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SAP acquires Qualtrics Intl: Combining X & O Data for the Experience Economy

by Chris Gera, Managing Director, EVP of Research & Insights, Service Council

On January 23, 2019, SAP completed its acquisition of Qualtrics International Inc. for US$8 billion in cash (Release). SAP, a Service Council Customer, is excited to be accelerating the new XM category by combining experience data (Qualtrics) with operational data (SAP) to enable organizations to ignite their experience economy strategies. This transformational acquisition we expect will deliver value to SAP customers by providing a unique ability to create highly differentiated offerings. This is expected to have positive impacts on a company’s supply chain, employees, networks and core processes, according to the release.

At the 2018 Service Council Symposium Joe Pine, the author of The Experience Economy, shared with those in attendance the accelerating economic movement from the service economy to the experience economy. Joe also spoke at the 2017 Qualtrics Insight Summit (Watch) extolling that “experiences are a distinct economic offering”. The experience economy is the progression of economic value as companies use their current customer service interactions to figure out exactly what their customers want. Allowing them to turn their old supply chain of mass production (producing more variety) in hopes customers will buy, to one of mass customization (producing in response to customer desires) allowing them to be more efficient & effective.

Most companies we speak with today are focused on improving their customer experience. Companies are measuring outcomes to determine if the customer is benefiting from a nice, easy, convenient and effortless experience doing business with them. These outcomes do not drive experiences…as Pine goes on to say that in order for companies to create an experience it must achieve the following…

  • Is it memorable for the customer?
  • Is it inherently personal for the customer?
  • Is the customer valuing the time they spend with you?

As leaders in the service space we have been focused on “saving time”…saving time for our people to complete more work on a daily basis and saving time for our customer so that they can derive value with choosing how to spend that time. As you shift your organization to encompass experiences, you’re going to be evaluating your customer feedback through a different lens…one that your customer is going to determine if their time with you was “time well spent”. And when you think about the multitude of ways we service our customers today, this isn’t just about an in person experience it also extends to encompass time spent interacting with you through chat, web, phone and email. All of those build resiliency in the brand experience you are providing to your customers.

This move marks another major step by SAP into the experience economy. Entrance into the space in this manner makes a lot of sense given the:

  • Increased interest in companies to find easier ways to link operational data to customer experience data
  • Increased need to integrate customer & operational data to create metrics that focus on delivering customer experiences
  • Organization strategy to build and deliver exceptional employee experiences in order to drive transformational customer experiences

We see a greater focus on customer experience across field service in the coming years. And we are seeing SAP moving in that direction as well, combining their mid 2018 acquisition of Coresystems with this most recent move with Qualtrics. Coresystems’ artificial intelligence (AI)-powered platform provides advanced scheduling of field service activities in real time, and easy-to-use mobile apps that enable service technicians in the field to perform installation, maintenance, and repair tasks. With its unique crowd-sourcing capabilities, service organizations can build and expand service networks beyond their own workforce.

In our recently completed 2019 trends research of over 100 executive service leaders, Service Leaders are also telling us their #1 Key Area of Focus for 2019 is Customer Management & Experience Initiatives representing 44% of the respondents. And the top two major external forces impacting their business in 2019 are Workforce & Talent Shortage (59%) and Changing Customer Expectations – Service Delivery (55%). We see that this leads to internal concerns of being able to meet service demand with existing service resources as well as the experience they will be providing. More so, service leaders are also thinking about the work allocation to their highly skilled service workforce and augmenting this workforce with a more flexible labor pool while working to improve the customer experience throughout their service delivery network.

SAP Qualtrics

With these moves SAP is clearly committed to being the leader in combining the Operational (O-Data) with the Experience (X-Data) data to deliver a end to end operational and experience management system to its customers. This directly aligns them to what the market of service organizations is seeking. We believe doing so in a manner that will allow their customers to provide a dynamic workforce to deliver it. This platform will enable SAP customers to create a flexible and powerful service ecosystem with internal experts and external resources, including experienced freelance technicians. This will allow them to respond faster to their customers’ service needs, lower the cost of service, and support entirely new business models.

We will be interested and watching closely how this more integrated offering and approach to service success evolves. We’ve published content on both of these areas related to field service. First being the focus on creating and improving the customer experience across your service organization (Link). Second, check out our insight on creating an agile field service workforce (Link) and steps that an organization can take to address the retiring workforce crisis (Link).

Filed under:  AnalyticsBig DataBusiness insightBusiness intelligenceCustomer experienceCustomer experience managementCustomer managementData scienceGlobal service strategyService growthService transformationStrategy implementationVoice of the customer 

Chris Gera
Managing Director, EVP of Research & Insights,  Service Council

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