Transforming the Abilities of Workers with Online Learning Platforms: An Update on Coursera

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

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It wasn't that long ago that the Learning and Development department of a Human Resources group had a paper course guide that one could order through interoffice mail. This guide was matched nicely with a set of physical classrooms and slowly changing learning content provided at facilities around the organization. Onboarding and keeping up to date with one's career skills was fairly straightforward

For better or worse (and fortunately, it mostly seems the former), those days have completely disappeared in the face of a near-total revolution in learning technologies. Driven by rapidly changing digital capabilities, a faster, more complex pace of business, and the rise of the Internet, we are witnessing the emergence of potent new models for learning that seem to either work better, can fit more easily into workers' lives, or are much cheaper. Or all three. Online learning platforms, adaptive learning, peer-based learning, MOOCs, and other advances are now all the rage in corporate learning circles, matched by new consumer-style learning solutions that look a great deal more more like Netflix or YouTube than a traditional LMS.

While creating a beta version of my new Astrochart on Digital Learning Trends (see below), I am amazed at the innovation and energy in the space. And the economics: Digital learning is a huge global business today, on track to be a $139 billion industry by 2023, with a 29% annual growth rate, faster than the not all that much bigger cloud industry itself. In short, digital learning in its numerous present forms is currently a very in-demand resource for both individuals and enterprises to help prepare hundreds of millions of people to enter and stay in the modern tech-centric workforce today. 

Coursera's Multi-Product Offering Fits Into a Number of Categories on the Digital Learning Trends Astrochart

Like so many other industries touched by technology, digital learning is very much disrupting the old industries of education (universities, business schools, and traditional corporate learning and development, to name just three), while creating whole new ones. To further add to the confusion to education departments and L&D teams seeking to modernize what they offer to employees or the general public, is that the terminology in the space is quickly evolving and/or shifting, as well as overlapping and duplicative in many cases. For example, the difference between a learning management system (LMS) and an online learning platform (OLP), forming the main core of the digital learning experience today for many learners at businesses just isn't that clear today. One is perhaps more aimed at educators and older learning models while the other is arguably more aimed at the student experience and uses newer models of learning. Yet there is litlte consensus on what to call these so-called next-generation LMS systems.

The educational challenge in organizations today is very real and truly profound: Today's skills have the shortest lifespan of any time period in human history. Educational needs have increasingly become situational and just-in-time. Sometimes a skill might need to be acquired and used only over a matter of months, then a new replacement skill comes along, especially in the tech industry. Continuous learning has thus become a matter of top importance to workers and businesses, far beyond a nice-to-have. The bevy of new learning tools, techniques, and technologies that exists now -- with more emerging all the time -- make it a very exciting time, as well as a challenging one, to navigate in order to provide an effective and sustainable enterprise learning program that will meet stakeholder needs. Fortunately, as we'll see, more a strategic sensibility -- with matching capabilities -- is appearing in today's digital learning platforms to meet modern needs.

Related Reading: My 2020 Predictions for the Future Of Work

A Snapshot of Coursera: A Pioneering Leader in Digital Learning

I recently had a chance to get an update on one of the top online learning platforms in the industry today, Coursera. The company was founded in 2012 by Stanford professors Andrew Ng and Daphne Koller as a massively open online courses (MOOCs), and has since evolved to offer a sophisticated multi-product learning system that provides online instruction, certificates, applied learning, and degrees backed by assessments that verify what a student has achieved.

As of 2020, the company has 47 million registered learners, 200 university and industry partners, and over 2,200 entities using its Coursera for Business, Coursera for Government, and Coursera for Campus offerings. These last three are relatively new however, and launched in 2016,  2017, and 2019 respectively, demonstrating a steady and sustained rate of growth and product innovation.

The company offers a variety of business models, which range from its original fee-based model for completion certificates, a subscription model that lets learners use as much as they want, to more costly master's degrees. Coursera offers its products at a wide range of prices. There are thousands of courses that are free to audit, as well as so-called "Signature Tracks” that cost up to $100. Coursera's Specializations, which are a series of courses on a specific topic like data science (the single most popular category of Coursera specializations, by the way), typically range from $39 to $89 in the form of a monthly subscription. The company's more traditional online degree programs range from $15,000 to $30,000, while its Coursera for Business has a standard price of $400 per employee per year, although these are likely starting points for negotiation with larger customers.

Coursera is proud of its connection to top traditional educators like Duke University and Yale, as well the cutting-edge addition of what it calls applied learning, basically hands-on education, with its Coursera Labs and Rhyme projects.  While education has always tended to be data-driven, Coursera is also driving differentiation and network effects by wielding the insights that it's gathering from its 47 million learners, who can take over 240,000 different assessments, providing a rich tapesty of learning data that the company can turn into useful insights for individual learners, corporate customers, and its own product development. Coursera is a full digital platform intended as a modern answer to what organizations need today to develop, measure, and track skills. It has centralized learning program management capabilities like you would expect from a more-traditional LMS. It also has student progress tracking and analysis, as well as integrations back into three other types of associated systems: LMS platforms, the emerging category of learning experience platforms (LXPs), and HRIS systems, to build bridges to other parts of the organization that also manage or track learning.

The Coursera course catalog spans over 1,000 business courses, 700 technology courses, 380 data science courses, and hundreds more in health, social sciences, art, and the humanities, totaling over 3,700 courses covering 70,000 lessons and growing. While many of the company's competitors offer the equivalent of specializations or courses, Coursera also offers MasterTrack Certificates, Professional Certificates, degrees, as well as something called projects, which are learning courses specifically focused on end-to-end, outcome-based activities like building a new business or developing a finished software application. When compined with its applied learning offerings, Coursera offers numerous formats and several key modalities of education that will please most learning and development departments, excepting those looking for the most cutting-edge education technologies.

Perhaps one of the most intriguing capabilities of the Coursera platform is its Skills Graph, an aggregate data model of its courses plus its tens of millions of learners, its taught skills universe, millions of annual question attempts, and 7,000 participating companies. It's a mineable graph database (which are all the rage lately) to which Coursera applies a set of machine learning algorithms that they use to identify key skill trends and gaps in learner ability, as well as tailored, company-specific benchmarks to help the latter understand the current state of learning in their organization. Given the richness of this data and taking the size and longevity of the company compared to many competititors, I believe the Skills Graph is a vital strategic differentiator that can help companies analyze and understand the totality of their learning status across the workforce, then take proper advantage of the available opportunities. In other words, companies looking to maximize the potential of their workers can use the Skills Graph to build highly tailored, yet mass-customized learning programs that fit their workforce like a custom-made glove. These insights have real industry credibility and are being used today by numerous organizations, from the World Economic Forum to the MIT Technology Review.

Rounding out the firm's newer offerings are Coursera Academies in a number of popular subjects, with their Data Science Academy, which launched last year, leading the pack. This academy is designed to help organizations develop the ability of individuals to fill out important roles on a data science team (including data scientist, AI/ML engineer, data engineer, and data analyst), the academy starts with a basic foundational course called Data Literacy for Everyone. It then devles into specific functions and roles, from hands-on analysis to data-driven leadership for managers and executives. Academies are directed learning programs aimed at creating practical, functioning abilities and capable teams based on new skills, and then keep them skilled. Given the tremendous shortage of data scientists today, many organizations are being forced to develop their own in-house talent. Bottom line: Coursera's Academy is a more advanced model that is aimed directly at filling the talent gap in critical new skills in an enterprise-class way using existing staff, structured in a more sophisticated and effective way that's intended to address the inevitable doubters.

What's Next for Coursera and Digital Learning?

In a relentlessly crowded field that is getting harder to differentiate in, Coursera has a number of strong advantages going for it. First and foremost, Coursera stands out for its size (both in learners and content), maturity, and depth. It's also becoming authoritative enough that companies like Baidu are increasingly using Coursera's assessments as a definitive proof point when it comes to recruiting talent. The company is evolving its products to address the topical needs of the day for businesses (creating dynamically skilled employees that are kept current effeciently), while building a long-term data-based advantage with its Skills Graph that will be very hard to match for most other competitors.

As long as the company can maintain their topical appeal and keep its vast dataset fresh, it will be able to maintain its status in the industry as well as its price points, as one of the few "go to" online learning platforms in the industry. In an era of easy, informal, essentially free learning content that saturates the Web, Coursera has carved out and continues to maintain a leadership niche in that most important of traits in a pure digital educational institution, that of proven prestige and authority.

The challenge will ultimately be in navigating the rapidly innovating industry of educational technology as well as commoditization. If a new disruptive competitor discovers more effective ways to deliver learning, or the closes in with the same quality of offerings, but at a commodity price point, then it may be challenging for the company, especially as competitors like LinkedIn Learning and Udacity attempt to close the gap. It was impressive to see their latest progress however, and I do believe they will keep up the pace of innovation enough to ward off most competitors for the foreseeable future.

Additional Reading

How the Gig Economy is Transforming Work in the Enterprise

Creating the Modern Digital Workplace and Employee Experience

The Digital Transformation of Learning

Read all of my Future Of Work Tweets

Market Move News Analysis - Kronos and Ultimate Software Enter Definitive Merger Agreement

Holger Mueller

Vice President and Principal Analyst
Constellation Research

Holger Mueller is VP and Principal Analyst for Constellation Research for the fundamental enablers of the cloud, IaaS, PaaS and next generation Applications, with forays up the tech stack into BigData and Analytics, HR Tech, and sometimes SaaS. Holger provides strategy and counsel to key clients, including Chief Information Officers, Chief Technology Officers, Chief Product Officers, Chief HR Officers, investment analysts, venture capitalists, sell-side firms, and technology buyers.  Coverage Areas: Future of Work Tech Optimization & Innovation  Background: Before joining Constellation Research, Mueller was VP of Products for NorthgateArinso, a KKR company. There, he led the transformation of products to the cloud and laid the foundation for new Business Process as a…...

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This morning, new broke, originally over the Wall Street Journal, that Kronos and Ultimate Software are merging. Long rumored, asked for and denied, this merger is now happening. Time for a merged Market Move and News Analyis blog post.

So let's dissect the press release in our customary style, it can be found here:

Creating Company Valued at $22 Billion
Merger brings together world-renowned best places to work, with plans to add 3,000 employees over three years
LOWELL, Mass. and WESTON, Fla. , Feb 20, 2020
Kronos Incorporated and Ultimate Software today announced that they have entered into a definitive merger agreement to form one of the world's largest cloud companies. By bringing together two industry leaders, the transaction will create the world's most innovative human capital management (HCM) and workforce management company to help organizations across all industries manage their people more effectively with an unparalleled combination of cloud solutions. The combined company will have enhanced scale and an even stronger position in the fast-growing HCM marketplace.

MyPOV – Good headlines on what is happening and nice work to get in the hiring ambition, right away deflating the fire that a merger between two PE firm owned entities is all about cost cutting. 

News Facts
Kronos and Ultimate each have a proven track record of delivering the industry's most innovative solutions to help organizations around the world drive better business outcomes, achieve a competitive advantage and create engaged workforces. The new company will bring together the best of each company's award-winning solutions – Ultimate's UltiPro HCM and Employee Experience products with Workforce Dimensions from Kronos, Kronos Workforce Ready, and other solutions from Kronos – with an unwavering commitment to delighting customers and exceeding their expectations.

MyPOV – Good to bring in the products- that's what it's all about.

Combining two exceptional, highly compatible cultures will create a company that is People Inspired. Kronos and Ultimate have been consistently recognized around the world as great places to work – including both being multi-year winners of the prestigious Glassdoor Employees' Choice Best Places to Work and Fortune 100 Best Companies to Work For® honors. This reflects both companies' belief that people are at the core of an organization's success, and that prioritizing the employee experience is the most effective way to help customers succeed.

MyPOV – Culture merger will be hard – even though both vendors agree on people centricity. Ain and team will have to get this tricky one right to keep key talent. Good news for the competition – one spot less that is given out in the coveted workplace rewards game… 

Upon closing, the combined company will have revenues of approximately $3 billion, more than 12,000 employees worldwide, and an enterprise value of $22 billion, with further plans for growth including the addition of 3,000 employees over the next three years.

