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Thought Leaders in Cloud Computing: Mal Postings, CTO, IT Advisory Services, Ernst & Young (Part 7)

Posted on Monday, Nov 7th 2011

Sramana Mitra: Let me give you another example, and let’s have a bit discussion about another trend within the social CRM space. We have another company called Crowd Engineering that is actually getting traction with large companies. Both of the companies I mentioned are getting traction with very large accounts. What Crowd Engineering is saying is, you have a customer support organization. For consumer electronics, telecom, and similar companies, the call volume in a customer support organization is very high. The margin pressure is very high, so each call that you have to take costs you in margins.

You have level one, level two, and level three customer support. Crowd Engineering is saying, why don’t we introduce a level zero customer support in your organization? We are going to set up such that customers will be able to talk to other expert customers. People who know the system inside out can solve their problems and are willing to engage. We have most of these, especially in companies that have strong brand value and passionate customers who are happy to show off their expertise and knowledge. Crowd Engineering is tapping into that class of customers, engaging them. The thesis is you can divert a large chunk of calls that will never have to touch a customer service rep. It will be tackled by expert customers. This translates into very high ROI.

Mal Postings: Yes, absolutely, because the touch point and the cost of servicing those calls, obviously, goes down. But then the key thing here is where is your book of business in terms of what kind of calls can be serviced that way? My argument is that I think you’re right, but I only think 15% of calls could be serviced that way. What about the other 85% of calls that cannot be serviced through the new channel that you just talked about?

SM: Obviously, there’s only a percentage, but the examples I’m giving you are examples of areas in which the social CRM trend is where I’m seeing the maximum, hard ROI, real business process impact. There’s some amount of that going on within the enterprise and expertise location. That is another area where I’m seeing a good adoption of the social trend. You started off talking about the suppliers. I think the supply chain is less active. Is this your observation as well? My observation is deals with the customer relationship management side and inside the enterprise in expertise location and collaboration. That’s where the social trend is higher than in the supplier side, but maybe I haven’t seen enough, yet, on the supplier side.

MP: The supplier side is looking at real-time engineering. We’re looking at things like Java space technology where you can relocate in transit logistics around the world. That is key from my point of view. You have a business model where you say, I know certain materials are going to be in certain warehouses at a certain time. Now, we have technology that can do real time engineering through Oracle Sun Microsystems called Java-based technology.

SM: Absolutely. There’s a lot of real-time technology, yes. But that’s not social. That is real-time technology.

MP: No. I’m talking supply chain now. I’m talking under the cover supply chain, how we completely knock 50% off their budget.

SM: Oh, yes. The impact of technology on the supply chain side is huge right now. Now, I want to pick your brains on a slightly different topic. Given where you sit and the kinds of systems you’re architecting, where do you see gaps? Let’s say you’re architecting a solution, and you want to do something, but you can’t find off-the-shelf vendors. You have to recommend custom development. What are some of the areas where you see this phenomonen?

MP: That’s a great question. What’s happening at the moment is that the whole market is moving to a single market source outsourcing provider like an EDS or IBM. The market is now moving into best of breed. We talked about that before, and you’re right, there are gaps. The second example is video conferencing. I’m a company, and I’ve just contracted with, let’s say Microsoft, for Exchange and SharePoint, and then I’ve contracted separately through Verizon, for my networking. The key thing is from a service point of view, these do my video conferencing. And Microsoft would say yes to providing my bundled offer from a contractual point of view, and then the network provider, whether it’s AT&T, Verizon, or whatever, would say, hang on. We’ve already bundled in this service. Where companies are naïve at the moment is in understanding the contractual overlaps. Then the technical overlaps are different from the contractual overlaps. I think there are two different gaps there.

The contractual overlaps are easier to argue and make some kind of determination on. But technically, you have to say, who really is good at doing video conferencing? I’ll give one example. I worked with a large customer that went completely with one client for the email collaboration. There’s a big trade-off around the gaps in the market, as you just said, and around video conferencing. This one company was saying, yes, we can do video conferencing for you. And the other company was saying, from a networking point of view, I’m not your networking provider. This guy over here who is doing your Internet collaboration and email has no idea about networking. And to be honest, that was absolutely right. Because this client I had was global, and when you’re looking at doing global video conferencing and the linkage between not just the voice, the data, and so on, then the networking provider, from an SLA point of view, was more equipped to that than your SLA from the email provider. We determined that email is more around data. But I think for voice and video, it goes more to the network provider. And that is a huge decision for many companies right now.

This segment is part 7 in the series : Thought Leaders in Cloud Computing: Mal Postings, CTO, IT Advisory Services, Ernst & Young
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