, they also offer strategic services which means consulting, data services, interactive services, campaign planning etc. This “power of three” (who knows the pop reference?) is where they truly shine.
Blackbaud also proves that they take their business seriously by their active participation in what is often called “good works.” To see the incredible list of what they do to foster corporate citizenship, check out their 2012 Corporate Citizenship Review here. Suffice to say, in 2013, they are adding to this remarkable effort with the Blackbaud Community Matters Grants Program, which will give grants to non-profits in areas they have offices and Blackbaud Cares which will support employee led activities worldwide.
But dominance aside, they, like any company of their level, are in a position where they have to keep upping the ante. So….
What they need to do
- Up their game in the CRM world a bit – Blackbaud has what can be characterized as a complete CRM solution for non-profits. But damned if most of the CRM world really knows that. They have attended and spoken at events like CRM Evolution but what they lack substantially is the intellectual property around CRM that they should have. For example, go to their website and try and find much beyond their CRM blog and you don’t. BTW, this isn’t more than a serious tweak of what they do. They have the opportunity with the acquisition of Convio, to be a player in CRM at a level that gets them the broad impact on the CRM stage, not just the non-profit stage. Which, for them, may or may not be meaningful. But, let’s just say, I’d think about it. More IP, more involvement than just conference attendance.
- Make analyst relations, 20th century into influencer relations, 21st century – Blackbaud’s analyst relations in a 20th century world is right and true – regular interactions with Gartner, IDC, Forrester and Saugatuck. But this isn’t the 20th century and they need to rethink some of what they are doing. They need to adjust to the realities of the 21st century analyst world – it’s become more influencer relations and the boutiques and independents are almost as influential if not as influential as the institutional analysts of yore. AND as I’m sure they well know, its particular analysts at the institutional analyst organizations who are the truly valuable, not the company per se, if looking at real value. I can speak to this as an independent – when I speak with independents or boutique firms, they don’t really know much about Blackbaud – and have uniformly been surprised at how big the company is and how dominant they are. If they had been taking a 21st century approach, they wouldn’t have been surprised. I’ll leave it at that.
- BIG consulting and systems integrators – Oddly, unless they just didn’t tell me nor could I find it, they don’t seem to have any strategic relationships to the big consulting and SI firms which is just outright strange. To make this one easy, there is no reason that I can see why they shouldn’t and no reason why the big boys like Accenture, Deloitte, Ernst and Young Advisory, CSC or PwC shouldn’t be interested. I’d make the move if I were Blackbaud, unless they have these relationships already - invisible as they may keep them.
There is a reason that they have been the highest scoring company for two years in a row. They are a dominant force in the non-profit world. But that dominance comes with a price – the cost of keeping it. This year, if Blackbaud continues down the road they are on, they will remain as dominant as ever. But to make this sustainable over many years, well, hopefully they’ll take the suggestions and run with them. But either way, they win.
In last year’s CRM Watchlist, NexJ was a walk-on who submitted a questionnaire. They won, as one of the biggest and most pleasant surprises of last year’s effort. This year, like all participants, they did the questionnaire and they won again. Not a surprise at all, though what they do and how thorough they are a source of actual delight.
A lot of what I said last year, strong management team, award winning software/services in the financial services space, and so on, holds for this year, so I won’t repeat myself. If you want to see what I said, go here. This year, I want to focus on something different.
NexJ has world class financial services related applications – especially in the insurance and wealth management domains. The analyst firms recognize the value. The thought leadership NexJ does around it is excellent. Their customer list is fantastic.
If you look at their recognition, it’s in those areas. In fact, Aite Group recognized them as best-in-class for large wealth management firm – and the market agrees. Three of the top 6 wealth management firms are their customers.
Their marketing is focused around their financial offerings. Their submission to me was focused around financial offerings when it came to market reach and thought leadership.
But I think that their real opportunity lies in their health services offering and this year they won the Watchlist not only on the strength of their financial services offerings but on the power of their health services capabilities.
Look at it this way. Health services is one of the industries I call an “emotional vertical.” The impact that a diagnosis or even the anticipation of a diagnosis has on the emotional state of any individual or their loved ones is not anything I have to explain, because every one of you reading this has been there. Additionally, we’ve seen the desire, the need for information grow so dramatically and the way that health information is both distributed and consumed change so dramatically, it’s a bit of a cliché to say that you found out about the treatment “on the Internet.”
Plus, health care information technology systems is an industry – and a big one at that. Marketsandmarkets estimates that it will be $53.8 billion by 2014 – a staggering number that means a huge opportunity. The entire world health IT market is estimated to be at $162.2 billion by 2015. HUGE.
