Business Communications Advantage Research: A Vonage-IDC Research Study. September 2017
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1 Business Advantage Research: A Vonage-IDC Research Study September 2017
2 Context Business communications are undergoing massive change. Mobile devices, mobile apps, social media, software collaboration tools, etc. are re-inventing workforce and customer engagement. Furthermore, use of the cloud drives new levels of efficiency and flexibility to all communications tools. It is clear that these technologies are being adopted to varying degrees by enterprises in all sectors and of all sizes. Less clear is the significance of the impact these technologies have on business success factors. Vonage commissioned IDC to identify what real quantitative business advantages can be gained by using leading edge cloud communications. IDC Visit us at IDC.com and follow us on 2
3 Summary In a survey of 805 medium and large US enterprises, IDC found that leading edge cloud communications users or powerbrokers do gain measurable business advantages. Specifically, the research exposed three major differences in business performance for companies using both unified and contextual cloud communications: 47 percent improvement in speed-to-market for products and services 42 percent improvement in customer satisfaction and loyalty 34 percent reduction in costs leading to increased profitability IDC Visit us at IDC.com and follow us on 3
4 Powerbrokers The most successful companies are defined as communications powerbrokers powerbrokers have 4 important characteristics Business communications are considered strategic assets Business communications are much more than voice, e- mail, and contact centers They use cloud, workflow integration, all channels, and information context to empower their communications They are not necessarily digital natives IDC Visit us at IDC.com and follow us on 4
5 Powerbroker Characteristics 1. Business communications are considered strategic assets for successful companies Strategic communications enable workforce productivity and improve customer experience Strategic communications solve business problems, create exceptional digital experiences 2. Business communications are more than voice, and call centers Dependence upon telephony is giving way to a wide range of communications tools -- social media, text, chat apps, video and web conferencing, etc. Companies must be able to interact with customers in the manner in which they prefer to be communicated. 3. Successful companies unlock the power of business communications with: Cloud. Flexibility, scalability, pay-as-you-go business model Workflow integration. integrated with CRM, website, ERP, billing invoicing, etc. Channel agnostic. Use the communication channel most appropriate for the content and the correspondent Context-awareness. Conversations in context of information about the customer and transaction 4. They are not necessarily bornin-the-cloud, digital natives Digital natives as well as large established businesses in a wide variety of industries are at the leading edge of this trend. IDC Visit us at IDC.com and follow us on 5
6 Most Companies Are Not Powerbrokers A few companies maximize their business communications advantages today. But the majority have not made the investment needed, and many lag far behind. Based on the survey research, we created a 4-level index to characterize all companies according to how successfully they leverage cloud communications for business advantage. The 4 levels are: 1. Powerbrokers are sophisticated users of cloud communications 2. Respecters have made a partial move to the cloud and are planning more 3. Skeptics are unsure of the cloud s benefits. 4. Unaware have little knowledge about the cloud s advantages The communications advantage index provides a mechanism by which any enterprise can measure its own business communications success and gain insights into improving their metrics. IDC Visit us at IDC.com and follow us on 6
7 Index Categories Unaware Skeptics Respecters Powerbrokers Percentage of sample 16% 36% 34% 14% Representative industries Company age technologies used Key technologies infrastructure Digital transformation Integration & automation CPaaS for communications Customer support and communications Business & customer service KPIs Real estate, government, education, energy, utilities Oldest; < 3% of companies under 5 years old are Unaware Use or plan to use fewest technologies Telephony, web and video conferencing On-premise systems dominant More than three quarters have no DX plans Very low use of automation & integration 1% use CPaaS today; < 2% will w/in 24 months Media, insurance, manufacturing Old; 45% of companies more than 10 years old are Skeptics Use or plan to use lower than average number Web and video conferencing, SMS On-premise systems in the majority 40% completed or in process Low use of automation & integration < 10% use CPaaS today; < 30% will w/in 24 months Banking, telecommunications