MyPOV – That may make Kronos / Ultimate one of the top 3 – if not the largest HCM player (LinkedIn is #1 in my guestimates). Amazingly there is very little overlap in the customer base, the CMOs expressed their disbelief when the number was first shared (still NDA at the moment). 

Aron Ain, longtime Kronos chief executive officer, will be the chief executive officer and Chairman of the combined company – guiding an experienced executive team comprised of leaders from both Ultimate and Kronos.

MyPOV – Congrats to Aron Ain, one of the longest serving and most accessible HCM CEOs out there. Most of all he tells things how they are and is honest. He now has the challenge of his management career ahead. Solve the integration and merger issues, keep the teams motivated, make a difference for customers and shape the HCM industry. The combined entity is tangling product revenue wise close to Oracle, SAP (both don't disclose HCM revenue) and Workday. 

The new company will be jointly headquartered in Lowell, Mass. and Weston, Fla., with dozens of offices around the world.

MyPOV – Wise choice for continuity and culture. Merger watcher will count days spend by Ain where… Weston is a weather draw over Boston…  but then dual HQ structures usually don't last. And we don't know which Ultimate executives are reporting to Ain. 

Hellman & Friedman LLC (H&F), the controlling shareholder of both Kronos and Ultimate, will be the controlling shareholder of the newly formed company. Following H&F, private equity funds managed by Blackstone will be the largest minority investor, followed by GIC, Canada Pension Plan Investment Board (CPP Investments), and JMI Equity. 

MyPOV – H&F in the lead, but a good selection of PE owners who will want to see value in 3-4 years. The question is if this reset the 'fabled' clock for Kronos / Ultimate – or not. 

Supporting Quotes
Aron Ain, chief executive officer, Kronos
"I have never been more excited in my 40 years at Kronos! Combining our passionate and extremely talented Kronos and Ultimate teams will create a company that is truly People Inspired. Together, we will expand the value we deliver to customers and create the industry's most comprehensive human capital management and workforce management solution for organizations around the world. With a combined 70 years in business, we are poised for tremendous success. For our employees, customers, and partners there is an even better future ahead. Our top priority as we complete this merger is to ensure a smooth transition for our people and continue to exceed our customers' expectations."

MyPOV – Good quote by Ain. Ultimate has what Kronos for the long time did not search – very good HR Core and Payroll offerings. That only changed recently. And the maturity of the Ultimate product is a key asset for the combined entity. 

Adam Rogers, chief executive officer, Ultimate
"The combination of Ultimate and Kronos paves the way to deliver the next generation of employee-facing solutions that will set the standard for the workforce of the future. This merger will enable our more than 12,000 inspired people around the world to deliver innovation in human capital management faster than ever before. Both companies remain fully committed to their core strengths as well as to the combined benefits that the new company will bring to employees and customers."

MyPOV – Good quote by Rogers, looking at the future… but he has decided to leave the company.

David Tunnell, partner, Hellman & Friedman, lead director, Kronos, and chairman, Ultimate
"The merger of Kronos and Ultimate brings together two exceptional, industry-leading companies that are dedicated to delivering great technology services and – just as importantly – creating outstanding employee cultures of their own. After many years of a growth-oriented partnership with Kronos, and a more recent, successful relationship with Ultimate, we have strong conviction in the deep compatibility of these two companies and the unlimited growth potential of this sector. We know that by creating an inspiring place to work and putting people first, this combined company will thrive for years to come."

MyPOV – It's the H&F serenade of love to the HCM investments. Payroll continuity and workforce management stickiness make HCM vendors steady and predictable investments. 

Martin Brand, senior managing director, Blackstone
"We believe the combination of Kronos and Ultimate will create a cloud industry leader in human capital management and workforce management software, and one of the best companies to work for in technology globally."

MyPOV – Short and sweet – and the mission as well. 

1 Slide Summary

As usual for key events - here is the 1 Slide summary:
 

Implications, Implications…

Implications for Kronos customer

Nothing changes in the short term here. As usual, customers should seek reassurance on roadmap commitments critical to them. Expect a new roadmap at KronosWorks in fall. If you get a new executive contact or sales rep, build the relationship asap. Relationships matter.
Implications for Ultimate customers
Nothing changes short term as well. Secure the executive relationship with Kronos. If your Ultimate executive sponsor is no longer there, see replacement immediately. Reach out to them today. If you have more than 5k employees, reach out to Ain. Relationships always matter…. But even more in mergers. If implementing and depending on Infor's Workbrain product then actively look for implementing / using Kronos Dimensions – which will be the long-term solution. Proactively plan the switch, it will be painful but worth it.

Implications for partners

While it may look like less vendors to partner, in the short run this is a massive opportunity. Migrations all over the place in the future. There will be a new product. There is the immediate need for putting in Kronos Dimensions in Ultimate customers using Infor Workbrain. If you are an Ultimate partner with no Kronos skills, time to get them and become a partner – or you will wither down in the combined ecosystems. 

Implications for competitors

One less competitor… yes – but in the longer run a combination that will be stronger than Kronos and Ultimate could have been standalone in North America. At the moment a combined product strategy will be announced (earliest KronosWorks 2020), Ceridian will feel validated with its single suite. Practically, Ceridian has where Kronos and Ultimate combined want to be – one single architecture based HCM suite that spans from Benefits to Payroll. It will also give more space to the SMB ambitions of Oracle, SAP and Workday – and also will get ADP more often to the table, by sheer elimination of one slot. Enterprises shortlist 2-3 vendors and even though executives of Kronos and Ultimate maintain they did compete much…  they will and would have more and more.

