STUDY European Service Assurance Study November 2010 service assurance: accelerating growth through an exceptional customer experience A survey conducted by Vanson Bourne on behalf of CA Technologies
table of contents Background to the study 03 Third-party feedback 04 Executive summary 06 Survey highlights at a glance 07 Research methodology 08 Research findings in detail 09 Conclusions 14 About Service Assurance solutions from CA Technologies 15 Links 15 What customers are saying 16
background to study Delivering an exceptional online customer experience continues to have a direct impact on an organisation s ability to survive, grow, and flourish during these challenging economic times. In July 2009 CA Technologies highlighted the significance of Web Stress and the impact of underperforming Web applications on employees and consumers: http://ow.ly/34zqi Having struck a chord with many organisations across Europe, CA Technologies successfully proved the existence of Web Stress. This was achieved in partnership with Glasgow Caledonian University which undertook the world s first neurological experiment to contrast and compare user experiences to good and bad websites. The stress levels of the 13 volunteers who took part in the experiment rose significantly when they were confronted with a poor online experience, proving the existence of Web Stress. The full results of the study published in February 2010 can be found at http://ow.ly/34zmv Today, CA Technologies continues to lead the Web Stress debate, and in November 2010 published findings from independent research to find out the extent to which European organisations monitor, manage, and use the appropriate technology to deliver an exceptional online customer experience. The 400 interviews conducted across Europe covered a wide range of issues that have an impact on the user experience, including business service quality, delivery and management. Some of the organisations interviewed are already well on the way to optimising the user experience, are minimising any associated risks, and are busily harnessing the power of new technologies such as cloud computing and the mobile Internet to deliver an exceptional online customer experience. However, as the findings illustrate, many are not. The study is intended to provoke further discussion and debate surrounding the need for European organisations to embrace the appropriate service assurance technologies if they are going to accelerate growth by delivering an exceptional online customer experience. 3
third-party feedback In the world of online retail, there is always a high demand for frequent change combined with reliability and stability. Attracting and retaining customers means providing the best possible customer experience, however this can only be achieved if the underlying infrastructure offers high performance and flexibility. The challenge for all business is to provide the base foundation on which the application and business can be fluid and responsive to its customers. This can only be achieved by employing the necessary tools to ensure the infrastructure links to the end-user experience. With the help of CA Technologies, we are able to monitor real-time performance, risk and quality of business services across all of our key physical and virtual environments. CA Technologies Service Assurance: Accelerating Growth through an Exceptional Customer Experience is a much welcomed study. Keith Winnard Team Leader, Technical Services J D Williams ( jdwilliams.co.uk) 4
As more organisations exploit cloud computing, the distinction between business services and the customer contribution to those services often gets blurred. Just look at what has happened to the airline industry. Historically key processes were managed by the airline, but today they are influenced by the passenger, from booking a flight to generating a bar code boarding pass on a smart phone that replaces the traditional paper versions. This transformation is evident across almost every industry including banking and public utilities. Service Assurance: Accelerating Growth Through an Exceptional Customer Experience by CA Technologies is a timely call to action for every organisation to deliver a better online customer experience against the backdrop of the challenging economic climate. Malcolm Fry, Independent Service Strategic Analyst (theitillitebook.com) 5
executive summary the need to evaluate and optimise the user experience is clear This study reveals that more than 80 percent of business and IT leaders fear the online customer experience delivered to their end users was below par. This anxiety was not unfounded: 30 percent of respondents indicated that they had lost revenue, 33 percent felt they were losing employee productivity and 20 percent stated they had lost all confidence in launching new business services. It is no surprise to find that most of the organisations interviewed are suffering from productivity issues and only 27 percent actually have service level agreements (SLAs) relating to the user experience. This is further substantiated by the revelation that more than 60 percent of the organisations questioned were unable to get to the root cause of lost revenue or reduced employee productivity. optimising the user experience is a top priority, but it s getting tougher Nearly 70 percent of business and IT leaders say monitoring and understanding