Now, take the NexJ next gen approach to health care and wellness and here’s how it (in a nutshell breaks out):
- NexJ Health Exchange – Health Exchange does what it’s named. It helps disparate health information systems, electronic health record systems and health information exchanges by normalizing terminology and document formats so that they can create interchangeable longitudinal electronic health records.
- NexJ Connected Wellness Platform – This is an on target, next gen solution. This is the nexus of “patient interaction” and “patient engagement.” The idea is to have tools and a platform that allows patients and caregivers to both interact and exchange information – and manage personal wellness from the patient side. Some of the apps that NexJ references directly are: Personal Health Coaching for diabetes, hypertension, weight management and exercise; Transitional Care Management; Scheduling; and Assessments. The value of this isn’t in the wellness management tools per se but the ability of the patient to control those aspects of their healthcare that they can control – their preventative health care, access to their records and communications with health professionals.
- NexJ Contact for Health – This is the core CRM system or Patient Relationship Management system with an emphasis on the word “management.” This is where the healthcare faciltiies and hospitals meet the payers and insurance companies. Its purpose is a single view of the patient or patient group across organizations that need to interact with the patient. Back office systems from admittance to claims are all part of the patient record which is organized as the proverbial 360 degree view of the customer.
- NexJ Disease Screening – This is designed to manage screening and surveillance programs across groups for major medical conditions like cancer. This is designed to provide “proactive population based screening solutions” that ID treatable diseases AND (a big kicker here) can, once the disease is identified, coordinate inter-organizational action and analyze results. It allows for early detection, which as you know, can save lives. In fact this has been such a success that it won a CDN Channel Elite Gold award for best cloud computing solution
The combined elements of this health and wellness solution are complete and completely rock. The wellness component is entirely geared to a 21st century healthcare model- enabling patient control over their own health, without losing the diagnostic or managerial control that the medical authorities and facilities have to have to make sure that the patient is not only treated well, but in compliance with the law. Who else does that?
I think this is where NexJ has its next great opportunity and has the chance to, if not be disruptive, to be a market maker. But while doing that they also have to expand their global reach. Right now they are known in the U.S and Canada, of course, but to the players in their verticals more so than generally. So there is a bit of a conundrum. How do you expand your universal presence while blowing up the health services market, should they decide to go for it, which would entail a change in focus.
What they need to do
- Go horizontal, not just vertical – This company is one of those best kept secrets outside of Canada and the verticals they serve. As you saw, they are rock stars, one of the fastest growing companies in North America, with outstanding bonafides in pretty much everything. But when I ask around in the CRM analyst world, not too many have heard of them and even those who heard of them know very little about them (with one exception). It’s even worse when I speak with the broader enterprise software influencers, they almost to a person don’t know them. If I were them and I was claiming CRM, I’d have a considerably stronger footprint in the global CRM market and start by getting to all the analysts, journalists and influencers they can. Show up at events, give regular briefings, and send out the press releases to the list of influencers, among many other things. Establish a market presence that is noticed and thought leadership that emphasizes “CRM” not the just the verticals they specialize in. This proposition goes considerably beyond what I suggested for Blackbaud. All in all, given how well NexJ is doing, do they have to do this? Well, no, but if they want to have the impact they could, rather than the impact they are having, I would seriously advise it.
- Push the content around health services - While they are strongest in the financial services (insurance, et. al) area, this could be their future crown jewel. The applications and services are strong, next generation and focused around what might be the biggest area for growth in the technology world for this century – health services. (That’s an opinion, not a research-proven statement). This is where they can grab mindshare and market share over the next several years.
- Expand their partnerships – specifically. Most of the time when I suggest expanding partnerships, I’ve been somewhat categorical, rather than specific and pretty certain of my suggestion. I’m making a markedly different proposal here. I think there are two partnerships that NexJ should look into to see if there is any synergies that work. First, one with SAP around integration with HANA so that they can handle their data at the scale that HANA allows with the speed that HANA provides. This is necessary given the number of patient records, the amount of medical entities and the richness of medical data. Additionally, they should consider a possible partnership with what might be a competitor – Microsoft. For years, Microsoft has been acquiring health services companies (e.g. Azyxxi in 2006 and Medstory in 2008) because they understood the immense possibilities in this area. But even with their abiding interest in health services, they have nothing that does what NexJ does. A complementary alliance In concept similar to the one that Microsoft Dynamics CRM has with Moxie makes some sense here. All in all, these specific partnerships might really propel NexJ to another level, but I’d tread gingerly. There might be fits with SAP and Microsoft or there might not. It’s worth an investigation.
