THE BUSINESS SIGNIFICANCE OF POORLY PERFORMING BUSINESS APPLICATIONS

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2 It takes only a few seconds for an unsatisfied e-commerce customer to switch to a competitor s web site, impacting revenue, loyalty and brand. Online retail customers expect fast, highly interactive, cutting-edge and visually appealing e-commerce applications. It is vital in today s online world to create best-in-class experiences to stay competitive and in business. Small details count. A 1-second performance delay in e-commerce response time reduces conversions by 7 percent, according to a study conducted by the Aberdeen Group. 1 For the e-commerce site that sells $100,000 of merchandise per day, a 1-second delay means $2.5 million in lost revenues annually. Literally, the competition is often just a click away in this business. According to a recent 2011 Equation Research 2, a survey of 400 online e-commerce users: three out of five shoppers had a bad experience on a retail web site during the past holiday season. fifty-four percent would abandon a retailer s web site and shop somewhere else after one or two bad experiences. twenty-two percent would turn to a competitor immediately. When it comes to important online retail transactions such as adding items to a shopping cart, checking shipping costs, viewing product demonstrations and completing purchases performance matters! There are clear correlations with increased application performance to increased revenue, customer loyalty and brand image. This paper discusses how you can best manage your customers online experiences by using application performance management (APM) as a competitive advantage for e-commerce success and leadership. TRAILBLAZERS MAKE CUSTOMER EXPERIENCE PRIORITY Cutting-edge web businesses like Google, Amazon, Facebook and Twitter make excellent customer experiences a priority. Whether using a PC, Mac, smartphone or tablet, users get fast, smooth and easy online experiences. These companies have made speed and high quality experiences a number one priority. They set the bar high, and their precedence now makes most other online businesses seem slow in comparison. LOST BUSINESS AND HIGHER COSTS When online customers can t quickly and easily conduct business with you because of a sluggish or stalled application, they become frustrated and may abandon the transaction altogether. Or, they may take their business elsewhere, costing you not just the sale, but the potential lifetime value of the customer. Customers may also turn to your clerks or support center, in which providing a level-one service or resolution can cost you up to $24. 3 Worse yet, poor customer experiences publicized on the Internet or social media can negatively impact your brand, which is more costly yet again to regain. THE BUSINESS SIGNIFICANCE OF POORLY PERFORMING BUSINESS APPLICATIONS After receiving free samples at a high-end spa, a customer goes online to buy more of the same product. After a time-consuming order process, and an inability to get shipping calculations to load, she gives up on the purchase. The company lost a new sale and customer, negatively impacting the ROI on the sample campaign investment. Trying to purchase a new racing bike, an online customer struggles to research products. Frustrated by slow performance at every turn, he leaves the site, and purchases the competition s racing bike. Drawn by a manufacturer s sales on electronics, a customer tries to buy a new device. The web site is slow, performs inconsistently and then actually locks. Not wanting to miss the price, the shopper calls a call center for help (a higher-cost channel), but even the call center was jammed. The customer, originally intrigued by the sale, abandoned the idea to buy. A large retail site, featuring a highly prized celebrity accessory, crashes. The retailer s web site displays the message: Stay tuned. Sorry, we re experiencing some technical difficulties right now. The competitive brand, which sells a very similar item, enjoys significantly increased sales for several days all from the initial company s promotion. 2

3 THE ORIGIN OF E-COMMERCE PERFORMANCE ISSUES Why are e-commerce businesses so vulnerable in this area? Unlike past applications that ran solely in a data center that you fully controlled, modern applications execute code on diverse edge of the Internet devices (smartphones, tablets, browsers), across service provider backbones and content delivery networks. There are a great many connection points and points of potential failure between the customer and your data center. Any and all of these areas along the application delivery chain can experience problems and take your customer from a satisfactory experience to complete frustration. Think of the complexity of your company s end-to-end application delivery chain, from your organization to your customer. Multi-tier architectures, web services, mobile apps and WAN optimization create increased complexity. Virtual and physical resources are mixed in most environments. Monitoring hardware is less effective than in physical-only environments, and traditional tools cannot monitor virtual servers. Most data centers have moved beyond three-tier architectures to n-tier, with some having 10 to 20 tiers. Most large organizations have multiple data centers, adding to the complexity. What s more, the Internet and modern applications are making things much more complicated. Today, applications are dynamically assembled at the edge of the Internet, in the user s browser or mobile application. Third-party components are assembled by the browser and can include functions like content delivery networks (CDN), advertising networks, video, news feeds, shopping carts, web analytics or ratings and review systems. The mobile explosion forces companies to deal with mobile carriers and devices, including smartphones and tablets; and smartphones and tablets each contain a further element of complexity by requiring their own unique page and site optimization. It s not just the data center and the web that are more complex. Cloud-based processing also impacts application performance. Cloud providers rate themselves by availability, but your customers evaluate your business based on performance. Because availability does not ensure performance, you need to also make sure your cloud resources meet your customer expectations. All of these factors combine to create complexity at the edge, where your customers are located. And, customer expectations continue to rise. E-commerce customers now anticipate service wherever they are located and from any device they use, including browsers, mobile devices, and more and more prominently in e-commerce, tablets. They want e-commerce applications to perform easily, intuitively and consistently, with fast and reliable response times. For the average user, 0.1 seconds is an instantaneous, acceptable response, similar to what they experience with a Google search. At a response time of 2 to 4 seconds, interactions begin to slow and customer satisfaction risk increases. After 10 seconds, the user is gone. 4 With so many points that can slow or prevent your customer accessing applications, it can be nearly impossible to monitor performance or quickly pinpoint and resolve problems. So how can you ensure rapid application performance and reliability when facing the complexities of today s application delivery chain? DEPLOYING A NEW GENERATION OF APM DRIVEN BY END-USER EXPERIENCE Many e-commerce businesses struggle to proactively monitor and manage their application delivery chains. But, traditional APM methods fail because they are reactive rather than proactive. Problems can be identified only after they have impacted the customer. In fact, most application access issues are reported by customers; they are not found by proactive monitoring. A wide variety of browsers to further complicate the application delivery chain. It used to be easy: Everyone used Internet Explorer (IE). Now there are many versions of IE, each one works differently than the others. Plus, Firefox, Chrome and Safari are all grabbing their own share of the market. 3

