Experience System of Record — A strategic advantage for Adobe?

Offering Software as a Service (SaaS) and Platform as a Service (PaaS), Adobe Cloud Platform is now competing with tech giants like IBM and Oracle. Today, the services have been expanded and put into three main categories: Creative Cloud, Experience Cloud, and Document Cloud.

All the data gathered on the platform is processed by leveraging Adobe Sensai, which utilized artificial intelligence (AI) and machine learning to provide better and more personalized customer experiences. Adobe has recently announced to come up with a customer experience record keeping system, which is being touted as the next generation cloud platform. While the benefits of data gathering are said to be optimizing customers experiences, there exists a vague line between data collection and individual privacy, and it is going to play a major role on the success of the nowadays business model of Adobe.

INTERNAL ANALYSIS

CURRENT SITUATION

The way rules are shaped in a marketplace has changed and in the new marketplace, businesses do not make rules anymore rather customers do. Customers require continuous and personalized experience in the real-time which requires a new level of design agility and data connectivity. Adobe’s competencies include its software and services, and to converge these two Adobe has introduced its Adobe Experience cloud to ensure continually connected and improved services. Adobe experience cloud integrates people, mobile interactions, assets, activation subscription and ensures collaboration in real time. Adobe aims to achieve excellent customer experience by having a cloud platform for customer’s record keeping from both Adobe cloud and external data source. This new data model will provide tools for a data scientist to build custom models to enhance the experience and product offerings as follows:

1. Unique audience profiles: This tool will help build a unique audience profile to identify the most valuable customers across all the digital platforms and perform customer intelligence. Even if they hop between different digital channels, the customer can have an omnichannel experience and the customers will receive a personalized content based on this information.

2. Creating data partnerships: Adobe Experience cloud is performing as a switchboard model by acting as a strategic partner between related organizations and add to customers profiles giving itself a competitive advantage. This will help integrate the data economy with the experience economy and companies attaining an edge over the competitor by obtaining access to other company’s data. For example: Airline companies own the data about the reward members and for business travelers. This piece of information can upscale the business of a credit card company who want to market travel rewards card to business travelers.

Key Takeaway — With the above-mentioned product offerings Adobe is focusing more on digital marketing, from the standpoint of product development and positioning of the product. This might create a non-marketing use case making it less appealing to companies which require Data Experience platform integrated with security feature such as Service portals to ensure personalized access to systems. This brings a question whether Adobe will still maintain the Right to win in the current marketplace or not.

RIGHT TO WIN

Adobe produced record results in 2017 and is ahead of its earnings in the first quarter of 2018. They have 88% revenue from recurring sources. The company has achieved record cash-flow has have received increased revenue per user across all product categories. These facts put Adobe in a good position financially. Adobe was also named as a leader in 2017 Gartner Magic Quadrant for digital marketing hubs, for the third year in a row. The new experience record keeping system in place is supposed to provide a differentiation and an opportunity to keep up in the CRM tool market. With a hugely successful product portfolio in place, we believe that Adobe has its right to win currently but it will have to put a lot of efforts to maintain it.

CORE COMPETENCIES

Adobe’s core competencies include its unique and universal services and software. Company’s distinctive product offerings, coupled with excellent customer experience is why it acts a center of gravity for many customers. Adobe experience cloud product synchronizes the services aimed towards optimizing digital experiences with a shared infrastructure for content and audiences. Adobe is offering a broad collection of technologies aiming at cloud-based systems and to enhance the digital marketing use cases. Adobe focuses on usability by business roles which advances the customer’s agility and responsiveness. It has gained the expertise through experience with global multi-brand organizations and its experience cloud accounts for expansion for partner and agency for ecosystems of internal and external content sources and destinations. With all the offerings mentioned above, we believe Adobe still abets its core competency of encompassing many products and services. It has effectively raised the aspirations and expectations of customers, convincing the competitors to follow, which is explained further in the section for competitive analysis.

With the introduction of Adobe Experience Cloud, Adobe provides a platform like a switchboard profit model. The more the business join the board and the more data is collected and used for customer intelligence the more profitable model it will be. The various business who wants to use the customer data and transformed customer intelligence to differentiate their product offering are attracted to Adobe giving Adobe a chance to pull more businesses and making the platform more profitable.