MyPOV

The writing was on the wall… Someone at H&F calculated growth vs R&D and other costs and reached the conclusion that the combined entity will be more successful. Size matters in enterprise software and Kronos / Ultimate have it now – effectively we estimate they are a top 3 vendor. A lot of work ahead for Ain and his team, clearing product direction is very high. So far, a good job on that and Ultimate Connections is coming up in … 10 days. The joint CMOs on today's call were quick to point out that execs from both vendors will be there. This will help also the internationalization ambitions of both vendors, who individually have moves relatively slowly, with a preference of English-speaking countries… the PeopleDoc being the notable exception. One sales office and one sales team are more efficient, and I expect Kronos / Ultimate to speed up its internationalization efforts. 
On the concern side, even though both vendor are very people focused, there is a culture merger to be solved. Ultimate had stellar benefits (100% employer paid) and who would not like that at Kronos. just to start the challenges. A roadmap must be there soon, though I would not exclude a secrecy project on products as Kronos pulled with Falcon aka Dimensions. Both vendor have no experience in high talent / low cost locations and need that to be long term competitive. And Kronos / Ultimate will have to convince customers to move from a very mature UltiPro product to a nascent Kronos / Ultimate (likely Dimensions based) HR core suite. For the payroll fans – Ultimate's payroll with its atomic collection of payments / services that made it the market leader in pro sport franchises – will be a cliff for any new payroll. But maybe its time to build a new payroll for the combined entity?

But overall congrats and exciting times ahead – the HCM market is getting more competitive. Players become more viable. All good news for enterprises who in the era of enterprise acceleration need to move faster than ever before and need better people software than what they have today. 

HOSPITAL SECURITY: When People are the Greatest Risk

David Chou

CIO
Harris Health Systems

Title: About David Chou David Chou is vice president and principal analyst at Constellation Research, covering the intersection of the healthcare systems’ stringent processes and regulations and the transformational power of technology. With nearly 20 years of experience as a senior IT executive across various health systems, David brings a CIO’s practicality to his advisory practice on emerging technologies and disruptive innovation. He offers guidance to healthcare institutions and practitioners navigating digital mega trends and how to strategically apply them to hospital operations to maximize their technology investments. David’s expertise is helping a health system transition toward becoming a digital enterprise in the healthcare setting. He has worked on building a digital…...

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Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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Security is top of mind for the CIO. But security involves the entire organization and demands that everyone takes security seriously… hand washing as a priority and second nature seriously. Often, we find that hospital system CIO and CISOs have been more focused on budget battles with the board as security and core infrastructure has historically been under-funded. Changing behavior and influencing a healthy security mindset as core to hospital operations and corporate culture has not been a top priority.

Frankly, organizations should be placing security above all else. Security is not just about avoiding data breaches. It is not just about changing passwords or updating patches. Security is not just about technology. This is likely the steepest education curve organizations must overcome…understanding that security is about patient safety and social responsibility. Yes, the financial ramifications of a data breach are high, but when you factor in the loss of personal health information and having a community lose faith in the organization, the costs are exponentially higher.

At Constellation we come at this from two distinct vantage points: From that of an experienced CIO in the Healthcare industry and that of a consumer (who moonlights as a marketing and brand security analyst.) Let’s start with an example…one that potentially put patient privacy at risk and highlights how easy it can be too loose both security posture and brand trust in an instant.

A patient visited a new health network. In providing the network with her email, something went wrong. Maybe the patient provided the wrong information…or the intake administrator accidentally mistyped one letter…either way, the wrong email was attached to the patient’s record. This was 100-percent human error. Upon receiving email reminders for upcoming visits, recaps of past visits, recommendations for lifestyle modification and notifications for pharmacy pickups, the email’s actual owner looked for a way to notify the health network that emails were being sent in error.

After multiple digital communication attempts, the email owner picked up the phone to speak with someone at the hospital. After bouncing around from member services to finance to customer support, an agent informs the email owner that there is nothing that can be done...the team can only help with web site usability problems and can’t address contact details. The agent explains that while he isn’t allowed to make changes to patient data, but since there isn’t a registered account, maybe the email owner should go ahead and register for an account and then change contact permissions…”Maybe that way you can stop the emails all together?”

For the record, Liz Miller (co-author of this post) was the email’s owner…and she did NOT follow this suggestion. But the service agent did little to resolve the issue and showed little regard for the greater security issue at hand. As of today, emails from doctors, secure messages from the pharmacy and follow-up care details for three procedures, including information about a post-op stay and well wishes from the nursing team are still being sent. Links to opt-out of communications have proven no match for the system’s insistence on delivering patient communications to a total stranger.

Had security been instilled as a mindset and part of the culture across every touchpoint with the patient, this suggestion…that a total stranger attempt to create an account and potentially access a trove of even more personal information and detail…would never have happened. In fact, the reaction would likely be what we had expected: shock, horror and an immediate suspension of emails to a stranger. It is abundantly clear that not only is security not part of the culture, it is also not part of training or education.

Security risk exposure is at an all-time high. A single person’s personal health information is worth at least 25x more than a credit card’s information on the black market, turning healthcare organizations into a prime target for attack. Hospitals are often considered to be a ripe target for hacks as they are often seen as large, bloated systems, open 24/7 and teaming with sensitive data, especially financial data. Headline grabbing horror stories about medical device vulnerabilities and “what-if” scenarios of hacked heart valves to MRI machines have put security on the radar of every CEO and Board. Yet discussions around simple human error inviting bad actors and attacks typically does not make the agenda when discussing what must be done to secure patients and personnel.

While everything must be done to boost and augment the technology in place to proactively protect and effectively maintain a robust security posture, comprehensive education and security training must also take place for every team member…from doctors to the front desk. Everyone should know what part they play in protecting the patient and the brand reputation of the hospital itself.

Security won’t be resolved by technology alone. It will take partnerships across the C-Suite and participation from every member of the team. It will take a very low-tech path of education, cooperation and a foundational belief that a patient’s health and well-being extend to their data.

Zoho Analyst Summit 2020: What the Full Tech Stack Really Means for Customer Relationships

It was another thought-provoking and insightful analyst summit with the Zoho team outside Austin last week. No, they haven’t got every feature and function perfectly formed, yes there are plenty of spots in the portfolio that still need work. Even so, as I’ve said elsewhere, Zoho’s leadership has the audacity to dream big, the skills to focus that vision, and the tenacity to see it realized.