4 Traditional APM tools have another weakness. They provide only partial visibility, leaving organizations with huge blind spots. If you are monitoring only servers or some outside services, you re not getting a complete picture. Traditional monitoring tools may show you green lights, letting you believe everything is okay. In reality, however, your customers are seeing red lights. These blind spots can cause problems you don t even know about. A new generation of application performance monitoring capabilities is required to help you meet these goals. These tools will not only differentiate you from your competitors, but they can help increase your agility and rapid response to issues impacting your customers. This ensures a quality customer experience and protects the continued growth and revenue of your online business. What are the capabilities you should look for when evaluating APM solutions? Test and monitor applications the same way your customers interface with them. What applications are they accessing? How are they doing it (smartphone, browser type)? What location are they at, and what is the quality of service at that location? Measure the impact of the issue, then prioritize it based on the impact it will have on your business. How many users is this problem affecting? Is it a critical transaction? View every touch point across the end-to-end application delivery chain. With no blind spots or interference, you can feel comfortable that when it s green in your data center, it s green for your user, too. Create deep, 24/7 application visibility, so you can trace every transaction in production, from user-click to code line. What is the root cause of an issue and where is it located? Proactively catch performance bottlenecks, outages and other critical issues, before they impact your customer or affect your business. Benchmark your performance against your competition, and continue to mature your monitoring strategies for the highest industry ratings in the business. E-commerce businesses that proactively manage application performance will have a marked advantage in maintaining leadership. THE NEW GENERATION OF APM Required APM Capabilities Optimize Business Transactions Create a high quality experience for your web, non-web, cloud and mobile customers Ensure excellent user experiences across all locations and geographies Accelerate Problem Resolution Quickly troubleshoot and resolve application problems Rapidly identify and receive notifications of performance problems Prioritize performance problems based on business impact Protect Your Revenues Find and fix performance and scalability problems Rapidly determine problem root causes down to the component, SQL statement or method level Reduce testing iterations and cycle time with proactive problem resolution and prevention. Validate architecture for maximum scalability Improve Performance Across Your Application Delivery Chain Rank your site against your competition and other industry leaders Analyze and implement performance best practices Optimize investments in application delivery technology Compuware APM Solutions User Experience Management (UEM) Mobile Monitoring Streaming Monitoring Synthetic Monitoring Deep Application Transaction Management Data Center Real-User Monitoring Mobile and Web Load Testing 360º Deep Application Transaction Diagnostic and Regression Management Deep Application Transaction Performance Engineering Industry Performance Benchmarks 4