Key Takeaway — Since data gathering and processing is beneficiary to both the businesses and customers, but the process includes record keeping of customers data which has serious privacy implications, necessitates a tool-set to have an extra compliance layer to not disturb its existing core-competencies.

JOBS TO BE DONE

Based on Adobe’s core competencies and the rise of experience cloud, we can see that the job they’re trying to perform is managing content for their customers digitally and help enterprises enhance their customer experiences. We need to analyze whether the accumulation of data helps in any way to improve or support this purpose.

STRENGTHS AND WEAKNESSES OF DATA GATHERING DONE BY ADOBE

Strengths -
Adobe provides seamless and highly personalized digital customer experiences across multiple devices and platforms. Adobe’s advertising cloud is industry’s first end to end platform-managing advertising spanning traditional TV and all digital formats. It is focused on the creation management and delivery of content. Adobe offers integrations with Creative Cloud, and Adobe Experience Manager, Adobe Target, and Adobe Analytics offer top-rated solutions for managing mobile and web experiences. Having content and website/mobile app, Adobe makes itself a key component of not just marketing, but sales, service, and even product teams. Adobe’s greatest strength is its partnership with Microsoft. Microsoft’s Dynamics CRM platform is helping Adobe overcoming its weakness in customer data. With the Microsoft integration, Adobe is able to offer the three essential data components needed for CX, web analytics (unknown customers), CRM (known customers) and third-party customer data (with Adobe Audience Manager). Their next generation cloud platform — Experience System of Record, brings together the power of data, intelligent services, content and an open eco-system with GDPR readiness, which puts up a strong case for them.

Weaknesses -
Adobe’s intense focus on digital marketing right from positioning to product development can make it less appealing to companies that want a Digital Experience Platform (DXP) for other purposes like service portals that do not require targeted content and campaigns but require security and integration to ensure personalized access to aggregated systems. Adobe has deployment complexity which means its DXP product components are complex and Adobe is still working to integrate them. There is a need for engineering talent which might be difficult and expensive to obtain. Adobe’s DXP solutions are usually priced at a premium. Even though Adobe has recently introduced lower-priced options, including AEM Sites Basic, AEM Assets Basic and Adobe Analytics foundation, for mid-market organizations, large organizations will still find Adobe’s pricing relatively high.

PERFORMANCE ANALYSIS FOR ADOBE

We are using three use-cases that Adobe performed for three clients, to understand the capability of their data analytics platform.

1. Hyatt
What Adobe provided — Adobe analytics, experience manager, marketing cloud and creative cloud. These comprised tools to support the customers’ journeys with quality based and insightful experiences through websites and channels of the client. Used customer data to test and quantify the effect of website changes, efficiently create content for faster updates with relevant user information and centralized the assets with associated content in a central location for use by content authors worldwide.
Strategic Impact — Increased traffic and revenue, centralization of assets, enhance customer journeys.

2. Scottrade
What Adobe provided — Adobe experience management solutions with Adobe marketing cloud. Gathered user data for customer segmentation and targeting. Enhanced the view for marketers across different channels.
Strategic Impact — 40% of new account openings, personal experiences encouraged brand loyalty.

3. NetApp
What Adobe provided — Used and tracked customer data to transform disparate marketing teams into a collaborative business group. Provided insights about overall customer base and audience segments to garner more engagement.
Strategic Impact — Boosted site-wide engagement in terms of click-through rate by 1705 and conversion by 13%.

Other strategic impacts made for the clients by data gathering processes implemented by Adobe include 33% landing page conversion for Autotrader.com and 1100% boost on digital channel revenue for ‘hhgregg’, by using customer data to identify high-value audiences and helping partners target more relevant segments.

Key Takeaway — Data gathering processes implemented by Adobe has helped its client achieve strategic milestones. This signifies that Adobe indulging in data collection initiatives is strategically impactful.

