Progress Towards Systems of Engagement

In my recently concluded transformation series, I identified Systems of Engagement as a key enabler of the future enterprise. A recent Survey conducted by Forrester suggests that systems of engagement will soon rearrange the landscape of IT organizations, technologies, architectures, budgeting, funding, and governance. It is not surprising that in this age of the customer, systems of engagement are finally getting attention – but as the survey reports, they require more than organizations are prepared to deliver.

According to the survey, much less than 25% of IT spending goes to customer-facing systems today. Almost half of respondents report that their organizations are devoting between 10% and 25% of their IT spending to systems of engagement, and about 31% devote in excess of 25%. Survey respondents strongly suggest that spending on systems of engagement (SOE) is rising and will continue to rise during the next several years. Forrester reports that the trend toward increased IT spending on systems of engagement is strong; with 57% of respondents expecting to devote in excess of 25% of their IT spend. Although Forrester believes this represents a big rise in 12 months (from 31%), there is cause for worry about underinvestment in systems of engagement. This is problematic and consistent with what I am seeing.

In a different Forrester Report, we see just how critical systems of engagement are to the future enterprise. In this report, Forrester introduced the Mobile Mind Shift Index and determined that 21% of the adult online US population now expects that any information is available on any appropriate device, in context, at their moment of need. This index value is destined to go up in the coming years, putting more pressure on companies to make the right technology investments and support these systems.

As Forrester articulates, these systems need several key technologies, with a critical focus on back-office integration. The survey reveals that integration with back-office systems is the biggest barrier to system of engagement delivery. Yet based on the findings; companies are not investing to remove that barrier. The respondents ranked SOE integration with back-office systems seventh on a list of 10 potential investments. The fact that organizations still don’t see this as a critical priority is troubling to say the least.

After years of investment in messaging, integration brokers, SOA, Enterprise Service Buses, operational data stores, etc., integration with the back office remains the top issue. Forrester doesn’t see these prior integration methods as failures, but an acknowledgement that systems of engagement require three new forms of integration. Specifically:

1. Real time requirements – the collection, analysis, and delivery of information immediately or as it happens. Most back-office integration solutions are built to handle historical information. Many address bulk or batch access only. Providing context in the moment of need amplifies these real time requirements
2. New Devices – communicating with new devices in the systems of engagement world means the client is often a phone or other portable device rather than a PC or a desktop browser. As mobile increasingly becomes the face of engagement, this new form of integration becomes more acute
3. Management of interactions across channels – a consumer often starts an interaction on one device and wants to continue that interaction through a different channel. Many consumer-oriented organizations today deal with their customers through at least three or four channels — web browsers, stores, call centers, smartphones, and other mobile devices 

Integration is not the only challenge, as many new customer expectations require new systems. Forrester identifies several of these new customer expectations:

• To be treated as individuals – the often talked about segment of one. Targeting requires vastly expanded collections of both historical and real-time information, as well as advanced analytics to determine customer behavior and context both in the present and in the future
• Easier to do business with – or as the survey defined it “easier interactions with us.” Forrester concludes that to make interactions simpler, enterprises often must replace their eCommerce and portal front-end applications, as well as reorganize some of their back- office integration systems
• Self-service – Forrester finds that customer self-service applications are almost always either new development or new packaged applications, as the logic behind these applications is much more extensive than the average web-access system
• Interact via smartphones – as Mobile increasingly becomes the face of engagement, this expectation is a critical driver. Forrester underscores the fact that mobile devices are distinct technical environments requiring new code. This is especially true when firms rely on native mobile applications for their customer interactions, but less true when they use mobile web designs
• Omni-channel experience – a consistent treatment across channels. Forrester describes a cross-channel system as one that identifies customers and their context, and coordinates session state, content, and master data. Their belief is that each of these activities calls for new IT investments in identity management, event collection and analysis, content and master-data management, and application servers and gateways 

The research also finds that the role of IT in delivering these systems will be as a resource broker. Forrester concludes that IT will likely broker and guide – but not own – end-to-end systems of engagement delivery. They see IT leaders as advisors on strategy and technology, project organizers, shared services providers, and delivery partner brokers. In their view, IT will not own all aspects of systems of engagement, as external agencies and consultants will do much of the delivery, while business leaders will control much of the funding for systems of engagement projects. Other findings: 

• Marketing leaders frustrated with IT’s inability to serve their needs, take their IT spending on systems of engagement to outside agencies and consultants
• Many enterprises today fund their systems of engagement from two sources — the IT budget and external spending often associated with “rogue IT.” More and more funding for systems of engagement comes from outside the IT budget
• Alignment between IT and the business in the age of the customer will be different from what it was in past eras
• The rise of systems of engagement presents an opportunity to expand the historical leadership of IT. Many respondents expect to see matrixed organizations that explicitly connect IT and business teams
• IT must design faster, more flexible delivery processes. Application delivery processes optimized for system integrity miss the key need of systems of engagement — fast delivery and adaptability
• Systems of engagement projects move faster, from idea to initial delivery to first update, than other kinds of IT projects. Traditional requirements processes are too slow to keep up, and requirements are fuzzier than ever

The survey brings cause for optimism and concern. I can say from experience that many C-Level executives have still not heard the term “Systems of Engagement.” What are you seeing?

For more information on the move towards systems of engagement, see these recent industry articles.

Two Tiers – Systems of Record and Engagement

Big Data and Telco

Ten Ways to Build Systems of Engagement