2009: A Bad Year To Be A Cost Center

I don’t know about you, but it feels like 2001 all over again.  The 2001 tech crash was a huge wakeup call to those of us in high tech who thought the Internet boom would last forever…or at least until the next round of options vested.  The current economic crisis is casting the same pall over Silicon Valley, where most large tech companies rely on the financial services (FS) sector for a chunk of revenue.  Even companies that don’t sell to FS sell to other industries that DO sell to FS.  We’re all going to feel this one, maybe now, maybe mid next year.

With most companies gearing up for their 2009 budget process I suspect we will soon find out if support budgets are remaining the same for 2009 or falling.  In general, I think we are much better positioned for this recession than the last one.  Why?

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Support’s Perfect Storm Rages On: Incident Volumes Up; Self-Service Success Down

An SSPA partner asked me this morning for an update on my 2006 stump speech, “Support’s Perfect Storm,” which documented how rising technical complexity was driving up incident volumes.  I just pulled the latest 2008 AFSMI/SSPA Benchmark numbers and compared them to my information from 2006, and I am sorry to say:  The Perfect Storm continues to run rampant over technical support operations.  With the financial services crash certain to create even more cost cutting for support operations, will technical support find itself riding out 2009 in a FEMA trailer?

Has CRM embraced eService…finally?

I, along with every other analyst, started predicting that CRM vendors would acquire all of the eService (knowledgebase, multi-channel service) vendors years ago. And we were wrong. As a Siebel executive once told me, “We have never lost a CRM deal because we didn’t have eService.” For a while there were a lot of partnerships and integrations, but even those have lost steam as CRM vendors started focusing solely on infrastructure (Fusion, NetWeaver) and ecosystems (AppExchange) instead of functionality.

Maybe, after all these years, CRM vendors are finally hearing that handling more than phone calls is important. Check out these two recent announcements:

What’s Missing from the Web 2.0 ROI Story

In 2007 and 2008, companies made huge investments in Web 2.0 technology for online communities. Some were savvy, innovative early adopters, but many jumped on a bandwagon they didn’t quite understand yet.  The situation mirrors the CRM mania of the late 90s and early 00s, when companies had an edict from above to implement CRM, so they did.  Then a couple of years later they were left asking, “So what was the business value of this huge project?”  

I think that is what 2009 is going to be for the service industry:  a lot of Web 2.0 hangovers, and a renewed push to monetize the investments they’ve already made.

I’m gearing up on this topic to publish some research in 2009 on the best practice metrics and ROI story for communities, and I’ve run into a functional gap in Web 2.0 solutions that prevents some huge potential ROI: bridging internal and external communities. Here is a an example scenario:

Customer calls tech support with a system error. The tech support engineer (TSE) does an enterprise search and finds a discussion thread in the customer forum about the same problem. In the discussion thread, a customer ‘expert,’ a PS employee, and a development employee all collaborated and solved the problem. Using IP presence awareness, the TSE can see that the customer expert, PS and development people are all online, so he invites them all into a real-time collaboration with the customer. With all the experts in one desktop sharing/web chat session, the problem is resolved in minutes.

The stumbling blocks here are in two areas: Internal vs. external discussion forums, and universal Web chat/collaboration:

The ROI of KM: Building a Business Case for KM Investments

Some of the most frequent questions I receive from SSPA members are in regard to the ROI of knowledgebases (KBs) and knowledge management (KM) for support.  Questions like:

1. How do you measure KM effectiveness or ROI?
2. How do my KM results measure up to other companies?
3. How do I estimate the ROI for a proposed KM project?

Based in part on a presentation I built for a an Inquira webcast series on this topic, I finally committed to paper an overview of the metrics impacted by support knowledgebases, along with benchmarks (from the SSPA benchmark database) for each metric (where available), with the overall industry average as well as averages for B2B and B2C support.  The metrics are divided into 4 different areas of KM impacts:  Employee Productivity, Interaction Volume and Cost, Customer Satisfaction, and (believe it or not) Revenue and Repurchase.  I also have a section on emerging metrics for customer discussion forums/communities.

For long time KM experts, this may not seem like rocket science.  But what I have found is that different companies track, and care about, different metrics.  While most of the metrics are interrelated, some companies are only concerned with particular views of the data, so I felt it was important to look beyond the usual productivity metrics and include how upticks in employee performance impact other areas.  Here are a couple of examples: