The Future of Enterprise Communications: The Cloud Redefines Customer Experience

A study by Oracle Communications.

Introduction Many enterprises are in the midst of digital transformation efforts. Specifically, decision makers in enterprise communications need to enable their organizations with flexible systems that can respond to changes in the business. This is a challenging time.

Enterprises must be prepared to confront these challenges with constrained budgets and increasing expectations.Are advances in communications technologies helping?How are enterprises doing?

Oracle’s report, “The Future of Enterprise Communications: The Cloud Redefines Customer Experience,” surveyed 323 individuals at enterprises with decision-making authority for communications hardware and software regarding how they might help overcome challenges and harness opportunities by leveraging cloud communications technologies.

For the purpose of this study, a communications technology was defined as the hardware and/or software that enables communication between employees, customers, and partners. Such technology could be deployed in the cloud (private or public) or on premises at the enterprise, and may include infrastructure (PBX/UC), platform (Session Border Controller), or application technologies (cloud platform, cloud service), applications (collaboration tools, customer engagement applications) or telecommunications services (AT&T, Verizon).

Oracle conducted online surveys with 323 communications technology decision makers at enterprises across North America.

Industry Company Revenue

Healthcare/Life Sciences

Manufacturing Communications

Educationand Research Energy

Other

Engineering andConstruction

PublicSector

Financial Services

Professional Services

Hospitality and Retail

Technology

Under US$100million

US$100 million to US$500 million

US$1 billion to US$10 billion

US$500 million to US$1 billion

More than US$10 billion

Q4: In which industry is your business?

Q6: What is your company’s annual revenue?

The survey respondents represented a wide spectrum of company sizes and job roles.

Job FunctionEmployee Count

Finance 13%

Information Technology 23%

Sales/Marketing 12%

Operations 39%

Other 13%

Q25: What is your main job function?

Q5: How many people are employed in your company?

500 to 999 17%

1,000 to 2,499 23%

2,500 to 4,999 16%

5,000 to 9,999 11%

More than 10,000 33%

Respondents described their company market positions as “competitive” and adoption of technologies as mostly “moderate.”

Market Share Position Communications Technology Adoption Culture

Leader: Communications technology is highly strategic

Aggressive: Communications technology is strategic

Moderate: Communications technology is somewhat strategic

Conservative: Communications technology is not strategic

Q9: Which statement most closely describes your company’s market share relative to your closest competitors’?

Q10: How would you describe your organization’s culture in regards to adopting communications technologies?

Solo Market Leader 17%

Share Market Leadership with 47% One of Two Competitors

Challenger with Competitive 30% Market Position

Not in a Market-Leading Position 4%

Not Sure 2%

Deploy 12 to 18 months ahead of competitors to create and sustain competitiveness

Deploy ahead of most other organizations as a source of competitive advantage Deploy conservatively but make exceptions on a case- by-case basis

Deploy when proven to deliver a benefit and generally after widely adopted by other companies

8%

27%

52%

13%

State of Communications Within the Enterprise

73 percent of enterprises will accelerate the use of communications technologies as they move to the cloud in the next five years, ultimately simplifying operations, reducing costs, and increasing flexibility

Communications technologies will accelerate with the cloud:

65 percent agree that communications embedded within cloud applications (CRM, ERP, etc.) will become the dominant way of communicating with employees, suppliers, and customers

Communications will become more ubiquitous and integrated:

Driven by evolving customer expectations and competitive threats, enterprises need to take a more agile/flexible approach to communications

Enterprises are worried that not deploying new communications technologies could result in loss of customers, revenue and/or competitive advantage

Not deploying new comms technologies will result in high costs:

Despite barriers (security (#1), organizational challenges (#2), integration with legacy systems (#3)), enterprises that embrace new communications technologies are able to establish or maintain market-leading positions

Enterprises see benefits in using communications cloud services, including increasing flexibility, reducing costs, and increasing worker productivity

Despite barriers, enterprises see the benefits of the cloud:

Q12: How important are each of the following objectives to your organization within the next one to three years?

Enterprises are focused on enhancing customer experience and improving employee productivity, while reducing costs.

Most Important Business Objectives

Enhance the customer experience

Reduce costs

Increase employee productivity

Accelerate innovation

Generate new revenue streams

Improve business agility

Simplify operations

Connect suppliers, customers, and partners

RankingObjectives

The objective to “enhance the customer experience”

is very much aligned with overarching digital-

transformation initiatives

#1

#2

#3

#4

#5

#6

#7

#8

Enterprises risk losing customers, revenue, and competitive advantage if they don’t meet their customers’ expectations of engagement and experience.Drivers of Adopting New Communications Technologies

Cost reduction #1

Evolving customer expectations #2

Competitive threats #3

Obsolescence of legacy technology #4

Emerging or disruptive opportunities #5

Influence from lines of business #6

Outlook Without New Communication Technologies

Loss of Revenue

Loss of Competitive Advantage

Loss of Customers

Loss of Talented Employees

Slower Growth

Loss of Employee Productivity

Loss of Brand Perception

Other

0% 10% 20% 30% 40% 50% 60%

Q14: What might drive your organization to deliver new communications technologies in the next one to three years? (please stack rank from most likely (1) to least likely (7))

Q16: What are your concerns if your organization does not deliver new communications technology solutions in support of your organization’s objectives? (select all which apply)

Security concerns #1

Organizational challenges and culture #2

Integrating with legacy systems #3

Lack of investment resources #T4

Legacy/regulatory challenges #T4

Lack of expertise #6

Lack of clear benefits #7

Relinquishing control #8

Other #9

Even though security concerns are the #1 barrier to adopting the cloud, only 32 percent consider cloud-based communications less secure than on-premises solutions.

Q15: What are the obstacles your organization faces in delivering new communications technologies? (please stack rank the obstacles from most challenging (1) to least challenging (9))

Q18: Are cloud-based communications services more or less secure than on-premises solutions?

Barriers to Adopting New Communications Technologies

Cloud Communications Security Versus On-Premises

Cloud-based communications

services are considered “more secure” by 25 percent

of respondents and “about the same” by 35 percent

Not sure 8%

More secure 25%

About the same

35%

Less secure 32%

Those that described their communications adoption culture as “Leader” or “Aggressive” tended to achieve higher growth rate relative to their plan (more than 10 percent)

Communications Technology Adoption Culture

Q10: How would you describe your organization’s culture in regards to adopting communications technologies?

Q11: How would you describe your organization’s revenue growth rate over the past fiscal year against your plan?

Leader: Communications

technology is highly strategic

Aggressive: Communications

technology is strategic

Moderate: Communications

technology is somewhat strategic

Conservative: Communications

technology is not strategic

Deploy 12 to 18 months ahead of competitors to create and sustain competitiveness

Deploy ahead of most other organizations as a source of competitive advantage

Deploy conservatively but make exceptions on a case- by-case basis

Deploy when proven to deliver a benefit and generally after widely adopted by other companies

Were lower than plan

Achieved plan or were close

Achieved 1% to 9% higher growth rate than plan

Achieved 10%+ higher growth rate than plan

Those that described their communications adoption culture as “Conservative” tended to achieve a lower growth rate relative to their plan (lower than plan or achieved plan/were close)

6%

31%

51%

11%

32%

32%

27%

9%

0%

24%

59%

18%

3%

23%

62%

13%

Enterprises that view communications technology as highly strategic achieve higher growth rates.Revenue Growth Rate by Communications Adoption Culture

More than 50 percent plan to embed communications into their business applications to help improve their customer experience.

Plans to implement new communications technologies are very

much aligned with one or more of the top three business

objectives expressed by respondents

Q13: When do you plan to implement the following communications technologies?

Plans to Implement Communications Technologies

Team chat

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Communications embedded into business applications

SD WAN

Contact Center as a Service

Unified Communications and collaboration as a cloud service (UCCaas)

Web Real Time Communictions (WebRTC)

Call Recording in the Cloud

Omnichannel contact center

Communications Platform as a Service (cPaas)

SIP Trunking

Implemented/Planning Evaluating No Plans Not Sur e

Business ObjectivesCustomer Experience

Cost Reduction Productivity

“ Most of my company’s interactions with customers start on the web, on a mobile device, or in an application.”

“ Communications embedded within cloud applications (CRM, ERP, etc.) will become the dominant way of communicating with employees, suppliers, and customers.”

“ My lines of business are increasingly asking for live customer engagement experiences (video, desktop share, remote control) through digital channels (web, mobile).”

Agree that most customer interactions start on the web, on a mobile device, or in an application

Agree that lines of business are asking for live customer- engagement experiences

Agree that communications embedded within cloud applications will become the dominant way of communicating with employees, suppliers, and customers

56% 60% 65%

Q22: Below are some statements that enterprises have used to describe their feelings towards communications technologies. For each statement, please indicate whether you agree, disagree, or are not sure.

Driven by customer-experience objectives, communications will become embedded into cloud applications.

Achieved 10%+ higher growth

rate than plan

Achieved 1% to 9% higher

growth rate than plan

Achieved plan or were close

Were lower than plan

Not Sure No Plans Evaluating Implemented/Planning

19%

32%

31%

29%

67%

60%

56%

53%

7%

4%

4%

0%

7%

3%

8%

18%

Q11: How would you describe your organization’s revenue growth rate over the past fiscal year against your plan?