EXTERNAL ANALYSIS

MARKET TRENDS

Growth of the concept of Experience Economy -
In the current marketplace, customers are more demanding than ever before. There is a high jump in the concept of experience economy where products and services are valued on the basis of the quality of customer experience they provide. More than half of the customers say that they have switched companies on the basis of poor experiences. 62% of companies view customer experience delivered by the contact centers as a competitive differentiator as per the Deloitte survey. As per Gartner, by 2018, 50% of the organizations will be redirecting their investments to customer experience innovations. These statistics definitely depict how experience economy is growing and customer experience is becoming an integral part of the offerings of a company.

Data collection and processing to give important insights for building up a powerful customer experience have become a core technique for businesses. It allows to get personal and relevant for the customers, such that more than 85% marketers report success with personalization. It helps in understanding what’s working and what’s not, in responding back to customer end glitches faster and in mapping the forward-facing journey accurately. Customers benefit from a more accurate and proactive, targeted use of the company’s offerings, targeted and relevant offers and user-friendly easy-to-use products. All these benefits lead to increased brand loyalty, increases retention, reducing churn and help in finding new market opportunities. It also helps in cross-selling, which accumulates around 35% of revenue for Amazon. Data mining has huge strategic effects in building up an experience economy. Along with this, in order to provide excellent customer experience, customer profiling is an important step. To identify patterns across customer behaviors for getting useful insights, CRM tools are required. As Adobe is adding its experience record keeping system for customers, it surely has a potential to act as an efficient CRM tool. This provides a Big Enough Market Insight for Adobe to expand its data gathering and collection processes.

External trends in Data and Platforms -
Many organizations across the world are collecting data, it has been expanded beyond than marketing. Companies want to see their impact and influence based on the insights. Following are some stats –
1. There is a rise in the demand for experience-based data management platforms (DMPs) — 77% believe that experience-based data platforms will help in making their organization successful.
2. 51% who are utilizing a DMP right now will be switching to another one in few years due to shortcomings of the current generation ones.
3. 71% organizations will be increasing their audience management budget.
4. 50% want to use DMPs on their own without getting them implemented by a third-party.
5. IT Teams of different organizations play a major role in deciding upon and utilizing DMPs.

By introducing the new customer experience record keeping system and turning itself into more of a CRM tool, Adobe is trying to align itself with the upcoming trends. The statistics above show that there is an expanding market for Adobe to continue investing in data analytics processes. Straining on point 2, the current generation of DMPs have loopholes. By introducing the record keeping system, the DMP provided by Adobe will switch to next generation of cloud platform. Also, Adobe’s experience cloud can eliminate the need of third-party implementation of DMPs which will attract more organizations to utilize that, as suggested by stats above. A well-equipped DMP utilizing the customer experience record system will definitely be aligning with the Jobs to be Done.

Key Takeaway — As the market is moving towards customer experience-oriented economy, data gathering processes play an important role to prove beneficial for the companies. There is a penetrable and addressable emerging market for Adobe experience cloud platform. Investing more towards data gathering processes looks important, safe and logical.

BUYER UTILITY MAPPING

After looking through the market trends, it seems safe to state that there is a shift towards data acquisition and usage for customer experience. However, we must consider whether this process is worth investing in by looking into its potential uses. It could be a game-changer or just a hype that companies are falling for. We look at the buyer utility map for customer experience here to consider what services were being offered by Adobe originally and compare it with the opportunities presented by the use of data.

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Figure 1 Buyer Utility Map for Adobe Services

Through the buyer utility map, we notice the areas where Adobe traditionally served customers, which are as follows:

1. Simplicity in Delivery: Through its easy to access services and intuitive interface, one of Adobe’s primary competencies has been to provide a web engagement solution accessible to many.

2. Improving productivity in Usage: It is easy for the customers to improve productivity by using Adobe’s tools and performing tasks faster.

3. Improving fun and image in Usage: By providing graphic solutions to customers, and by being intuitive about their needs, Adobe provides a great customer experience in this sphere.

We also identified areas where data accumulation could help Adobe improve experience where they were originally not doing so.

1. Convenience in Usage — By providing a tailored solution to a client or an individual customer, it is easy for the customer to access the required functions on an individual level and develop business insights relevant to the industry on an enterprise level. This helps in increasing customer retention for Adobe on the basis that to shift into a different system, the customers have to give up a system which was specifically built for them.

