And the Winners of the CRM Watchlist 2014 are....
CRM Watchlist 2014: Winner of Lifetime Achievement - Amazon
CRM Watchlist 2014: For the 1st time ever: The Watchlist Elite, Part I
CRM Watchlist 2014: For the 1st time ever: The Watchlist Elite, Part II
When you think about technology-related ecosystems, you start thinking somewhat differently than if you think in product portfolios, or channels and alliances or even service delivery. If you think in the portfolio-channels way, you think about Value Added Resellers (VARs) and Independent Software Vendors (ISVs) who provide additional services that support your portfolio as a technology provider. You also think, for the more dominant companies in a space of app exchanges — those places where partners who develop applications that supplement or complement the “parent” set of applications sell their wares with the support of the company.
Watchlist Elite winner Salesforce.com’s AppExchange is the one that most easily comes to mind. But the business world has changed so dramatically in the more than a decade that these old models no longer apply. How we communicate, how we create, distribute and consume information, what we expect of the institutions and individuals we communicate and share with have been dramatically altered to the point that entirely new business models or at least dramatic modifications of the old business now are not only important but necessary for businesses to be successful — or even continue doing business at all.
That means we have two things that have to be considered when it comes to the Consulting/Systems Integrator winners of the Watchlist this year — and especially the Elite. They are:
- How well do they understand and align with the transformation of business that has been underway for the last decade plus?
- How well do they understand the value of ecosystems?
These are the big picture items that separate the Elites in this category from everyone. They get it and they execute against it. The two winners of the Elite Award this year show not only exemplary awareness of the business “makeover” going on but also have invested in it to the extent that they are participating in the creation and evolution of that transformation.
The transformation we are speaking of is one that these companies, Esteban Kolsky, I and others call digital transformation. Briefly stated, digital transformation, in my eyes, means a set of practices, tools, technologies, strategies and programs that not only account for the transformed expectations of customers, but also has the means to take the insights gained from the data gathered and apply them in a way that provides a mutually beneficial outcome. In order to do that, the technology infrastructure and the culture of a company has to be aligned with the idea. It means that the employees have to be empowered to participate both in the life of the company at a magnified level from where it is now, and directly with the customers.
The tools have to be there to support their empowerment. Their needs to be an omnichannel strategy, not just a multi-channel one. People communicate on multiple channels as an organic part of their daily activity. So it isn’t a matter anymore of providing a several channels so that the customer can pick “the one” that they communicate with you on a given day, but having the means to provide the channels and the connectors that allow the customer to communicate with you on multiple channels in a given day without losing the continuity of what they are doing with you – a harder challenge but part of the digital footprint we each have and the overall digital transformation of business. For a lot more on this, please make sure that you read Esteban Kolsky’s seminal piece on digital transformation here.
What makes these Elite winners so interesting is that they’ve figured all that out. Each of them approaches digital transformation differently, but each of them has a practice whose job is to bring this to companies in a comprehensive way – and they do it well enough to thrive despite what may seem to be a “big concept.”
Let’s see what it is that makes me think each of these two will not only be major league impact players in 2014 but for years beyond that.
As you all know I used to despise Accenture, something I’ve never been shy about saying over and over again. But the reality is thanks to Joe Hughes, who I greatly admire, and a company whose practices have not only changed but be redeveloped, overhauled and aligned for 21st century business – mostly – I now think good of Accenture, so much so that they have achieved a position as one of my Watchlist Elites in 2014. And I think it is well deserved.
Why? Well, I’m glad you asked that.
Accenture has always had two great strengths — regardless of when you might be thinking of them — even back to the days of Andersen Consulting. The first was execution — they were all about “doing” and even though in the old days they would get overzealous about it — to put it politely — they still were able to take on large complex projects and accomplish more than almost any other company of their ilk.
Keep in mind, they never lack resources with nearly $29 billion in revenue in FY2013 and 275,000 staff of which 25,000 are devoted CRM alone!! That’s ten times the next biggest that I know of. So we are dealing with a behemoth.
The other thing that they rocked out on was thought leadership. They understood the value of it and they produced the thinking that was aligned with the business world of the era that they represented. So they might be talking about enterprise processes associated with ERP back in the 90s but today, they are, surprise, surprise, talking about “exploiting” digital transformation to drive high value performance.