Q13: When do you plan to implement the following communications technologies? (Communications embedded into business applications (click to call, SMS))

67 percent of high-performing enterprises have embedded or plan to embed communications into their business applications.

Those with higher growth rate relative to their plan are currently implementing or planning to embed communications into their business applications

Those with lower growth rates have no plans or are not sure about their plans to embed communications into their business applications

Communications Embedded into Business Applications

Q20: How would you rate your organization’s ability along each of the following dimensions? (A = highest ability, F = lowest ability):

Integrate disparate communications systems

Infuse communications into business transactions

Yet few respondents give their organization an “A” for its ability to integrate disparate communications systems or embed communications into business transactions.How would you rate your organization’s ability to...

11%

A

52%

C or below

Integrate Disparate Communications Systems

13%

A C or below

56%

Infuse Communications into Business Transactions

Communications Education and Research

Energy Engineering and Construction

Financial Services

Manufacturing

Professional Services

Public Sector Technology Healthcare / Life Sciences

Hospitality and Retail

Other

Q20: How would you rate your organization’s ability along each of the following dimensions? (A = highest ability, F = lowest ability)

Many industries are struggling to integrate disparate communications systems and infuse communications into their business transactions.

Ability to integrate disparate communications systems: Rated C or below

Ability to infuse communications into business transactions: Rated C or below

Ability to integrate disparate communications systems: Rated C or below

Ability to infuse communications into business transactions: Rated C or below

40%

60%

56%

61%

48%

56%

80%

68%

43%

61%

43%

38%

40%

60%

56%

61%

48%

56%

80%

68%

43%

61%

43%

38%

Q22: Below are some statements that enterprises have used to describe their feelings towards communications technologies. For each statement, please indicate whether you agree, disagree, or are not sure.

Agree that employees are not as productive as they could be, as a result of inadequate communications tools.

49%

Enterprises agree they need a more agile approach to communications but aren’t certain they have the right expertise.

“ Our employees are not as productive as they could be, as a result of inadequate communications tools.”

“ My company needs a more agile and flexible approach to its communications infrastructure.”

“ I am concerned we don’t have the right expertise to deploy new communications technologies.”

Agree that their company needs a more agile and flexible approach to its communications infrastructure.

65%Are concerned they don’t have the right expertise to deploy new communications technologies.

46%

74%16%disagree

agree

Q22: Below are some statements that enterprises have used to describe their feelings towards communications technologies. For each statement, please indicate whether you agree, disagree, or are not sure.

Enterprises agree that cloud-based communications are a key factor in achieving business objectives.

“Cloud-based communications is a key factor ultimately simplifying operations, reducing costs, and increasing flexibility.”

Agree

Disagree

Not sure

Q21: What is the relative importance of these factors when selecting a communications technology provider? (Distribute a rating to indicate the relative importance of each factor such that the total rating of all factors equals 100)

Enterprises looking to cloud communications vendors see quality and cost as table-stakes, but expect much more.

(APIs, integration, interoperability, ecosystem)

Simplification#4

(Saves time, reduces effort, avoids hassles)

Access#5

(Roadmap, story, leadership, innovation)

Vision#6

(Capabilities, scalability, performance, reliability)

#1Quality

(CapEx, OpEx, TCO)

Reduce Cost

#2

(Security, privacy, regulatory)

Reduce Risk

#3

73% agreeMy company will accelerate the deployment of cloud-based communications technologies over the next five years.

Q22: Below are some statements that enterprises have used to describe their feelings towards communications technologies. For each statement, please indicate whether you agree, disagree, or are not sure.

“ My company will accelerate the deployment of cloud-based communications technologies over the next five years.”

All things considered, nearly three-quarters of companies expect to accelerate the deployment of cloud-based communications technologies over the next five years.

Oracle’s Take

Enterprises are in the midst of digital transformation initiatives. Adoption of cloud-based solutions helps companies become more agile, afford them flexibility, decrease cost of entry and enable them to test new strategies—leading to better business outcomes.

The Cloud correlates with better business outcomes:

Today’s empowered customers are redefining their “ideal experience” as they communicate with businesses and are dictating the terms of engagement. They are choosing interactions on mobile devices and an engagement that is personalized, real-time and live— companies must adapt.

Customer experience is paramount:

Embedding communications channels into business workflows has historically been challenging but remains key to enhancing the customer experience and increasing productivity. Enterprises are seeking more agile/flexible approaches that overcome internal expertise gaps. The Cloud is the game-changer.

Enterprises are embedding communications:

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