2. Convenience in Supplements — Adobe’s data collection will make it easier for customers and enterprise clients to use their additional features better. For individual clients, this offers an opportunity to broaden their scope of work by implementing other features (which Adobe recommends through their data). For enterprise customers, Adobe can provide marketing and advertising insights which could help them expand based on what they do and who are they targeting.

3. Simplicity in Maintenance — The main issue with data collection which rises in a company is aggregating data from various departments and making sure the records and identities are matched. Taking insights from this aggregated data becomes more useful and helps the company in better ways.

Key Takeaway — We note that the usage of customer insights to draw data and using it for their benefit is a way Adobe can make its platform more customer friendly. By using this customer-centered approach to their benefit, Adobe can create a huge strategic impact.

COMPETITIVE ANALYSIS

We specifically focused on Adobe Experience Cloud, which aims to provide combined solutions in marketing, analytics and content management to enterprises. Market and industry affecting Adobe Cloud Platform business model are analyzed using the competitive radar. In the following radar, Adobe faces direct competition from Salesforces, Oracle and IBM, which provide full-range solutions to corporations. Adobe faces lateral competitions from companies like HubSpot, Episerver, and Sitecore, which provide some of the software products focusing on either marketing, analytics or web content management.

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Adobe Cloud Platform’s Competitive Radar

Salesforce: The Salesforce Platform allows users to customize and extend their CRM functionality based on the needs. Salesforce is the biggest competitor for Adobe Experience Cloud that is looking forward to becoming a CRM tool.

Oracle: Oracle Cloud Platform emphasizes on its openness and integration, and it supports various third-party and open source software. It aims to eventually be able to “predicting behaviors” using its AI technology.

IBM: With its Watson platform, IBM has supremacy in providing supreme digital marketing and analytics services by using artificial intelligence. IBM has spent more than $1.4 billion on acquisitions, covering from campaign management, marketing automation to analytics.

HubSpot: HubSpot is a public traded company providing tools for content management, web analytics, social media marketing and search engine optimization. The platform of HubSpot is comprised of three parts: CRM Free, Marketing Hub, and Sales Hub.

Episerver: The Episerver Digital Experience Cloud software platform offers web content management, digital commerce and digital marketing. Episerver has conducted several mergers and acquisitions of companies providing services like searching, commerce personalization, and marketing automation.

Sitecore: It provides e-commerce solution, web content management, digital analytics and marketing automation software. The seamless, adaptive experience is their advantage. Its system allows the exchange of data among third-party systems and exchange content with any external sources.

Key Takeaway — Almost all competitors have provided a cloud-based platform for customers to access all kinds of services available. And all of them are trying to implement AI and machine learning to provide more specific and personalized services and experiences. Adobe is for sure one of the leaders in the industry in platform services. But there is an unending need to work on differentiability in terms of offerings. And this is where efficient data accumulation and analytics would help.

OPPORTUNITIES AND THREATS FOR ADOBE’S DATA GATHERING ACTIVITIES

Opportunities -
Increase in the use of internet and smartphones caused the digital marketing industry to grow with an estimated CAGR of 12% by 2020. With these services, Adobe has a chance to generate great revenues from this growing marketing industry. Also, Adobe’s marketing cloud business and other services are expected to increase after its collaboration with Microsoft. Adobe is also expanding its partnership with Wipro expanding across the Adobe Experience Cloud portfolio. This will enable them to create, build and manage advanced digital experiences for their customers, as well as digital marketing solutions and campaigns across broad geographic regions.

Threats -
Adobe faces competition from a lot of companies for its products and services.
Many products from open source enterprises pose a huge threat to the company. An example can be the digital media segment of the company which faces a great threat from social media platforms like Facebook and Twitter. Competition forces price cuttings and restricts profits. Also, Adobe receives a lot of confidential information from customers that is vulnerable to viruses or malicious software or hackers that can breach the security system of Adobe. If this sensitive information is leaked, it could be used by third parties in fraudulent deeds leading to bad reputation or decline in brand name and customers

CONCLUSIONS

ADOBE’s Data Gathering and Processing Provides a Strategic Advantage

From the outcomes of our analysis, we have concluded that data processing and gathering for individual customers, provides and will provide a strategic advantage to Adobe. From the internal analysis, we found that Adobe is capable enough to carry out these processes. From the external analysis, we found that the market trends align with the need and continuation of Adobe’s data collection strategy. But along with this, data security and privacy-related threats should not be ignored. The newly announced customer experience records system combines data across GDPR readiness as well, which is a good start towards tackling the threat.

