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8. August 2019 14:36

What is Experience Management? Ideas for Practical Realization of XM

By Michael Reiserer
  • From the product to the experience: Companies that rely on Experience Management are more successful over the long term.
  • What do I ask in which context? The Multi Experience Platform ApiOmat makes the intelligent combination of X and O-Data possible.
  • Experience Management is an enabler for innovative business models that focus on the benefits.

In his article “The future of digitization lies in Experience Management“, Dieter Weißhaar, CEO of EASY SOFTWARE AG, makes it clear that we now live in an “Experience Economy”, because today, as customers, we no longer buy products, but experiences. Tools for market research, such as those from the SAP subsidiary Qualtrics, extend Experience Management from the customer experience to the whole of the supply chain and human resources. In this article, you will learn how to contextualize the combination of experience (X-Data) and inventory data (O-Data), and therefore generate real and measurable added value for the intelligent company.

The evolution of value creation: From the raw material to Experience Management

How was your most recent stay at our hotel? Would you recommend us to others? As customers, we are now used to hearing such questions; all service providers want to know how we experience their services or products so that they can adapt their offerings accordingly. According to a survey by SAP, 80 percent of customers would change a brand or service provider due to a poor customer experience. A positive customer experience is therefore hugely important in order to acquire and retain customers. That means: If products or services can no longer be distinguished from each other in terms of their quality and functions, further added value must be available in order to inspire customers. It’s all about building a relationship on an emotional level. A perfect example of this is the Apple brand, which, on the basis of a consistent brand strategy, has managed to tell a story and create an emotional sense of belonging to a group.

The way in which a product, brand or service is experienced is determined by many factors: Is the procurement process uncomplicated? Are the personal contacts friendly and courteous? Is the customer service department easy to access, etc.? Many companies use surveys to gather feedback. This usually happens afterwards – e.g. by email – and the questions or rating scales are not always sufficiently differentiated to allow conclusions to be drawn for the future: “Would you recommend us?” “Yes or no?” But WHO would make a recommendation and who wouldn’t? And WHY? Companies only answer these questions if they consistently manage their experiences.

New: Conversion of empirical values into data

The special thing about Experience Management is, on the one hand, its extension to include all stakeholders in the company, i.e. not just the Customer Experience but also the Employee and Supply Chain Experience. On the other hand, it is also about converting experience into context-related data to be able to make valid statements – in real time.

Classic challenges

Let us first take a look at the classic and, to date, widespread situation in companies with sophisticated IT systems. These already collect and produce an enormous amount of data without comprehensively evaluating it or deriving specific measures. According to a 2017 Forrester study, “The Total Economic Impact of Experience Management with Qualtrics“, the four biggest challenges facing the companies surveyed are as follows:

  1. Processes are more reactive than predictive
  2. Data silos in different departments prevent information from being linked in a meaningful way and knowledge from being exchanged
  3. There is no comprehensive data on all the stakeholders in the company (customers, suppliers and employees)

The bottom line: Companies know too little about their processes, customers, employees and suppliers, and therefore have difficulties in adapting to the needs and market trends. In this case, business decisions are only based on past behavior or, in the worst case scenario, on one’s own gut feeling. Just because a certain feature of a solution was in particularly strong demand in the past, however, does not mean that it will stay this way in the future – tradition is not a business model.

Visit our website to find out how EASY SOFTWARE implements Experience Management on a project basis and how companies can integrate XO-Data into all their business processes.

Context-dependent combination of X and O data

Your company has access to operational data (O-Data) at various locations – information about direct competitors, employee data in the human resources department, the work statistics of a company, information about suppliers, accounting data, and customer information about a specific process that has been initialized, such as an order process. Data collected about direct competitors helps with the business development to further develop the products and stand out from the crowd. Customer data helps marketing specialists create consumer profiles, which range from the creation of products through to sales and marketing. Work and accounting data help support the internal control of the finances and productivity.

Experience Management enables all such Operational Data (O-Data) to be brought together and combined with Experience Data (X-Data), which relates to the experience. X-Data are provided via finely tuned, individual surveys. Let’s return to the initial question: “How was your stay in our hotel?” Tools such as that from Qualtrics now ask more individual questions: “Do you prefer to sleep in satin or organic cotton?” “Would you like a late breakfast or do you need your scrambled eggs by 6 a.m.?” The difference from existing surveys is the accuracy and speed at which companies are not only able to adapt their offerings quickly and individually, but also to identify future trends. O-Data provide the answer to the question whom do I ask, and what do I ask them? X-Data, in turn, provide the answer: Why did you like something, or why not?