5 THE APM ADVANTAGE FOR E-COMMERCE BUSINESSES Compuware APM provides a positive customer experience for e-commerce by running fast, automated diagnostic capabilities throughout the entire application delivery chain, from your customer s perspective. By evaluating application performance across the entire e-commerce delivery chain, Compuware APM solutions ensure fast, seamless access to applications, regardless of how customers access them. Driven by end-user experience, Compuware s new generation of APM offers one integrated approach, instead of the collection of loosely integrated parts offered by some vendors. By tracing every transaction in production, from user-click to code line, the Compuware solution provides the industry s only unified coverage of the entire application delivery chain from the user, through the cloud, to the data center with the deepest 24/7 application visibility. Compuware s APM solution is easy to integrate and deploy. It offers rapid value and a quick return on investment perfect for e-commerce businesses that do not have the resources or bandwidth for lengthy, resource-intensive implementations. CLIENTS SEE CLEAR BUSINESS PERFORMANCE RESULTS Compuware e-commerce clients experience the benefits of a new generation of application performance solutions. Best Buy addressed high traffic/high transaction performance degradation. Zappos.com improved front-end performance by 10x. Brooks Brothers confirmed its web site could handle 7x increase in online transactions. Starwood Resort & Hotels minimized site downtime and prevented 8 percent loss of sales. BuildDirect, reduced downtime by 45 percent and improved page load times by 23 percent. FootSmart lowered its shopping cart abandonment rate by 10 percent, and saw a 5-6 percent lift in revenue. Coolibar, achieved a 50 percent reduction in the time needed to complete a critical seven-step transaction. deflores.com, increased online orders by 25 percent. Autotrader.com reduced root-cause in code issues and BestBuy.com is commonly referred to as Best Buy s largest store. Given the high traffic and transaction volume, company management recognized the risk associated with even a few minutes of downtime or degraded Internet performance. Today, Best Buy relies on Compuware s APM solution metrics and tools to detect most performance issues, before they become problems. The solution monitors site availability and responsiveness in real time from worldwide locations, and it offers recommendations for improving performance. Swarovski and Compuware APM Swarovski, the Austrian maker of cut crystal and related luxury products, gained visibility into the IT function by adopting Compuware APM. It also sped online checkouts by 20 percent, potentially saving the company a fortune in abandoned sales. 5 With the growth of consumer electronics and the acceleration of e-commerce, Best Buy is positioned well to extend its leadership on the web. Exceeding its customer expectations, both in stores and online, is Best Buy s strategy. Leveraging Compuware APM will help the company stay focused right where it should on the customer. 5

6 inefficiencies from weeks to minutes. GET READY TO IMPROVE THE CUSTOMER EXPERIENCE AND INCREASE BUSINESS VALUE How can you differentiate yourself from your competitors? Exceptional online customer experiences create loyalty and higher conversion rates, which lead to increased profitability. Delivering round-the-clock service, with applications that work everywhere at every time, is no longer an option. To boost customer service and satisfaction, you need detailed, end-to-end monitoring of the application delivery chain, with tools that help you clearly understand the business impact of each problem. In this way, you can easily prioritize and resolve critical issues, before they impact your customer and your business. Compuware helps companies increase the profitability and reduce the risks associated with delivering mission-critical, customer-facing business applications. Compuware APM provides actionable insights and process improvement techniques that enable e-commerce businesses to achieve and maintain peak performance and high quality customer experiences. ABOUT COMPUWARE APM Compuware APM is the industry s leading solution for optimizing the performance of web, non-web, mobile, streaming and cloud applications. Driven by end-user experience, Compuware APM provides the market s only unified APM coverage across the entire application delivery chain from the edge of the Internet through the cloud to the data center. Compuware APM helps customers deliver proactive problem resolution for greater customer satisfaction, accelerate time-to-market for new application functionality and reduce application management costs through smarter analytics and advanced APM automation. With more than 4,000 APM customers worldwide, Compuware is recognized as a leader in the Magic Quadrant for Application Performance Monitoring. To learn more about Compuware APM, please visit: compuware.com/apm WHERE ARE you at TODAY? Peak Period Business Preparation Think about the process of preparing your web site for the holiday shopping season from launching a new shopping application and providing capacity for peak traffic to the speed of showing products and features, cross-selling and the ease of accepting orders. Which part of that process concerns you most? Assessing the Customer Experience When assessing the quality of the online experience you deliver to customers, what metrics do you use and how do you gather them? How actionable is the information, in terms of understanding what to fix or tweak to improve the online experience and increase customer satisfaction? Problem Resolution How do you currently find out about problems regarding your online performance and customer experience? Are you able to see what the business impact is in terms of revenue and number of users? Can you prioritize which ones to address first based on business impact? Ongoing Improvements Benchmarking is a great way to assess how your company performs against your competitors online services. Do you have a benchmarking process in place? Do you use it to maintain or increase your online performance standards? the compuware advantage Compuware is used by more of the top 500 online retailers than any other APM vendor for the sixth straight year. Compuware is the No. 1 provider of web performance monitoring solutions for the top 500 U.S. online retailers for the sixth consecutive year. Five of the top six online retailers are Compuware customers (#1-Amazon.com, Inc.; #3-Apple, Inc.; #4-Walmart.com, #5-Dell, Inc.; #6-Office Depot, Inc.) 6

7 1.) The Performance of Web Applications Customers Are Won or Lost in One Second, Aberdeen; November ) Compuware Peak Time Internet Usage Study, Equation Research; November ) How Does Your Service Desk Stack Up? Part 2: Service Desk KPIs, MetricNet. 4.) Usability Engineering, Jakob Nielsen (ISBN ). 5.) Clear as Crystal: How Swarovski Got Its Single Pane of Glass, Computer Business Review; July 5, 2012 Compuware Corporation, the technology performance company, provides software, experts and best practices to ensure technology works well and delivers value. Compuware solutions make the world s most important technologies perform at their best for leading organizations worldwide, including 46 of the top 50 Fortune 500 companies and 12 of the top 20 most visited U.S. web sites. Learn more at: compuware.com. Compuware Corporation World Headquarters One Campus Martius Detroit, MI Compuware Corporation Compuware products and services listed within are trademarks or registered trademarks of Compuware Corporation. Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names may be trademarks of their respective owners rf