But what makes Accenture’s 21st century version so compelling and a little dangerous to them is that their core - execution and thought leadership – remain their core and are fully operationalized when it comes to their day to day practice. What makes this great is that they are able to provide (see above) a practical way to realize things that can often seem pretty abstract. Thus they can talk about “exploiting” (practical way) “digital transformation” (something that that can seem pretty abstract) and give you ideas on how to go about it.
What can be damaging is that they execute on everything and one of their strengths, thought leadership, which is based on mindshare and not necessarily tied to immediate execution can suffer a bit. An analogy is thinking about sponsoring a trade show for visibility and networking versus doing it for lead generation. If you think the former, you are in a trade show wheelhouse, if you are thinking the latter, you are delusional except by an occasional happy accident.
So what makes Accenture a company that Gartner, in its 2013 report, “Leverage Digital Transformation Consultants to Adapt to the Digital Age,” gives a strong rating in 9 of 11 categories that define a digital transformation agency? Well, I can’t totally answer that but what I can do is show you why they deserve to win a 2014 CRM Watchlist Elite designation.
- Accenture Digital — This is a newly minted and very important part of a reorganization at Accenture that involves 23,000 of Accenture’s staff. All digital assets, all software, services and tools that impact marketing, analytics and mobility are aggregated to a single portfolio that is made available to clients. This is a “digital enablement” capability that Accenture offers its clients including….
- Accenture Interactive — This is an agency — a digital creative agency pure and simple. Unlike Infor’s utterly brilliant Hook and Loop (more in their review) which is used internally only, this is an organization that competes in the market – one that technology focused consultancies ordinarily doesn’t focus on. acquired a well-regarded London based creative agency Fjord in March 2013. The focus of Fjord was on Service Design. To give you an idea of how Accenture thinks on this, please take a look at this document on they produced with Fjord conjointly for 2014 Trends that Impact Service Design. Accenture Interactive is unique because it’s a technology focused company coming at creative work and behavioral insight – something that you rarely see. But entirely in line with digital transformation and the 21st century evolution of business.
- Thought leadership — They continue to produce extensive conceptual pieces geared toward highly specific value propositions. The tenor is best expressed by this one - Delivering Public Service for the Future: Enabling the Next Wave of Digital Transformation which looks at digital transformation for public sector and citizen engagement specifically. This is a great strength of Accenture’s and a bit of a weakness (see below) both. But all in all, their ability to express practical approaches to new market transitions and trends that are having impact is a reason they are an Elite.
- Unique management focus – Their management is unique in one regard. It is focused on delivery to specific needs of specific groups. For example, The jéfe of the CRM team, Robert Wollan is “focused on understanding and addressing the needs of Chief Sales and Chief Customer Service Officers.” Brian Whipple, who is the Managing Director of Accenture Interactive is focused on “addressing the needs of Chief Marketing Officers.”
- They combine these rather remarkably smart, roles focused leaders with guys like Joe Hughes, the Global Managing Director of Emerging Technology Inoovation — Digital Transfomation who, despite his incredibly long title, is a thought leader and cutting edge practitioner in providing services for Accenture to their clients that are geared to top industry needs and direction. This is a highly experienced, very skilled management team (there are others) who handle the customer-facing needs of Accenture customers.
- Approach to execution — This guys are dedicated executioners. I mean that in a nice way. They are all about execution and at times it messes them up because they get caught into the minutiae of the day to day, item by item things it takes to do projects of the scope that they do. Don’t get me wrong, they have to do them. But they sometimes get so deep into the weeds, they forget the flowers — or something.
But that said, there aren’t very many companies who are able to do projects at the size that Accenture does and actually complete them. Nor are there many companies who were willing to take the risks of cloud-focused consultative and implementation services before the model for revenue from them was fully fleshed out – but Accenture did. Where many companies still don’t know how to do them in a cost effective and revenue producing way, Accenture does and it shows in their work with their partners.
- Partnerships and alliances — Their approach to partnerships and alliances is nearly flawless. Their power lies in two things – their ability to invest in the time and effort it takes to make partnerships work in combination with a really smart approach to choosing partners – with limitations. For example, they partner with salesforce.com at a scope that no one would have imagined possible several years ago. Projects so big it involves 10s and 100s of thousands of seats. They have someone who runs a practice that focuses on this. They are the first company to achieve Oracle Diamond Partner status (2012). They are SAP’s largest implementation partner and work with SAP on co-innovation. They have 36,000 SAP professionals. Their relationship is so substantial with Microsoft that they and Microsoft created and own a separate company, Avanade, just for that.