Picture: “How did you like my presentation?” An MVP from a survey after lectures, developed with ApiOmat Studio Web.

XO Data implemented with ApiOmat

The system itself doesn’t know whom it should ask which question, however. Is the person at the desk a managing director or a student trainee? You want to ask the right question to the right person. This means that the context of “whom do I ask, when and what” must be defined beforehand. EASY SOFTWARE has developed the ApiOmat multi-experience platform, a web service that can be connected to existing IT systems. If an order is initiated, for example, the web service from Customer Relationship Management (CRM) retrieves the data about the customer (O-Data) and then initiates the appropriate survey (X-Data), which in this case is provided in cooperation with the Qualtrics tool.

Picture: Architecture of the ApiOmat web service. In this way, XO Data is brought into a meaningful context.

With the ApiOmat web service, a real-time survey is possible at the same time, and/or directly after a process has been initiated, and on the device, app or portal that the stakeholder is currently using. The contextual linking of XO Data allows companies to transform data into intelligence, to automate processes and to drive innovation which is aligned with real needs.

Align business and IT and start creating functional prototypes in hours instead of weeks. With ApiOmat, multi-experience applications can be built faster than ever by decoupling the frontend and backend development.

Practical examples for Experience Management

With XO Data, for example, you can see that a certain type of a red T-shirt is increasingly being ordered. The O-Data initially provides you with process data (What?) and customer data (Who?). The survey for the X-Data is now generated on the basis of the O-Data, and enriches the values with experience-based ratings: Why did the customer order this T-shirt, and what was important to them when they bought it? The more answers you get, the easier it is to identify patterns. For example, you might find that customers who order the red shirt are all the same age and buy it because it is made from organic cotton. In this way, you can identify a trend towards organically grown cotton in a specific target group and adapt your business model accordingly in the interests of offering an even better Customer Experience.

Due to increasing competition for good junior staff, the Work Environment is becoming increasingly important and with it, the Employee Experience. In this case, Experience Management would enable you to ascertain whether and why certain employees want to leave the company and bind them to the company with corresponding improvements.

What is new, however, is the application of the Experience Economy to the Supply Chain Experience, i.e. to suppliers. This relationship is also based on reciprocity: The supplier expects a form of processing that is as uncomplicated as possible, and quick payment. On the other hand, the customer benefits from better availability and favorable delivery conditions. At the beginning of the year, a story in the german magazine “Stern” made the rounds, according to which a tiler from Bavaria wanted to exclude Siemens and Audi engineers as customers, because he was explicitly annoyed by this customer group as the invoices had been paid too late. This anecdote makes it clear: Communicating with suppliers on a par is worthwhile in itself, so that your procurement process continues to function smoothly. It can also help with securing even better conditions. A clear win-win situation.

SAP is driving the Experience Economy and expanding Experience Management to five relevant areas of the company: digital business processes, financial accounting, supply chain, sales and marketing, and human resources. These constitute the ideal of an “intelligent business”, in which data flows smoothly and technology is used to create innovative value.

Conclusion: Experience Management as an Enabler for Digitalization

The basis for Experience Management is data. Of course, the data must be available first, and be able to flow automatically. To achieve this, companies need digital processes, preferably without media disruptions. Only then is it possible to connect XO Data to all the business processes using the EASY ApiOmat Web Service, for example, and to perform analyses in real time. The Experience Economy is therefore becoming the driver of digitalization in companies, and once again demonstrates that digitalization isn’t an end in itself, but offers genuine added value in the form of a better customer focus. In an ecosystem in which companies cover the entire innovation process, from the vision to the finished product, Experience Management is the key to success.

For this reason, at the EASY WORLD 2019 in Mülheim an der Ruhr, we are to a great extent focusing on Experience Management. Together with the auditing company KPMG, we will be presenting the study “When Data Drives Experience – the State of Digitalization in Germany” and also showing the prototype of our XO App.

Exclusive Study: "When Data Draives Experience"

Will the attitude “With digitization from good to better” still suffice in the future? Find out everything about the status of digitization and the use of Experience Management in a representative survey of 400 companies. ⇒ Download now for free!

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Michael Reiserer

Michael C. Reiserer founds, advises and participates in innovative technology companies and since 2014 he has accompanied Leipzig-based Apinauten GmbH, which occupies a key topic of digital transformation with its Multi Experience Platform.