Young; nearly 60% of companies under 5 years old are Respecters Use or plan to use higher than average number IM, SMS, web and video conferencing Mix of public and private cloud dominant More than 70% completed or in process High use of automation & integration > 30% use CPaaS today; > 60% will w/in 24 months Retail, transportation, IT, resource industries Youngest; > 50% of companies under 2 years old are Powerbrokers Use or plan to use most technologies Social networks, IM, SMS Public cloud dominant Majority completed; nearly all in process Very high use of automation & integration > 70% use CPaaS today; > 90% will w/in 24 months Poor Mediocre Very good Extremely good Poor Mediocre Good Extremely good IDC Visit us at IDC.com and follow us on 7
8 Key Findings IDC Visit us at IDC.com and follow us on 8
9 Powerbrokers Have Greatly Superior Business KPIs Q28. MEAN SUMMARY TABLE - Over the past 3 years, what has been your company's change in percent for business KPIs? Faster time to market for new products and services 16.1% 34.3% 31.8% 47.3% Improving customer satisfaction/loyalty 8.4% 17.5% 28.6% 42.1% Reducing cost 18.2% 15.5% 17.7% 34.4% 0% 10% 20% 30% 40% 50% Powerbrokers Skeptics Respecters Unaware Base=Respondents indicated measures of performance are important to determining the success of organization Note: Managed by IDC's Quantitative Research Group; Data Weighted By Industry By Employee size; Use caution when interpreting small sample sizes. Source: IDC Thought Leadership Practice - Business Communication Index Survey, IDC, April, 2017 IDC Visit us at IDC.com and follow us on 9
10 Powerbrokers Also Have Greatly Superior Service Customer Service KPIs Q32. MEAN SUMMARY TABLE - Over the past 3 years, what has been your company's change in percent for customer service KPIs? 36.5% Decreasing time to resolution 4.2% 11.9% 20.9% 32.9% Decreasing hold/wait times 9.7% 18.4% 24.8% 29.7% Improving case resolution rates 11.5% 18.7% 28.4% 0% 10% 20% 30% 40% Powerbrokers Respecters Skeptics Unaware Base=Respondents indicated measures of customer interaction and communication are important Note: Managed by IDC's Quantitative Research Group. Note: Data Weighted By Industry By Employee size Note: Use caution when interpreting small sample sizes. IDC Visit us at IDC.com and follow us on 10
11 Powerbrokers Have Highest Self- Assessment of Workforce Solutions Q2. How would you rate your organization's communications solution for general workforce communications (i.e., phone, , IM, directory)? Powerbrokers 53.7% 34.5% 11.5% Respecters 17.5% 45.2% 27.7% 4.9% 4.6% Skeptics 26.0% 57.3% 14.8% Unaware 3.0% 57.7% 25.3% 9.8% 4.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Leading edge compared to most of the organizations in our market On-par with most organizations in our market Lagging behind most organizations in our market Somewhat ahead of most organizations in our market Somewhat behind most organizations in our market Don't know N=805 Base=All Respondents Note: Managed by IDC's Quantitative Research Group; Data Weighted By Industry By Employee size; Use caution when interpreting small sample sizes. Source: IDC Thought Leadership Practice - Business Communication Index Survey, IDC, April, 2017 IDC Visit us at IDC.com and follow us on 11
12 64% of Powerbrokers Using SaaS for Environment Q7. Which of the following best describes your organization's primary voice communications environment? Powerbrokers 63.8% 15.4% 6.6% 14.2% Respecters 39.7% 37.0% 12.1% 9.6% Skeptics 8.5% 16.9% 13.7% 45.7% 15.2% Unaware 2.4% 9.6% 13.0% 37.4% 37.6% 0% 20% 40% 60% 80% 100% Public cloud communications platform Mix of hosted and on-premise Don't know Private cloud communications platform On-premises system located on-site and managed in-house High performers know and appreciate the value of cloud. N=805 Base=All Respondents Note: Managed by IDC's Quantitative Research Group; Data Weighted By Industry By Employee size; Use caution when interpreting small sample sizes. Source: IDC Thought Leadership Practice - Business Communication Index Survey, IDC, April, 2017 IDC Visit us at IDC.com and follow us on 12
13 Powerbrokers Are Much More Likely to Manage Their Own Environments Q8. How is the deployment and day-to-day operations of your organization's voice communications environment managed? Powerbrokers 72.0% 21.8% We manage our communications environment entirely in-house using internal resources Respecters 42.6% 50.3% 4.7% We outsource some of the management of our communications environment Skeptics 38.8% 34.2% 11.0% 12.6% We outsource most/the majority of the management of our communications environment We outsource all management of our communications environment Unaware 35.1% 21.5% 18.1% 23.1% 0% 20% 40% 60% 80% 100% (% of respondents) Don't know Digital leaders 72% build and manage communications applications in-house; modern, open, flexible CPaaS tools make this possible. N=805 Base=All Respondents Note: Managed by IDC's Quantitative Research Group; Data Weighted By Industry By Employee size; Use caution when interpreting small sample sizes. Source: IDC Thought Leadership Practice - Business Communication Index Survey, IDC, April, 2017 IDC Visit us at IDC.com and follow us on 13
