WEBINAR Build Systems Of Insight To Deliver Great Customer Experiences Brian Hopkins, Vice President, Principal Analyst, @PracticingEA Ted Schadler, Vice President, Principal Analyst, @tedschadler May 21, 2015. Call in at 12:55 p.m. Eastern time

Agenda Why is big data not enough to improve customer experiences? Build systems of insight to consistently turn data into action. How will you build systems of insight? What do you get from systems of insight that’s different?

Great customer experiences pay off Sources: Forrester Research, Watermark Consulting (http://www.watermarkconsult.net/) Source: Forrester Research and Watermark Consulting

In the age of the customer, we gather massive amounts of data Financial data Sales data Product data Transaction data Customer data Third-party data Behavioral data Social data Mobile data Environmental data Sensor data

“We are drowning in data and starving for insight.” — Global Bank Image source: Undercover Tourist (https://www.undercovertourist.com/)

Big data promises insights discovery 65% of firms will be using big data analytics to optimize digital experiences. 56% of firms will have implemented Hadoop. 38% of firms will have spent more than $10 million on data and analytics. . Base: 3,005 business and technology decision-makers Source: Forrester’s Global Business Technographics® Data And Analytics Survey, 2015

With that data and investment, surely . . . Customer experience teams can show how great experiences drive business outcomes. Marketing teams can deliver deeply personal, contextually relevant experiences. Service teams can anticipate a customer’s problem before she calls. Commerce teams can optimize product targeting in every channel. Product teams can predict whether their dynamic pricing based on context will work. Sales teams can know with certainty what each customer really wants.

“You’ve got to start with the customer experience and work backwards toward the technology — not the other way around.” Steve Jobs Apple Worldwide Developer Conference, 1997* Data and insights are also not enough on their own to drive great customer experiences. Image source: YouTube (https://www.youtube.com)

We’ve been solving the wrong problem Too much data “All the data we need will never come from one place. There is too much of it.” Carlo Torinai Data Scientist Tesla Motors Not enough action “Data scientists are great at finding insights, but it’s hard to keep them focused on the the outcomes our business needs.” Assad Shaik Chief Data Scientist

Insights masters don’t focus on big data — they consistently turn data into action

They talk of gaps between data and action Source: April 27, 2015, “Digital Insight Is The New Currency Of Business” Forrester report

They link data and action through digital insights and continuous learning All possible data Digital insights All possible actions Right data Effective actions Learnings Source: April 27, 2015, “Digital Insight Is The New Currency Of Business” Forrester report

Example: Stitch Fix has mastered insights Stitch Fix predicts what a customer wants before she even orders it — clothes you want show up at the door. The company is insights-driven where predictive models learn from people, and people learn from models. Stitch Fix has built digital insights and learning into their business — a constant state of controlled experimentation. The result: a disruptive shift in business models and fashion retail experiences

We call this systems of insight The business discipline and technology to harness insights and consistently turn data into action

Systems of insight power digital business engagement touch people. Systems of insight power digital business. Systems of automation connect the physical world. Systems of record host processes. Source: April 27, 2015, “Digital Insight Is The New Currency Of Business” Forrester report

How systems of insight turn data into customer-obsessed action Implement digital insights directly in software. Embed tested insights into everyday work to improve customer engagement. Empower employees to make insight-driven decisions.

A system of insight is an operating model: people, process, and technology working together Insights team Insights-to-execution process Possible Actions All Data Right data Effective actions Digital insights architecture

You will have many insights teams Business leader Manages the team to optimize a specific business outcome Technology leader Responsible for insights testing, implementation, and architecture Domain experts Recognizes insights worth the investment Developers Test and implement insights in software and business rules Data scientists Build models and exercises them to reveal potential insights Data engineers Gathers, assesses, integrates, prepares, and manages data Source: April 27, 2015, “Digital Insight Is The New Currency Of Business” Forrester report

Master an insights-to-execution process to consistently turn data into effective actions 1. Develop and test insights 2. Implement insights Possible actions All data Right data Effective actions 4. Capture new data to extend insights 3. Measure and track results

Shutterstock has mastered insights-to-execution Stock photo and video company SSTK valued at $2.2B 55 million royalty-free images Grew 39% last year An entirely digital business Shutterstock wins when customers find and engage with images. Multidisciplinary teams focus on pricing, engagement, and so on. Shutterstock uses a companywide process to test 100s of insights to validate a handful that matter. Hadoop is the foundation for insights discovery.

You will need a digital insights architecture Sales and marketing Operations Product design . . . lots more Insights-driven applications Data feed management Execution engines Insight discovery and implementation tools Collaboration and governance tools Services framework Federation and virtualization Big data management Cloud services Insight Fabric Image source: Find Icons (http://findicons.com/) and Brightfind (http://www.brightfind.com/)

How Tesla uses a system of insight to create a great experience Improve CX by fixing before problems happen. Team works together to turn data into action. Insights services let engineers find and test insights. Developers implement insights firmware (create action). Engineers Firmware developers Data scientists engineers Insights services Pipeline

Systems of insight will redefine digital winners and losers Firms that treat big data as an IT function Firms without the willpower to democratize data and insight Vendors focused on closed insights technology systems Data-driven Winners Firms that link data to action through digital insights Insights-driven business service companies Service providers building insights competencies Vendors building digital insights ecosystems Insights-driven Image source: Pearson (http://dev.assets.pearsonschool.com/asset_mgr/pending/2013-09/Data-Driven_icon.png)

CIOs: Partner with your CMO to fund the first insights teams and process Look at the customer insights team for best practices. Extend your big-data investments to create a digital insights architecture. Push projects that harness insights in customer and customer-facing employee software. Start with digital customer experiences: They are ready for insights-to-execution.

The building blocks of digital insights are well-researched and available Source: April 27, 2015, “Digital Insight Is The New Currency Of Business” Forrester report

Brian Hopkins +1 773.578.7263 bhopkins@forrester.com Ted Schadler +1 617.613.5975 tschadler@forrester.com Twitter: @tedschadler

What’s different about systems of insight? The same Different The need for all the data Insights discovery Most of the technology Most skills and investment Insights teams are multidisciplinary and embedded in operations. Insights aren’t insights until proven valuable and implemented in software and customer engagement. The digital insights architecture extends into collaboration, execution, feedback, and insights fabric.