So, NexJ, you are going to have an impact because you’re a very smart company with outstanding products and leadership. But go for the gusto with your little sister service and products and, I’m guessing, in a few years, you have a HUGE impact and a Fast 50 growth rate for global companies.
Insight and Experience
How many flippin’ times have we heard about Big Data, actionable insight and customer experience in the last year? Let’s see, strict Google Search…
- Big Data = 21,300,000
- Customer Experience = 17,500,000
- Actionable Insight = 565,000
Needless to say, that’s a lot. But CRM (the acronym) is at 131,000,000 so none of them are quite there yet. However, what we can say about all three is that they are hyped heavily; they are related to each other: and all three are being addressed by technology vendors and strategists with an eye to figuring out how to make them all work together; which means when that happens, there is value and lots of it, to be had.
The simplest formulation for value is that Big Data is focused on, captured, turned into information, turned into knowledge and then that knowledge is used for the development of insight. Actionable insight is the best kind – the kind of specific idea about someone or something that leads someone or something else to do something with it – not about it.
Our winners in this category, Coveo and Thunderhead are both coming at from entirely different standpoints. Coveo from Big Data and knowledge management leading to actionable insight; Thunderhead from customer experience analytics and management leading to actionable insight. So the end result is the same even though they are radically different.
How radically different you might say?
That, my friend, is the ideal segue into this section. It’s now time for Coveo and Thunderhead.
What can I say about Coveo that I haven’t said more than once? They have a product that just works. It does exactly what it sets out to do which is to provide dynamic information that leads to valuable insights that can impact companies. It is far more than what it started out as – an enterprise search service. It is an incredibly versatile product. For example, it is being used by the contact lenses manufacturing division of Johnson and Johnson to monitor each and every one of the 3000+ points of production along the creation and assembly path of a contact lens. If there is something wrong, Coveo’s engine finds it down to the single place the problem exists – and voila problem can be solved.
In the last year, what might be the most important development at this exciting, growing company is that they have done a full blown integration with salesforce.com that has been developed on the salesforce Force.com platform. I’ve seen this integration and it is so tight it is literally part of the salesforce Service Cloud services. Case information, subject matter expertise and references and solutions to problems are represented from within the salesforce system in what I have to say is a seamless and easily manageable way – which, while probably a more industry standard terminology than I normally use, still gets across the point. There is added power to salesforce. This has been such an impressive addition to the salesforce ecosystem that Coveo holds a coveted “strategic partner” status and is involved in multiple deals with salesforce.
Even with this rather brilliant additional product in their portfolio, it hasn't been easy for Coveo, over the last couple of years to define themselves, because they are so much more than an enterprise search engine. But they are getting there, positioning themselves around being an insights solution and around knowledge management. That is their core. They provide near real time insights based on their ability to capture, aggregate and organize knowledge dynamically.
They have become increasingly visible and important as CEO (and former Taleo chairman) Louis Tetu gets out more and more as a public spokesperson. They are also making themselves more visible in the industry via webinars and attendance at events. Thus with the new product and the solidification of their positioning they are growing in influence and impact at a consistent pace.
But to escalate that impact they need to do a few things – or the steadiness will become a slowness.
What they need to do
- Build up their thought leadership IP by several magnitudes – This is one area that they don’t have enough intellectual property around their insight and KM positioning. For example, if you look at their landing page, there is too much evidence of their legacy enterprise search roots slapping you in the face. They need to build up the concept papers, the web assets, redo the positioning on the site; speak at conference on insight solutions, knowledge management. In other words build the case for who they actually are.
- Mad pace to increase their partnerships – In the interests of disclosure, they (as are several other Watchlist winners – and losers) are a client. While speaking with them, they know this. Their integration with salesforce is superbly done and they have the technical chops to build other integrations. They provide what perhaps no other company can – a platform and framework for uber powered and easily accessible knowledge that is specific to the person asking for it. That means they can sit as a layer in multiple CRM systems. Companies aside from salesforce.com will be excited to see what they offer. Now, given that these partnerships take time and money, they have to choose who they go after and make the commitment and go git ‘em.
This is a company that is going somewhere. But how big they become getting there is still up for debate. They are a leader in their category and they have what is perhaps a unique product. But to expand their market opportunities, to increase their credibility (which is already high) and to gain mindshare, they will have to do what they need to do. I trust they will and if they do, they will succeed.
If this was 2011, I would have gone “who?” if you asked me who Thunderhead.com was. They piqued my interest because an old friend of mine, the former CMO of KANA, Marchai Bruchey, told me that she was now part of it as CMO (now Chief Customer Officer) and I should take a look. Because I trust her, I did. And, as they say in the bible, it was good. (Parenthetical note: Relationships over time work as far as getting an influencers ear. Take note, young AR/PR people and take your time to develop them).