That combination of ambition, strategy, and ability to execute came through particularly clearly in Raju Vegesna’s overview of Zoho’s product strategy. In order for Zoho to be “the operating system for business,” the company must, he explained, own the full technology stack, from data center and networks through data, platform, and applications. In Zoho’s view, only by owning and managing the full tech stack can the company deliver a seamless, superior customer experience.

Source: Zoho Analyst Day, 2020

Note that in this context, “customer experience” refers to Zoho’s customers. In effect, this is really the Zoho “user experience”—and for the sake of clarity, that’s how I’ll refer to it from here on out. Because there’s an important connection between how Zoho is building a superior experience for its customers (UX) and how that enables those customers to do the same for their customers (CX).

This is Raju’s point: Purpose-built systems are always more efficient and effective. No matter how “cheap” and accessible things like generic compute capacity and storage have become, they will never beat the performance of systems designed for a particular use. That’s equally true for data center and network design, hardware and software interfaces, even software platforms, applications, and (my addition) business processes. For Zoho to realize the objective of being the operating system for business, all of these layers must be considered and designed together as part of a holistic system. Importantly, this includes things like a unified data model, databases, microservices, and a development platform.

Here is mine: If you want to grow a business through durable customer relationships built on great customer experiences, purpose-built systems are essential. In order to operate an entire business that is centered around customers, your applications and systems must be designed specifically to support a shared, consistent understanding of customers. Every employee in the organization can make the best decisions and take the right action to support customers when they have the information and insights they need. Where applications are easy and intuitive to use (UX), adoption isn’t an issue. Individual employees benefit directly from using these applications because they help them do their jobs better (CX). Merely using such tools validates and updates the data they contain. This is how systems become self-reinforcing and self-sustaining—essential to delivering consistently great customer experiences over time.

What’s so compelling about Zoho’s “full stack” approach to building business applications is that for customers (users), it just works. Zoho has tackled the challenge of creating a unified data model, along with a custom database, that feeds all of its applications. This solves the biggest problems that most companies face when either creating a unified view of their customers or integrating additional applications. Crack this nut and everything else becomes relatively easy.

Source: Zoho Analyst Summit, 2020

The common data model issue alone makes Zoho a strong contender for any company that wants to change the way it operates in order to be truly customer centric. The range and depth of Zoho’s application portfolio, as well as the ease of integration with other applications outside of Zoho, increases the value considerably. Catalyst, Zoho’s recently announced serverless development environment, should add another multiple as well. Both independent developers and Zoho customers now have the means to develop their own microservices and apps, for themselves and for the wider community of Zoho users.

There are some drawbacks of course. Zoho’s comfort zone is still small and medium-size businesses. The company has the scale to support larger companies, but it is in the early days of developing the support infrastructure for these customers. The challenges here are less about the technology implementation and much more about issues of internal coordination, managing politics, and change management—on a much larger scale.

Creating a whole technology stack also limits some of the benefits of broader development communities as well. There will undoubtedly be developers attracted to the opportunities within the Zoho customer base, but those opportunities today are nowhere near the size and scale of other ecosystems.

Here’s the bottom line: Zoho’s leaders understand what’s required to operate a business in the experience economy and they design their offerings to deliver it. It won’t be the right fit for every business, but for those it does, Zoho offers the potential to redefine best practices in business operations—and what it means to be customer-centric—well into the future. The direction Zoho’s taking will undoubtedly influence many others in the enterprise application market as well. I’d say that’s a pretty compelling proposition.

Criteo Analyst Day: Notes from Inside the Box

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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For most executives looking at digital advertising optimization, personalization, retargeting or programmatic buying, Criteo is likely on the consideration list. A Wall Street darling in the heady days of rapid ad tech investment, it would be easy to assume that Criteo had fallen into the disruptor-now-the-disrupted category.

Admittedly, Criteo has been on a bit of a roller coaster ride. Amazing capacity for retargeting and programmatic. Rough headlines over the past five years have rocked the brand from allegations around ad fraud to hits on stock price. Now, the cookie could be Criteo’s biggest blow in the wake of Google’s public pondering of a ban of 3rd party cookies a couple years down the road.

But the big black advertising box showed signs of embracing the needs of today’s marketing leader, showcasing innovation outside of its traditional advertising lane and into the cluttered realm of buyer/shopper intelligence. There is a delicate balance that needs to be struck in understanding the needs of the brand-building, precision marketer and the privacy-aware value-driven consumer. The question will become if Criteo can understand both of those needs.

Top thoughts from my time with the team in Boston:

• Bringing on a strong CEO with serious street cred in marketing, media, operations and security isn’t an accident. Megan Clarken, a seasoned veteran of Nielsen, News Corp and Akamai, is credited as an operational leader with successes in massive transformation including the Total Audience Measurement strategy shift at Nielsen. But it isn’t just her impressive background that got me leaning in—it was her refreshing honesty about where Criteo is today and the new attitude Criteo will need to be a bigger player in the marketing technology game. Don’t discount her insights into video measurement and her savvy with mobile…or the fact she is a battle-tested partnership builder. If you can change measurement at Nielsen, I’m pretty sure you can sell ice to an Eskimo.
• Criteo is talking—a LOT—about its plans to enable brands to engage with consumers in the “upper funnel”. To be frank, I am not sure this is Criteo being ironic or Criteo not seeing its own potential to help marketers looking to move beyond the archaic vision of a linear funnel that neatly organizes customers into buckets that predictably exit a highway in a uniform, orderly, standardized model. Criteo’s legacy in understanding behaviors, intent and motivation triggers and signals is powerful, regardless of where in the “funnel” a customer sits. It will be interesting to see just how the solution comes together and how much value it brings to the CMO looking to better orchestrate the chaos of a profitable journey instead of trying to classify customer buying stages in a straight line.
• As a public company, Criteo is exceptionally susceptible to big hits when big alphabets make even bigger announcements. The reality is that nobody in the industry ever thought the cookie would ever crumble. In the same way the single point of attribution has given way to something more powerful, elegant and meaningful to the business, so too will go retargeting, and dare I say, personalization in advertising. I wouldn’t count Criteo out just because of a 3rd party cookie. I was especially interested in the capacity to tap into 1st party data, including the import of CRM data and enterprise customer listening intelligence, as brands seek to refine the relationship and not bombard a target.
• Criteo will need to get transparent and plant a stake in the ground about ethics in their machine learning if they are going to be truly trusted. Criteo is pushing their Shopper Graph along with their ability to apply machine learning and deep learning to data to best understand and act. In today’s conversation of Ethics in AI and the inherent trust in transparency, Criteo will have to take a stand. This could be an uphill perception climb with old rumors of alleged ad fraud continue to populate news feeds, despite Criteo taking steps to deliver trusted traffic. But trust in traffic and metrics is vastly different than ethics and trust in AI and ML based intelligence. Transparency in HOW decisions and calculations are made could go a long way, especially as the world (read: legislative bodies) continues to regulate AI and data on the fly. It just won't be enough to be certified for ad metrics...marketers will want to understand how intelligence is being compiled and calculated.

