As organizations get serious about deploying new business models that reinvent their relevance, the technologies empowering those strategies have reached paramount importance with C-suite executives. Digital experience platforms (DXPs) allow companies to engage with customers at scale throughout customer journeys, across channels and personas—while delivering powerful experiences that delight customers. Digital Clarity Group defines a DXP as:
A collection of technologies to orchestrate and manage digital experiences delivered to customers, prospects, partners, citizens, employees, and other stakeholders with whom the organization engages. The DXP delivers digital experiences across the life cycle of customer relationships, from marketing to sales through service. DXP components, such as content management or ecommerce systems, use data to drive and orchestrate the delivery of experiences such as targeting, analytics, and tagging for personalization.
One burning issue that executives face is understanding the type of DXP solution that is best aligned with their business needs and objectives. Organizations have several options depending on their appetite for risk, their in-house resources, and their corporate strategies for software deployments. DXPs can be based upon a single vendor’s end-to-end suite, assembled from best-of-breed components, implemented as a hybrid of those approaches, or developed with in-house and partner resources.
Digital Clarity Group recently conducted primary research to determine: 1) the business models and DXPs companies are embracing, 2) which technologies are essential for DXPs, 3) whether DXPs will be single-vendor end-to-end solutions (homogeneous) or assembled from multiple vendors (heterogeneous), and 4) who primarily drives DXP deployments.
The story emerging from our research is that today’s DXPs are dominated by heterogeneous solutions built upon federated architectures. Furthermore, C-suite executives and IT are leading the decisions about DXP investments and strategies, indicating that at the highest levels, organizations have bought into the notion that great customer experience is fundamental for success.
Among the key findings from the research is that 55% of organizations plan to buy heterogeneous DXPs within 12 months, and that number increases to 66% when including in-house development. (The data is based on an online survey of business, IT, and marketing leaders in 300 organizations across Europe and North America, and interviews with 22 executives in global companies.)
In our interviews, executives cited the following for taking a heterogeneous approach:
- “DX technologies are too broad for a single platform,” Chief customer officer, a global B2B construction company
- “The reality is that there is not one platform that does everything needed for DX,” Director of ebusiness content, a global aerospace company
- “What the research firms talk about is very, very hard and too difficult to accomplish… it will happen but not to the degree that everyone is pitching,” Head of digital innovation and strategy, a European airline
The survey data mirrors these attitudes. Over half of respondents (55%) indicated that they prefer a heterogeneous approach because it’s unrealistic that any one vendor can provide a single platform, given that the DX market is constantly expanding and changing.
The CIO of a global manufacturer shed light on how many CIOs approach DXPs. He equated large suites with the solar system and observed, “If the enterprise software companies have their way, they will be the uber DXP provider. But the future will be a federated environment, not one single DXP but several platforms that together provide digital experiences … Post-modern ERP is becoming less of a single thing; it’s breaking up. CRM is breaking up, too. Sourcing is another example. HR is breaking out of ERP. It’s it like the solar system. [The single solution vendors are] the sun and the solutions breaking out are the planets. They are becoming separate.”
Our research confirmed that DXPs are, in fact, evolving to a federated architecture, as the CIO described. This type of architecture supports interoperability and information sharing between decentralized lines of business (LOBs), IT systems, and applications by coordinating the controlled sharing and exchange of information. Organizations will constitute their platform by assembling those sets of capabilities that are appropriate for their digital experience initiatives – perhaps content, e-commerce, and engagement, for example.
The likelihood that federated architectures will take hold is high, given that CIOs are driving digital experience investments within global organizations. Our research reveals that the C-suite and IT largely drive DXP acquisitions and deployment. 40% of executives said, “DX technology is an integral part of my organization’s strategy, set by the C-suite and involving all business,” while 31% said, “DX technology is primarily an IT issue and should be led and managed by IT.” 16% responded that “DX technology is primarily a marketing and IT issue and should be led and managed by a collaborative initiative involving both marketing and IT.” Only 10% of the respondents said, “DX technology is primarily a marketing issue and should be led and managed by marketing.” This result shows that digital experience has moved out of the marketing organizations and is now acknowledged as central to broader business strategies, goals, and objectives.
DCG’s report on Digital Experience Platforms: Buyer Trends, Preferences, and Strategies provides additional insight for leaders who are looking to understand DXP options and to learn how other organizations have determined the approaches that make sense for their organization. It’s available as a download here.