This company showed me something completely unexpected – arguably one of the best customer experience focused applications I’ve ever seen. What blew me away was that it was damned close to real time in how it well it showed the customer journey at the macro and micro levels – and, of course, all about the cloud.
They had no slouch of a history either. Founded in 2001 by current CEO (and truly nice person) Glen Manchester, They were (and are) a leading provider of a document collaboration platform for capital markets – and are well known in that world in fact.
Which is the also the subject of their dilemma. But let me wax enthusiastic for a while longer before I get to that.
They describe their customer experience product as a “true SaaS-based customer engagement platform” which is an accurate description despite its buzz wordy nature. They also call it customer journey management. What it does, to put it concisely is to both track customer journeys enmasse – meaning follow multiple customers’ activities as they “hit” touchpoints along their journeys and allows you to drill down to an individual customer journey and to develop an appropriate communication in what they label rather cleverly “right time.” It’s something you have to see rather than read a description of – but it’s worth the time. From my perspective, having seen it in detail last year during an advisory day with the company, it was the best in class – in fact the best I had ever seen for CJM (customer journey management. All RIGHT! Another acronym. Hooah!).
This is a company that gets customer experience. In fact, the ambiance of their experience center – their London HQ – shows you they understand what it is. When you walk in, there is an embedded high definition TV that isn’t showing you boring videos of what they do, but instead, old black and white movies, remastered for HD. It engages instantly. And it’s just one of the touches of their office – and a reflection of the warm and playful culture they have.
But they do have a real dilemma and it’s because they are so good at what they do. They have two distinct products. The document management product for capital markets which is so good that 14 of the top 15 investment banks use it. The customer journey platform which I think is best in class. But they have spent an inordinate amount of time trying to reconcile the two – the constant generic theme is customer communications platform – which doesn’t’ really work. The two platforms are very different and aimed at different targets. Two bows rather than a double bow are likely the better approach when shooting at two targets. That awkward metaphor shows you how little I know about bows and arrows.
This is a company with tremendous potential. They are well regarded by the analyst community; they produce quality products; they have an engaging culture and a strong management team. They are also well established in one market and new to another. To deal with that, they need to settle on either a reconciliation or separation of the two themes – and do that post haste. Thus….
What they need to do
- Figure out how to handle their two businesses – Thunderhead.com made its bones through an incredibly tight and clean document management service and application for capital markets. They now have a rather remarkable cloud based customer journey application that is among the best out there. They have been trying to reconcile the two businesses and developing a story that can show the relationship between both. It isn’t easy. Each of them is a business unto itself; each has real possibilities. The capital markets document management business will remain their backbone for the immediate future, but their CJM applications/services have almost unlimited potential – providing they can get its story clear. Truthfully, it might be a good time to start thinking about two business units. Complete the already embarked upon cycle to find out if the story of the two as one can be told, but if it can’t, don’t try to force something that may not be there. I’ll leave it at that.
- Seriously escalate social media presence – As of now, their social presence and participation is fairly minimal. Contrast it to the work done by Jon Ferrara at Nimble who is probably the baseline for smart interaction on social media and you will get the picture. For a company making serious moves around customer experience which is a right brained endeavor a social presence at a substantial scale is necessary. Almost a consumer – level of thinking should be involved – highly personalized. That means company employees and management involved as themselves though of course they represent the company. It means IP that might be a web app rather than a white paper so to speak. But it does mean a much richer social media presence, than is currently extant.
- Thought leadership refresh -Thunderhead has a substantial body of intellectual property. But it’s around their core business – the above mentioned collaborative document management for capital markets. They have little beyond some press (though good press) when it comes to mentions or even conceptual materials around customer experience. They need to get off the dime (or 10 pence) here and build up a body of rich media work around customer experience so that their customer experience story is more pristine than it currently is – and defensible via the thought leadership body of knowledge they should provide.
This is their first year on the Watchlist and thus they may not be used to the tough love I like to give, but I suspect they can take it. Their boundless potential around their CJM platform is not just exciting to me but to all those that they interact with. The quality of their stuff is what gets them to this year’s Watchlist and if they take 2013 to mature their themes, their future on Watchlists is assured – as well as their position as a market leader in a truly hot market.
Okay, that’s it for this episode – Next up – the penultimate episode – we are going to see reviews, though shorter ones – for CRM Idol winners Crowdtap and Artesian Solutions and a paragraph or two on each of the Ready to Leap companies and Companies to Watch. Stay tuned.