I’m certainly not ready to make a definitive ruling about Criteo—will it sink or will it soar—not entirely sure. There is an awful lot on the roadmap that was confidential and, ergo, the burning part of what this marketing gossip wants to share. But, in the end, after a day in Boston, I fully understood that the Criteo of old won’t be the Criteo of tomorrow. And THAT, ladies and gents, could be one heck of a story to track.

RPA Evolves into End-to-End Intelligent Automation: A Closer Look at AntWorks

Dion Hinchcliffe

Vice President and Principal Analyst
Constellation Research

Title: About Dion Hinchcliffe Dion Hinchcliffe is an internationally recognized business strategist, bestselling author, enterprise architect, industry analyst, and noted keynote speaker. He is widely regarded as one of the most influential figures in digital strategy, the future of work, and enterprise IT. He works with the leadership teams of large enterprises as well as software vendors to raise the bar for the art-of-the-possible in their digital capabilities. He is currently Vice President and Principal Analyst at Constellation Research. Dion is also currently an executive fellow at the Tuck School of Business Center for Digital Strategies. He is a globally recognized industry expert on the topics of digital transformation, digital workplace, enterprise collaboration, API…...

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One of the more interesting and vibrant new spaces in enterprise software in the last few years has been the category of Robotic Process Automation or RPA. The premise is simple and compelling: Show a software robot how a repetitive work task is done, and it will literally learn how to do it by watching the employee carry it out manually. The result is a rules-based algorithm that can then be adjusted, configured, optimized, and deployed quickly in the field to have that task carried out by the software robot going forward.

RPA can handle a wide variety of business use cases, from invoice matching to mortgage processing that previously required humans to do most of the work (though they still have to help with edge cases, but usually with greatly reduced workloads.) What's been interesting is that because RPA goes so deeply into exactly what a business does on the ground, inside its processes, RPA is often viewed more as a business tool than an IT tool. Thus IT has been surprisingly slow at times in introducing it to the business side, and businesses, not being in the IT field, are often unaware of the potent capabilities of this generation of much smarter process automation tools.

This state of affairs -- unclear ownership and tech unfamiliarity -- has led the RPA industry to flourish a bit less than it might otherwise have, yet still capture some of the most impressive growth stats in the enterprise IT industry

RPA also shows some of the best ROI of any new category of business apps. As the industry has matured and evolved, RPA has succeeded in having considerable real-world impact in the enterprise, with a growing wealth of case studies. While there are also some potentially concerning outcomes of adopting RPA, such as displacing workers at scale or the use of the technology by bad actors to engage in unwanted activities, so far negative outcomes appear rather limited.

The result is that RPA is one of the most practical and impactful applications of artificial intelligence (AI) so far. Yet the realities of making RPA operational quickly became apparent in the initial years, overcoming the overly-simplistic expectations of quick watch-run-deploy-optimize cycles.

End-to-End Intelligent Automation As a Platform

For RPA to sustain and adapt within a business it needs proper support. In other words, adequate design, planning and governance of an overall automation approach, while staying agile enough to quickly change with the business. So too is having a well-defined end-to-end technology framework to automate new processes. This includes integrating a host of related capabilities in an outcome-based sequence: Data capture, ingestion, and cleaning, data enrichment, automation output, quality control, downstream analytics, and exception handling, not to mention back-end features like system integration, autoscaling, capacity management, security, and compliance. 

In fact, wouldn't it be nice if most of this was already assembled as a ready-to-go solution around a capable RPA engine so it could be quickly applied to the business? This is, in fact, where a good part of the RPA industry is currently headed, so that businesses don't have to bolt-on the inputs and the outputs to an RPA tool, and then layer on the necessary analytics, operations, management, and governance capabilities.

The AntWorks Platform: Beyond RPA

The above was the background to an recent trip to ANTENNA 2020, the yearly industry analyst confab organized by leading RPA vendor AntWorks, which is currently on my RPA ShortList of solutions in the space to watch. Taking place in mid-January, 2020 in Turks and Caicos, our hosts were the co-founders themselves, Asheesh Mehra, currently the Group CEO, and Govind Sandhu, who is the COO.

AntWorks as a company is an interesting story, and is on quite a respectable growth trajectory, with about 600 employees today, despite being founded in just 2015 in Singapore, where they remain headquartered. AntWorks is still regarded as the new kid on the block in RPA, however, even though their offerings consist of a more complete and encompassing platform than just that capability. Asheesh notes that this helps them win deals, because they're ready to go out of the box, with less system integration and cobbling together of different pieces to arrive at a solution. While you can use pieces of AntWorks if you already have other upstream or downstream components, it's the entire solution that works together where they shine, something I confirmed by talking with some of their customers at the event.

Asheesh and Govind did much of the presenting in the morning, and were good advocates for the company, laying out the key principles that AntWorks is driven by. One aspect clearly stood out during their presentations: Both founders are grounded in what they want to accomplish, have a crisp vision, and are very careful that fast growth doesn't derail where they are going. They are committed to this to the point that they told us that they still interview every hire they make for cultural fit, something that by now must be quite a burden. However, it will likely pay sustained dividends by laying a strong people foundation in what is -- like most mid-sized enterprise startups these days -- a far flung organization with many small, separate offices that make it hard to build a common identity.