the user experience is more important than ever. Yet 49 percent say this is getting tougher and nearly 40 percent say it is getting more costly as business services get ever more complex. It appears that both business and IT leaders have a good understanding of the problem. However, many IT organisations are ill equipped to mitigate the associated risks. Much of their time and resources are already used up in reacting to user experience issues and having to find and fix problems with limited information. Until IT departments get the support they need to ensure that business services are under control, this problem looks set to increase as online service demands and complexity accelerate. Another issue is that many organisations are not fully able to exploit the advantages of cloud technologies which often compromise growth and competiveness. Overall the study reveals there should be a better understanding between the needs of business and the requirements of IT to meet those needs. It is clear that IT leaders need to improve their visibility of the user experience in order to accelerate business success. Once this is achieved, organisations will be able to make informed operational and capital expenditure decisions to align IT with business priorities and improve the business services that drive revenue. They will also be in a strong position to take advantage of emerging and exciting technologies, like cloud and mobile. A clear view, in real-time, of all infrastructure and application conditions will also enable an organisation to proactively reduce risks and quickly resolve any problems concerning the user experience. Once organisations gain the confidence, systems, and expertise to optimise the user experience, they will be able to enjoy the benefits of increased profitability and improved employee satisfaction. 6
survey highlights at a glance 1. Sixty-eight percent of organisations have not yet adopted a service assurance solution to link real end-user experience, transactions and applications with the underlying systems and network infrastructure supporting them. 2. Acknowledging the importance of service assurance, 69 percent of respondents say monitoring end-user satisfaction is more important than ever. 3. When asked, how will you ensure a continuous user experience whilst adding cloud to your system?, 30 percent of respondents responded, we deal with problems as and when they arise. This strategy and lack of visibility into the end-user experience undermines their ability to ensure a predictable and expected customer experience, deliver new applications and services efficiently and effectively, and proactively not reactively manage IT. 4. Business and IT leaders have little faith in the quality of their online customer-facing service performance. Only 14 percent of respondents were very confident their online services would meet user expectations, while an overwhelming 83 percent were either not very confident or somewhat confident. 5. Only 17 percent of respondents were very confident their employees current online application use would meet their expectations. 6. Forty-six percent of business leaders and IT chiefs do not believe that their current systems allow their organisation to establish the true cost when user-facing Web applications perform poorly. 7. Asked which issues they had faced in the last 18 months as a result of end-user problems with online services or internal Web applications, 37 percent replied escalating costs of resolving issues and problems, and 30 percent recorded drops in revenue. One-third lost employee productivity owing to application downtime or poor performance. And 20 percent of respondents indicated that the business had lost confidence in new service launches. 8. Most organisations don t even know the degree to which the business is affected by service degradations: 63 percent of organisations who experienced a drop in revenue said they were unable to quantify the extent of the revenue loss, and 80 percent of those who indicated the business lacks confidence in launching new services were unable to quantify the impact. Equally important, 75 percent could not measure the damage to brand or company reputation. 9. Only 27 percent of firms have service level agreements relating to the end-user experience. 7
research methodology The objectives of this independent research commissioned by CA Technologies and conducted by the respected international research organisation Vanson Bourne were to examine the extent to which organisations monitor their user experience, how they analyse it, and whether they have systems in place to deal with any problems. The interviews covered a wide range of issues that impact on the user experience including business service quality, delivery and management. Specifically, the research goals were to understand: Where companies are in terms of service assurance The level of adoption of the core technologies Perceived benefits, as well as risks and barriers The importance of optimal service delivery and end-user experience and what companies are doing to achieve this Companies future intentions with regard to service assurance across physical, virtual and cloud environments The extent to which organisations need visibility and control for the adoption of virtual and cloud environments The study Service Assurance: Accelerating Growth Through an Exceptional Customer Experience was conducted by Vanson Bourne, a specialist technology market research company based in the U.K. Vanson Bourne conducted 400 interviews during August 2010 among senior IT managers and business decision makers. The sample comprised respondents in the UK, France, Germany, Spain, Italy, the Nordics, Benelux, and Israel. 8