Independently of Avanade, they are the Microsoft Dynamics CRM leading partner with 700 staff just for that alone. To carry it further, they’ve chosen a much smaller company than those here, Watchlist Winner for three years, Clarabridge, to be one of their key partners. As a result, they appear with Clarabridge to support the company everywhere. In other words, rather than some companies whose partner programs are “what can you do for me, partner” Accenture understands what partner truly means.
All of this serves this megalith well. But that doesn’t mean they can’t improve. Oh yeah, they can. Which would be something because they would be a MEGAlith then – not just a megalith. And THAT would be something to see – and we well might see it.
What they have to do
- Short on vision — This is actually ironic. If you see what I said above, you would think that this is a visionary company. Not only visionary but able to support and sustain an explainable vision. But this is where a company dedicated to execution hurts itself. What they define as a vision is really just an executable. Here is what I mean: 1. Grow profitably in a world where traditional levers deliver traditional results; 2. Find new cost takeout opportunities that do not erode their businesses; 3. Deal with the complexity tax (PG note: simplify things).
All of these are noble goals but they aren’t a corporate vision. A corporate vision is defined as a statement (often poetic or metaphoric but not required) that says here is how we see the future of business and the future of this company and how we serve that future. It can be simple. Here is Amazon’s vision statement: “Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online.” Broad and sweeping and lot goes into achieving that vision but it tells you their objectives for the long term whether they’ve gotten there or not.
With all its troubles, Hewlett Packard has had the same vision since 1957 when David Packard said: "It is necessary that people work together in unison toward common objectives and avoid working at cross purposes at all levels if the ultimate in efficiency and achievement is to be obtained." Accenture, given that they are attempting to take leadership in digital transformation, needs to have a broad vision statement that tells the world that they are prepared to look at the future and then they can develop a new mission statement to show they are going to execute on that.
- Improve their philanthropic culture — It’s not that Accenture hasn’t done anything at all when it comes to corporate philanthropy. They have the Skills to Succeed program, for example tha t will train 500,000 people (they hope) by 2015 with the skills they need to get a job or build their own business. But relative to their size and scope, all in all they aren’t doing as much as they could be doing. Far be it from me to tell them how to run corporate philanthropy, but I think their outlook needs to be, well, different than it is.
For example, there are two statements they make around corporate giving that indicate it. First, on Skills to Succeed they say “It entirely relies on employees giving up their time to train, counsel and guide these people.” They then go on to laud the enormous success of the program. They speak of the Accenture Development Partnership – their corporate social enterprise which, laudably, as a not-for-profit works with NGOs and others in international development in “more vulnerable locations.” But here again, “Employees take a voluntary pay cut to work on projects in (those) more vulnerable locations…”
While the programs are commendable and clearly are accomplishing things, what it tells me when I read this is that the Accenture employees are marvelous in their sacrifices to do good in the world, but what it doesn’t show me is that Accenture is doing anything to sacrifice itself as a company. The employees “give up their time” and “take voluntary pay cuts.” Compare this to salesforce’s approach with 1:1:1. Salesforce supports the employees and doesn’t make them cut pay and doesn’t make them give up time but in fact, builds the support of time and compensation into the fabric of the company, the DNA of the company itself.
Without at all taking away from all the good that Accenture employees are doing, I would suggest with all due respect that Accenture relieve some of the sacrifice since there is no need to be ascetic to prove that you are doing good. Accenture should adopt salesforce’s model or some other model that relieves the “giving up of time and income” of its employees.
There really isn’t anything else that Accenture needs to do to be honest. They are a powerhouse that has a long and short tailed approach to business that clearly works given their scope and reach and thinking. They are an Elite winner because they do elite work in a world where few companies can. I expect that they will sustain this for a long time to come. Truly.
Digital transformation is what drives EY also. Formerly known as Ernst and Young Advisory (at least to me), they are now just EY in, what was I guess, a rebranding effort — or maybe I just got it wrong over the last year or so.