The core AntWorks product offerings as of early 2020

The AntWorks offering itself is based on the principle of 'Integrated Automation' because the company believes that process automation takes a good bit more than just an RPA offering. They divide their solution into four product segments, broken down into Intelligent Automation, Intelligent Document Processing (IDP), Fractal Science-based Artificial Intelligence/ Machine Learning (AI/ ML) that includes handwriting, RPA itself, and process discovery, along with other associated solutions (see product view above.) These are all wrapped together into a seamless solution for those that want to to identify the processes with highest automation propensity, pull data out of forms, images, or really, anything, and then automate the business processes that use that data.

The Six AntWorks Differentiators

Overall, there are six key takeaways from the various presentations of our day at ANTENNA 2020. Given the relatively newness of AntWorks to the industry, I will couch them as key differentiators, because that's what they are:

• Fractal science for more robust and effective machine learning. A key part of the company's special sauce is caught up in a form of fractal science, the kind that many of us learned about in high school, but that here gives them an edge in image recognition and processing, including intelligent document processing of structured, unstructured, image and inferred data as well as handwriting recognition. Their machine learning engine, known as Fractal ML, does this by establishing a more advanced and model-based, pattern recognition understanding of objects. Govind has a detailed YouTube presentation on why they believe Fractal Networks is a more modern approach to machine learning.
• Long-term investors that allow the best product to emerge. SBI Holdings is a key investor in AntWorks and takes a long-term and relatively low touch stance with the company, allowing it to make significantly stronger but perhaps slower burn product decisions that other organizations would have a harder time adopting (see: Ethical AI below.)
• A principled stance towards Ethical AI. This is a deeply held belief by the Asheesh, as well as the company broadly, that AI is a superpower that must only be used for good. They believe that to achieve this requires widespread realization and participation from businesses and governments to address, so that they ensure that use of AI is conducted accountably and responsibly. First, in a do-no-harm position, they call for AI providers to limit the carbon footprints of their solutions. Second, they call for the pervasive enablement of broad auditability and traceability of every AI decision. Finally, providers must not let their AI technology be used for criminal or fraudulent pursuits. Over lunch at the event, Asheesh told me they rigorously examine each deal to ensure their technology will be used properly within these constraints. It slows down sales a bit he said, so I asked him if his investors supported this approach. He indicated they are fully behind the AntWorks Ethical AI approach. Personally and professionally, I applaud their position, especially as the technology within AntWorks has real and immense power to automate human activity, for good or otherwise.
• An end-to-end solution for intelligent automation that goes beyond simple RPA. As cited above, AntWorks has both the vision and capabilities not just for RPA, but for solutions that span virtually the entire process automation value chain, from data capture and ingestion, finding processes, rule processing, workflow, connecting to outcomes, managing galaxies of bots doing this at scale, and providing both operational and strategic insights via analytics. It's a full stack RPA in other words. Also, because it's an integrated solution, AntWorks provides a Hybrid Processing functionality which allows very different data formats (data fields, check boxes, signatures, etc.)  to be interpreted all at the same time, speeding up the process and improving contextual quality. Here's a view of ANTstein SQUARE, showing the complete AntWorks stack:
  
• A purposefully built and maintained corporate culture that puts customers first, even in the face of high growth. A company of this size has already passed several key growth milestones that sometimes undoes smaller, high growth companies. I attribute this to the strong, positive, helpful culture that emphasizes helping the customer that the co-founders have clearly put great effort and expense into developing. I expect that while this must be a rather significant time drain, that they will be able to stay cohesive even as the company grows beyond any possibility of the hands-on approach the co-founders still maintain for hiring and shaping the global staff of the company, as they rapidly open offices around the world.
• High security and robust information safety protections. RPA systems often handle a company's most sensitive data, including financial and customer information. AntWorks emphasized the extensive effort they put into complying with and passing the security reviews of even largest regulated organizations. I did however press on them if they were truly security-first, and based on the answers, they are not quite 100% there yet, but it's clearly an objective of theirs. Bottom line: I rate them as about as high in security as the RPA industry gets based on my conversations with their architects.

AntWorks: A Fully Contemporary Automation Solution

That said, I do have a few minor concerns with a couple of key aspects of the strategy of the company. While they are very careful to build deep partnership with implementation firms and professional services companies that should drive delivery, growth, and net new logos, I believe they are still underpartnered for global growth. In fact, many geographic regions and industries will likely struggle to obtain local AntWorks implementation teams quickly enough, at least for a while. But I suspect they will solve this issue relatively short-to-medium term. Second, they don't have a clearly articulated future roadmap (or are at least not willing to share one yet, considering market competitiveness). While many tech vendors don't have this either, I find it's one of the most sought after pieces of information that buyers want. They want to understand where they are going to be taken. It will be helpful to see at least a high level product roadmap provided by AntWorks in the future.

Finally, there is probably one more key differentiator of the AntWorks platform, and that is a higher than average degree of usabilty. But I have not been able to personally verify that's the case yet, but I'll provide an update when I do.

In the end, it's clear that AntWorks knows what it's about and where it's going. The company has a very well-defined identity and industry objective, which is to bring end-to-end intelligent automation to a truly global market while upholding the highest industry standards of Ethical AI and customer security/safety, with RPA at the core. Their customer case studies were impressive as well, and were among some of the better ones I've seen. Thus, I came away from ANTENNA 2020 with newfound respect for the company, its aims, and its products. It also reaffirmed for me their place on our RPA ShortList as a prime automation platform for digital transformation in the enterprise.