research findings in detail Sorry our service is down; we don t have a service assurance strategy. By not understanding how well business services are delivered, organisations are jeopardising their customer relationships. The survey found that 68 percent of organisations have not yet adopted a service assurance solution to link real end-user experience, transactions and applications with the underlying systems and network infrastructure supporting them (see Graph 1). It will be absolutely critical for these organisations to embrace a comprehensive service assurance strategy quickly. This will determine their ability to deliver business services across physical, virtual and cloud environments in a very competitive market. Graph 1 Has your organisation sought out and integrated a specific service assurance solution within your existing infrastructure? When asked, how will you ensure a continuous user experience whilst adding cloud to your system?, 30 percent responded, we deal with problems as and when they arise (see Graph 2). This strategy and lack of visibility into the end-user experience undermines their ability to ensure a predictable and expected customer experience, deliver new applications and services efficiently and effectively, and proactively not reactively manage IT. 9
Graph 2 How will you ensure a continuous user experience whilst adding cloud to your system? 1 Do you trust your online service performance? The survey also identifies that business and IT leaders have little faith in the quality of their online customer-facing service performance. Only 14 percent of respondents were very confident their online services would meet user expectations, while an overwhelming 83 percent were either not very confident or somewhat confident (see Graph 3). On a related theme, 46 percent of business leaders and IT chiefs do not believe that their current systems allow their organisation to establish the true cost when user-facing Web applications perform poorly. 10
Graph 3 How confident are you that your current online customer-facing service performance meets user expectations? Moreover, 54 percent of organisations do not believe that their current systems allow them to establish the true cost to the company when user-facing Web applications perform poorly (see Graph 4). Graph 4 Do you believe that your current systems allow you to establish the true cost to the company when user-facing Web applications perform poorly? 11
Business and IT leaders fear the experience of their end users is below par It would appear from the research that revenue and innovation are at risk as organisational resources are devoted to fire-fighting service problems. When asked which issues they had faced in the last 18 months as a result of end-user problems with online services or internal Web applications, 37 percent replied escalating costs of resolving issues and problems, and 30 percent recorded drops in revenue (see Graph 5). One-third lost employee productivity owing to application downtime or poor performance. And 20 percent of respondents indicated that the business had lost confidence in new service launches. Interestingly, 28 percent had inadequate or incomplete information for decision-making. Graph 5 Which of the following issues has your company experienced in the past 18 months as a result of enduser problems with online services or internal Web-based applications? Of concern, most organisations don t even know the degree to which the business is affected by service degradations (see Graph 6). Sixty-three percent of organisations who experienced a drop in revenue said they were unable to quantify the extent of the revenue loss, and 80 percent of those who indicated the business lacks confidence in launching new services were unable to quantify the impact. Equally important, 75 percent could not measure the damage to brand or company reputation. 12
Graph 6 For each of the issues you have said that you have experienced, were you able to quantify the effects of those problems? 2 Part of the reason for this may lie elsewhere in the survey findings: only 27 percent of firms have SLAs relating to the end-user experience (see Graph 7). Graph 7 Do you have SLAs related to any of the following? 3 13
conclusion Many European organisations are failing to determine how well they are delivering business services and more than two-thirds have not yet adopted an appropriate service assurance solution. Organisations need to be proactive, predictive, pre-emptive. They need an early warning system against risks associated with entire service delivery paths. They need to define ITs role in mitigating the associated business risk, including erratic service performance and an unrewarding user experience. So how do they do it? Here are some of the building blocks that need to be considered: The building blocks of a service assurance strategy: Make the link. Once you link the problems a user is experiencing with the probable causes, you can begin to prevent or quickly remedy those problems before they impact on your business. Keep