14 71% of Powerbrokers Have CPaaS; Skeptics Need an Extra Push Q9. Does your organization use a Platform-as-a-Service (CPaaS) solution to enable some or all customer or internal communications? CPaaS is a cloud communications platform that allows enterprises to create customized business applications, web sites and mobile apps that integrate voice and messaging communications capabilities using APIs made available from third parties. For example, CPaaS technology enables Uber to communicate with passengers seamlessly without users having to disclose their cell numbers. Powerbrokers 71.0% 19.8% 9.0% Respecters 31.9% 29.2% 26.6% 5.0% 4.9% 2.2% Skeptics 9.4% 17.8% 32.2% 3.7% 24.2% 6.1% 6.7% Unaware 5.1% 4.0% 54.8% 17.2% 17.9% Currently use Plan to use within the next 24 months Plan to use in more than 2 years Considered/trialed but rejected using Do not use/have no plans to use Not familiar with/never heard of it Don't know The value of CPaaS is understood by the high and highmiddle groups who are using or planning use of CPaaS. In contrast, the skeptics are aware of CPaaS, but have no immediate plans to implement it. They need a compelling case to trigger them to take action. N=805 Base=All Respondents Note: Managed by IDC's Quantitative Research Group; Data Weighted By Industry By Employee size; Use caution when interpreting small sample sizes. Source: IDC Thought Leadership Practice - Business Communication Index Survey, IDC, April, 2017 IDC Visit us at IDC.com and follow us on 14
15 Leaders Have Least Commitment to Telephony Phone Calls, Highest Commitment to Social Networks Q14A_1 - Q14A_9. Today: Please rate the following communications technologies by their importance to your company today; and how important you expect them to be in 3 years. (Responses show top-2 box on scale where 1 = not at all important, 5 = extremely important.) Social networks Instant messaging/im Web conferencing SMS/text messaging Audio conferencing Video conferencing Chat apps Telephony Collaboration tools 3.5% 9.5% 11.9% 17.0% 18.0% Telephony is one of the least important communications technologies to leaders, but one of the most important to laggards. Appreciation for the importance of social networks, SMS/text, chat apps, and collaboration tools are the greatest separators of leaders and laggards. 20.8% 23.6% 26.6% 20.7% 28.1% 28.1% 33.3% 41.4% 36.4% 37.1% 38.4% 32.6% 37.4% 42.2% 45.4% 46.4% 0% 20% 40% 60% 80% 100% 59.6% 57.9% Powerbrokers Skeptics 63.9% 66.5% 64.9% 65.7% 64.0% 66.7% 73.1% 72.0% 80.3% 78.0% 75.7% 86.7% 84.9% Respecters Unaware N=805 Base=All Respondents Note: Managed by IDC's Quantitative Research Group; Data Weighted By Industry By Employee size; Use caution when interpreting small sample sizes; Scale: 1-Not at all important 5-Very important Source: IDC Thought Leadership Practice - Business Communication Index Survey, IDC, April, 2017 IDC Visit us at IDC.com and follow us on 15
16 Powerbrokers More Likely to Have Digital Transformation Initiatives Q17. Digital Transformation (DX) uses digital technologies (mobile apps, social networks, cloud services, big data analytics, etc.) to achieve measurable benefits, i.e. cost reduction, revenue increase, service improvement, etc. These changes affect customers, employees, partners, and the organization itself - Is your company currently planning on undertaking, or have you recently undertaken a Digital Transformation (DX) initiative? Powerbrokers 64.0% 34.8% We have recently undertaken/completed one or more DX initiatives Respecters 22.6% 50.8% 18.0% 8.6% We are currently in the process of implementing one or more DX initiatives Skeptics 11.7% 28.8% 25.1% 34.4% We are planning one or more DX initiative(s) Unaware 17.5% 78.1% We currently have no plans to undertake DX initiative(s) 0% 20% 40% 60% 80% 100% (% of respondents) N=805 Base=All Respondents Note: Managed by IDC's Quantitative Research Group; Data Weighted By Industry By Employee size; Use caution when interpreting small sample sizes. Source: IDC Thought Leadership Practice - Business Communication Index Survey, IDC, April, 2017 IDC Visit us at IDC.com and follow us on 16
17 Survey Dimensions & Methods IDC Visit us at IDC.com and follow us on 17
18 Survey of 805 decision-makers in USbased organizations Respondent: IT/Telecom, marketing and customer care C-level, VPs, & directors. Themes: business voice & text communications requirements & challenges. Number of employees 5,000 Or More 250 to 499 Vertical Sectors Travel/hospitality 2,500 to 4,999 21% 10% 12% 18% 500 to 999 Other 31% 13% 12% Health 1,500 to 2,499 20% 19% 1,000 to 1,499 7% Banking 12% Transportation 12% Retail 12% Real estate Source: Business Success Index study , IDC. April, N = 805 US enterprises. IDC Visit us at IDC.com and follow us on 18
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