Additional Reading

My live tweet stream with real-time analysis at #ANTENNA2020

2020 Predictions for the Future of Work and Automation

The Digital Transformation of Back-End Customer Experience with AI

Marketing Didn’t Get to Authentic by Accident

Liz Miller

Vice President & Principal Analyst
Constellation Research

About Liz Miller: Liz Miller is Vice President and Principal Analyst at Constellation, focused on the org-wide team sport known as customer experience. While covering CX as an enterprise strategy, Miller spends time zeroing in on the functional demands of Marketing and Service and the evolving role of the Chief Marketing Officer, the rise of the Chief Experience Officer, the evolution of customer engagement, and the rising requirement for a new security posture that accounts for the threat to brand trust in this age of AI. With over 30 years of marketing experience, Miller offers strategic guidance on the leadership, business transformation, and technology requirements to deliver on today’s CX strategies. She has worked with global marketing organizations to transform everything from…...

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As we enter the age of Authentic Marketing, Chief Marketing Officers and the teams they lead will be asked to justify authenticity itself…to explain why today is the day to engage with the customer on the customer’s terms and in their language…why now is the time to deliver on the centuries old promise of customer centricity. But, as the incomparable poet Maya Angelou said, you can’t really know where you are going until you know where you have been.

For Marketers this means looking into our sometimes-misguided past. Stay with me now…I promise…it isn’t all terrible. But we owe it to ourselves to understand what got us here.

Commoditization Is Killing Marketing

In the pre-digital engagement age, when collateral, paper and physical trappings of marketing flooded the supply chain, marketers engaged in negotiations by way of commoditization. Today, this same negotiation permeates across everything from lead acquisition to advertising and audience engagement. If 10,000 leads cost $50 per HQL, can we drive that down to $40 if we contract for 15,000? At some point in acronym bingo, we lost sight of the fact that the Q stands for quality, not quantity.

The commoditization of marketing drives the actions of marketing downward, diminishing marketing into a functional cost where procurement is the focus and the craft of customer engagement comes second. Engagement is not a commodity. Customers are not a commodity. When did we lose sight of those two truths?

The CMO Role Is (Understandably) Under Attack

Everyone wants to be a CMO. Everyone thinks they can be a CMO. Very few outside of actual CMOs know what a CMO does. Today’s CMOs are expected to drive growth across the entire organization, developing the strategy and the vision to turn overarching goals into bottom- and top-line realities. Yet new titles emerge daily, some warranted to describe expanded or focused remit. Others are just rebranding.

Time to settle the debate: CMOs drive, orchestrate and accelerate growth by aligning resources (and intelligence) to optimize engagement and establish the brand that underpins the far more broad and enterprise-wide customer experience strategy. Instead of fretting over the loss of the 4 P’s, today’s modern CMO is laser focused on the 3 R’s: revenue, relationship and reputation. So, if it quacks like that duck, it is a CMO.

The “Frankenstack” Will Be the Death of Us

Marketing organizations, let alone the CMO, do not have an accurate accounting of all the solutions the entire organization already has implemented to manage the customer relationship across brand experiences and customer engagements. Unlike the gentle creature Mary Shelley created, marketers have built a beast, co-located across a patchwork of software as a service, cloud and on-premises solutions. Too bad the monster is failing us…and all the other teams building their own creatures.

A recent Deloitte study shared that of the US$20 billion that human resources executives invested into technology in the last five years, 65% felt their HR stack is still inadequate or only doing a fair job achieving people goals. According to the Association of International Certified Professional Accountants, while 89% of their finance leaders say they are advancing technologies like AI, only 10% believe their finance teams can support their organization’s digital dreams.

Bottom line: We all brought parts to build the monster. Now, we must tame it.

Magpie-Marketers Can’t Resist Shiny Strategy Buzzwords

A magpie is a brightly colored, attention-grabbing bird, a symbol of good fortune, chatters constantly and collects indiscriminately. Hits close to home, doesn’t it? Instead of collecting trinkets, promises are the CMOs collection of choice. This promise-hoarding is a vicious cycle: buy into the dream, rip and replace solutions that don’t meet the lofty promise, continue to collect promises just in case one of them is real. The allure is real...so is the struggle.

The new decade is already promising an epic round of buzzword bingo, ripe with lofty promises that might be too intoxicating to look away from. Marketers will have to adopt a new posture of B.S.-busting for any hope of survival. For those colleagues who felt that “optimization of customer engagement through big data segmentation” was the epitome of buzz, just wait until artificial intelligence (AI), blockchain and quantum computing get into the mix. In fact, this promise was recently sent via email: “future-proofed for the quantum-ready blockchain data lake.” Bingo!

Marketing Metrics Lost Their Meaning

We set definitions to measure and quantify engagement, then trained the C-suite to expect as measurement. We made up measures to justify new channels where value was being lost in translation. What was a like? Why invest in a Twitter campaign? Why should we keep sending emails? We had to answer real questions with simple answers that negated the complexity of the relationships and journeys we were architecting.

The vanity metrics served a purpose as we needed to bridge an understanding gap between the pre-data and post-digital eras. For non-marketers, the presentations focused on likes, clicks and views as a validator of spend sounded like nonsense, but it was better than the alternative of no reporting at all. Vanity metrics (or the memory of them) make it impossible for some to fully accept and embrace marketing’s new growth mandate. For CMOs to truly take control of the growth agenda and rise to the opportunity, metrics can’t be for metrics’ sake and hold as little meaning as a “like” or an “open” measured in a vacuum.

So here we are…

Our customers expect relationships to be more like the “good-old days”...personal, bi-directional and valuable...and our organizations expect us to be precision performance growth engines but with flair. This is the core of authentic marketing.

Authentic marketing is best described as a strategy defined by engagements that are based in fact while remaining true to the personality, spirit and character of the brand. It expects marketers to develop deep relationships with the market, with customers and with the industry writ large. It is bidirectional in nature and devoid of imitation or false promise. It embracese data without being paralyzed by it, using all the colors in the box while leveraging data to keep that creativity focused, contextual and relevant to an audience of one. 

The connected customer craves this deeper connection, just not at the cost of truth, trust and authenticity in purpose, action and reaction. The age of authentic marketing demands that CMOs reclaim the creativity and storytelling that marketing has always advanced while firming establishing the role as owner of the 3 R’s—revenue, relationship and reputation. It doesn’t ask which lobe of the brain is dominant: it expects that both the analytical and the artistic can work in perfect harmony and without apology or regret.