an accurate service model. A critical first step in assuring IT service quality and relieving overwhelmed IT staff is to ensure that services are completely and accurately modelled. You need to be able to dynamically adjust and scale to rapidly changing environments to reliably deliver consistent performance. Eliminate infrastructure risks before they happen. Proactive management of risk to service is essential: you need to be able to identify and address risks to service before they impact on the end user. Pinpoint the root cause of problems. You need to automatically and intelligently isolate, prioritise and determine which components are causing the problem. You need to be able to understand how a failing component can impact on the end user experience. Deliver everywhere. Deliver real-time performance, reduce risk and improve quality of business service intelligence across your physical, virtual and cloud environments. Choose spending on service carefully. If you are only managing aspects of the service delivery infrastructure and not the glue that holds it together, you will often find yourself throwing money at the wrong area. You need to look at investing in a service-centric management solution to maintain good quality service levels. Service assurance technologies such as Service Assurance solutions from CA Technologies can provide all levels of the IT organisation (as well as line-of-business owners and other business stakeholders) with end-to-end visibility into applications and transactions. Introducing top-to-bottom insight over the entire infrastructure, a service assurance solution ultimately delivers a comprehensive, unified understanding of how applications and infrastructure deliver business services. Using this approach, organisations are uniquely positioned to: Increase revenue and improve the customers experience by managing business transactions end-to-end Reduce costs by more proactively monitoring the health, capacity, availability, and performance of the service delivery infrastructure Prevent business-impacting degradations and outages by directing staff actions according to business priorities and make more informed CAPEX/OPEX decisions 14
about Service Assurance solutions from CA Technologies Service Assurance solutions from CA Technologies uniquely link real end-user experience, transactions, and applications with the underlying systems and network infrastructure supporting them so you can understand the real-time performance, risk and quality of business services across your physical, virtual and cloud environments. Service Assurance solutions from CA Technologies gives organisations the before-and-after information they need to understand and prepare for the impact of change. For more information, visit ca.com/us/service-assurance.aspx links Micro-Site - http://ow.ly/369ob Resource Centre - http://tinyurl.com/2dksplo Service Assurance Blog - http://community.ca.com/blogs/apm/default.aspx Web Stress Experiment - http://ow.ly/34zmv Web Stress Survey - http://ow.ly/34zqi Follow us on Twitter: #CAWebstress - http://twitter.com/search?q=%23cawebstress what customers are saying If there s a problem we know about it before the user does and we can fix it before business continuity is affected. Without the CA Technologies solution, I can t think of any other way we could be confident all would work perfectly on match day. Paul Farmer, Head of IT, Arsenal Football Club If a customer is unable to access a specific business service, it will impact their user experience and result in loss of revenue. Ralph Panoff, IT Director, AMAG By implementing some service delivery initiatives we have been able to improve the quality and availability of the user experience. Giovanni Del Mastro, Intesa Sanpaolo 15
CA Technologies is an IT management software and solutions company with expertise across all IT environments from mainframe and distributed, to virtual and cloud. CA Technologies manages and secures IT environments and enables customers to deliver more flexible IT services. CA Technologies innovative products and services provide the insight and control essential for IT organizations to power business agility. The majority of the Global Fortune 500 rely on CA Technologies to manage their evolving IT ecosystems. For additional information, visit CA Technologies at ca.com. 1 Question only asked of IT decision makers who say that any cloud-based system they adopt would be likely to serve information to end users. 2 Only asked of respondents who have experienced these issues. Chart is summary of respondents who answered no, partially, or don t know 3 Question only asked of IT decision makers Disclaimer: The information provided in this assessment report is confidential and provided to you for informational purposes only. Reuse or distribution of this tool without written permission from CA, Inc. is prohibited. The information in this tool is subject to change without notice. CA reserves the right to change specifications and product-related information without notice. All currency noted is in US$. Calculations are estimates only. Your actual savings may vary. 2010 CA, Inc. All trademarks, trade names, service marks and logos referenced herein belong to their respective companies. All information contained herein is subject to change without notice. CA is not responsible for omissions or typographical errors. CS0168_1110