From the current situation analysis and the concept of Right to Win, we inferred that Adobe with its Adobe experience cloud unlocks the digital ability to drive the business value. While data used to be the significant advantage for early adopters of marketing analytics technology, it is par for the marketing analytics now. Hence, Adobe should continue to create value from the data by aligning their internal teams, process and technologies to capture and draw insights from the data collected to maintain its Right to win. Adobe should focus on every aspect of the data be it making processing it through AI and machine learning to get some insightful analysis or safeguarding the collected data to help companies complying the rules and regulations on sharing the data. Also, Adobe needs to address the gaps related to privacy and security to utilize its core competencies to the fullest. We have concluded that, bolstered by the strengths and performance analysis, data accumulation and analytics align with the core competencies and the jobs to be done. Adobe’s ability to provide end to end platform-based data driven solution to its clients are one of its strengths along with strong partnerships. Data processing and GDPR in the experience record keeping system enhance its strength to provide potential for strategic advantage. But along with that extreme focus on digital marketing makes it less appealing for companies wanting the DXP for other purposes. Adobe needs to restructure its positioning and pricing to maximize the outcome of data gathering and processing for a better strategic outcome and for maintaining its right to win. Performance analysis that depicted the cases of three clients and how successfully Adobe helped them to increase their audience and revenues, is a proof that data processing has helped Adobe and its clients in the past and while flowing with the ongoing trend, it should continue to do so.

With many companies and customers willing to switch to more innovative and next generation of cloud platform, experience record system has a penetrable and addressable market to cater to, increasing its credibility in providing a strategic advantage for Adobe. The buyer utility map provides the areas where data accumulation is going to help Adobe’s clients and their companies. It will increase the convenience in terms of usage, supplements and simplicity in maintenance, hence proving that the ability to draw data and using it for insights can make Adobe’s platform more user-friendly. By this customer-oriented benefit, Adobe gets a huge ground to have a huge strategic impact. From the competitive analysis, we figured out that almost all the competitors are implementing AI and machine learning to provide more personalized experiences. Adobe being the leader, in order to retain its position, should focus more on the seamless experience and the accessibility of its services as their cloud product complexity increases and the integration becomes harder. This provides a great opportunity for data gathering and processing for gaining competitive advantage and helping the business.

Both internal and external analysis depict that there is a huge potential for data analytics to provide a strategic advantage to Adobe. We strongly recommend Adobe to continue innovating and investing in data gathering and processing, while not ignoring the threats and catering them to provide differentiability in the current market.

Recommended Feature for Adobe — Security as a Service

With Adobe focusing on content management, they can expand their breadth of services to other markets and include specific features to those markets. One such feature is security management and Adobe can develop its services to provide their customers with a fully secure space to store and access their data. The platform would provide a threefold advantage in terms of security and limited accessibility to companies looking beyond their regular marketing offerings.

Secure space and AuthenticationThrough this service Adobe can look towards providing an access portal to the client’s data without them worrying about the security. With the ability to make heavy security infrastructures possible, Adobe can use this service to attract clients who want their data confidentiality sustained with leading tools.

Position based accessibility With this system, there will be levels of security and through a class-based clearance, access can be granted to individuals qualifying a certain level only. This is generally required for companies with a deep hierarchical structure where certain information is only for certain bands of employees.

Secure data sharing — With high scrutiny about data accessibility and redirects, sharing information within or among departments becomes an issue with a long chain of clearances to be processed and access to be granted at multiple entry points. In this system, Adobe can handle the same for its clients.

This recommendation addresses the problems associated with threats as mentioned in our analysis and will provide a differential factor giving a competitive advantage to compete with Salesforce especially.

In collaboration with — Anushashna Garg, Aditya Shastry Eranki, Mrunalini Bhattiprolu and Yi-Chen Lee

Note — We were not paid by Adobe or any other organization to write this report. It was a part of our assignment for Competitive Strategy course at Duke University.

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