In any case, what makes EY an Elite impact player is their approach to digital transformation which I would call thorough and pragmatic and, in a surprisingly strategic way, tactical — very tactical — which has its upside and some downside.
Let me explain. The core vision that EY has is quite clear — it is “Building a better working world” — a genuinely paradigmatic and concise vision. This vision is realized through a mission that encompasses in its broadest sense – business transformation – the things that businesses have to do to as EY puts it (in sum):
- Improve performance
- Reduce risk
- Improve finance functions
- Improve supply chain management
- Improve customer management
- Improve customer value
They tell a great story about the “digital disruption” that has forced companies to start thinking about business in different ways and that brings into question the legacy investments companies have in infrastructure and applications which can’t sustain the volume, velocity, visibility and volatility of all the emerging needs of a more empowered customer.
So, the vision, mission and narrative to support the vision and mission, are all clear. But, if I left it at that, it would beg the question, what does this mean for actionable work, if it weren’t for the fact that EY already has a practical perspective on how to implement all this.
What makes them stand out from the pack is that they have the chops to execute against their vision and though some of what they do is a bit too pragmatic and tactical, as we’ll see soon enough, most of what they do is provide customers with what they need when it comes to strategies, programs, processes, governance, regulation, business rules and the technologies to support it.
Their customer advisory practice not only handles the more traditional CRM pillars – sales, marketing and customer service, but takes experience design and the employee engagement necessary to effect customer engagement into account when planning business transformation efforts for their clients. The diversity of their client efforts indicates their scope and strength:
- Customer experience design for a global entertainment and leisure parks giant (PG Note: EY terminology in these)
- Service model design for a global leading publishing and education company (if I were to venture a guess, and it is a guess, I’d say it was my publisher who fits that profile)
- Global digital strategy review for a savings and investment business
- Customer contact center optimization including technology strategy and vendor selection for a major Australian bank
I can go on but the diversity of even this list shows you how big their projects and widespread their thinking is.
But none of this would be more than words in a document if they didn’t have the chops to back it up. They have a very skilled and seriously experienced Customer Advisory Practice management team with what looks to be centuries of experience (though to be fair, that’s 24 members combined – not just a small bunch of very old geezers.) They are led in the Americas by Woody Driggs, in EMEIA by Steven Gleed and Asia Pacific by Hyungln Lee. Woody was Accenture’s Global CRM lead in a prior life. They also have Laurence Buchanan as the Director of the EMEIA Customer Advisory Center. Aside from my personal regard for Laurence, who is a good friend, he has been and is, independently of his affiliations, a thought leader for the CRM, social and digital worlds in the area of business transformation, so he is a real asset for a company like EY. Their management team is just plain star quality.
While they are not at the level of the IBM Institute for Business Value (IBV), the 2013 Watchlist Lifetime Achievement Award winner, they do spend the time necessary on the kind of content that provides true conceptual thought leadership with the market research to back it up. For example, they are looking at the evolving role of the Chief Marketing Officer (CMO) and how he/she has to collaborate with the CXO/CCO to create a holistic and as they call it “synergistic” marketing environment. A major study is slated for that this year.
They also have several publications and forums that are made available for the creation and dissemination of the content that either they produce or that they facilitate the production of. On the former side, they have the Business Pulse report, which focuses on client issues like industry specific opportunity and risk; with benchmarks for the management of the risk and the exploitation of those opportunities. For the latter, they have Performance which is their “Think Tank for Business Performance and Innovation” translated means “a place where both invited guests and EY staff can discuss practical and theoretical business transformation and performance issues and questions. The formats are live forums and quarterly publications and all in between.
I’ve barely touched on the level or the amount of thought leadership that EY cranks out but they understand mindshare as well or better than anyone in the market and make an aggressive effort to be top of mind, which shows not only progressive thinking but also pragmatic foresight.
All of this has led to EY being a 30,000 strong (overall) consultancy (2500 consultants in the Customer Avisory Practice) with strong revenues (undisclosable, sorry) and a framework that provides a path to future impact and growth that likely will dwarf what they are currently enjoying. Promising indeed.
But….and there is always a “but” since I have yet to find perfection in anything…
Before we get to what they have to do, I have make a simple point. There is a limit to being tactical and pragmatic, though nothing “incorrect” about it. That limit gets reached when the organization being tactical and pragmatic gets too comfortable in their own skin. “But,” you say, “If they are succeeding as well as you say they are, why shouldn’t they be comfortable in their own skin? You know that old saw, ‘if it ain’t broke, don’t fix it.’ Doesn’t this hold true here?”
The answer is no it doesn’t. In order to keep up with the very things that it is aiding its own customers in doing, business transformation as uncomfortably messy as it can get, has to be a hallmark of the company that is providing it. This is not an “eat your own dog food” thing. I don’t believe in that. If we are undergoing digital disruption as EY claims, then they have to continually reinvent those areas that need reinvention. Unless they are perfect, which they are not since no one is — there are some areas where they have to shed their old skin and find their new covering. That means that they have to align not just their content with the changes that they are seeing but their own company along the lines that say, Accenture is doing with Accenture Digital or IBM is doing with their years long social business transformation initiative for the entire company. That means shaking things up every now and then.
In that context, there are a couple of things they have to do and one of them is one of those nerve wracking ones.
What they have to do
- Revamp their agnostic non-partnership thinking – EY’s remarkable pragmatism gets in the way of their partnering. While they have made a couple of very wise acquisitions with their 2013 purchase of Greenwich Partners and J&M Management Consulting that has truly fleshed out their ecosystem, the closest thing to a formal partnership they have is the white labeling of Crimson Hexagon. In fact, their own statement on this is “We have a range of relationships across the CRM ecosystem from strategic to tactical with currently no formal partnerships/alliances.” When one is pragmatic, one is opportunistic and tactical when it comes to needs for specific projects and implementations.
You choose the partner the customer wants at the time the customer wants them. Yet, more and more, customers, especially large customers are looking to see what you can provide long term. That means an ongoing ecosystem of products, services, tools and consumable experiences that begs for formal partnership and alliance. Does this mean the vendor agnostic approach which sounds great in concept can’t work? No. It can. EY shows that it has worked quite well and they are equipped to continue that way. But if I were them, my gut tells me that they need to start re-examining their strategy here as more and more of their competitors can come into an opportunity with clear competence in a wide array of chosen products, services, etc. where EY can show who they are partnered with for the purposes of their effort but with little governance over the companies that they’ve tactically engaged.
As EY, I’d start thinking ecosystem now so they can make some decisions and prepare later. Place some bets on the technologies that you think work and partner formally and strategically (go-to-market) with the companies that you think are good bets. I get vendor-agnosticism but it has its limitations. Just sayin’.
- Finally stop over-focusing on traditional analyst organizations — Last year, I said the same thing. Don’t over focus on the traditional analyst organizations. I’ve heard from EY in their submission that they have “focused on building relationships with high impact, specialty analysts at smaller firms than the typical large analysts.” While this is nice, there are two things of note. First, that’s not enough and second, I can’t find the evidence of it, which means it’s not being done at the level it has to. Their mindset is still based on scoring well in analyst reports like MarketScopes and Magic Quadrants and Waves and Watchlists – all of which must be done and any organization of substance that doesn’t is just outright stupid not to since there is a lot of benefit to being the best according to those who are tracking all the organizations. Best among peers is a damn good place to be — noticed by prospects and customers. But there is a lot more than analyst “firms.”
There is an increasingly large body of independent analysts who are substantially influential with customers and in the market and I honestly see no evidence, beyond the relationship with me via the Watchlist that there is any engagement with independents – which is a genuine gap that NEEDS to be overcome and quickly. I asked around and the independents I spoke with (more than a half dozen on this) none has any sustained relationship with EY. So while the effort they are making to change is laudable it is neither sufficient nor fast enough. One meeting once in a while does not a relationship make.
Despite these semi-dramatic pleas from me for solving their two issues, please remember we are dealing with a Watchlist Elite company, who like Accenture, just stands far above the pack. Keep in mind I examined roughly 40 consultancies and five (5) won and only two emerged as Elites. That says a lot. EY has come a long way in the last year and will be going a long way in years to come. Now is the time to crank it up and make their impact and business what they say they want it to be; a business that is “building a better working world.” I have no doubts they will.
The CRM Watchlist 2014 Winners: The Suites: CRMnext, Infor, NetSuite, SAP, SugarCRM
Also coming soon:
The announcement for the 2015 CRM Watchlist registration.