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One of the biggest questions arising from SAP's $8 billion acquisition of Qualtrics last fall was how SAP would integrate Qualtrics XM applications with its operational business systems. XM is Qualtrics shorthand for experience management.
SAP addressed this question at the recent Sapphire Now 2019 conference, where SAP CEO Bill McDermott touted the benefits of integrating "O data" (operational data) with "X data" (experiential data) for better customer experience management. He stressed that operational and experience data together will help companies understand their customers better, as well as deliver products -- and experiences -- that tap into the experience economy.
In this Q&A, Zig Serafin, president at Qualtrics, discusses how the Qualtrics XM applications will integrate with SAP systems and how, together, they can start to answer the question of why. Serafin came to Qualtrics from Microsoft where he worked on the AI platform that's part of Azure. He joined Qualtrics three years ago and leads the products organization.
Editor's note: This interview was edited for length and clarity.
How do you view the experience economy and SAP's vision of it?
Zig Serafin: [Companies] are realizing that there is truly an experience economy moment taking place in their industries. Some of them are seeing it because there are new entrants coming into their industries, and they're disrupting the way that things worked before. And you see this in almost every industry -- financial services, travel and hospitality, the list goes on. What's common is that the speed at which you're able to actually connect with and understand the mindset of the people that you serve and act on it. The newcomers start with a direct connection to understanding the hearts and minds of the people that they serve. In traditional companies, there's a lot of layers, because of the things that have been built into systems and how things have operated. But everyone is trying to find ways to be much more empathetic, more connected, and more activated by the hearts and minds of the people that they're serving.
How can the Qualtrics platform help companies understand that direct connection?
Serafin: The thing that is acting like a lightning fuel is when you give people the ability to have a highly configurable, programmable system that connects with the operating environment that they're already using. On a call center for instance, you can hook up Qualtrics Customer Experience Management [CustomerXM] as part of the existing call center environment, and within a matter of months, they can start to train and shape the behavior of people that are on the front lines serving the customers. It used to take a year to stand up something like that and study it and understand it. On the digital side of the house -- how you're running your website or how your e-commerce experience works -- within a few days you can be measuring, and then taking action or tuning the way that that digital experience works.
What are some of the benefits of integrating Qualtrics applications with SAP systems?
Serafin: We found that the next generation of where we're going is where you embed these capabilities as part of a day-to-day workflow that you might have around a digital commerce experience. For instance, as part of the supply chain system, as part of the way that you end up servicing your customers, or as part of the way you end up developing new products. The system becomes a part of the state of the product lifecycle management environment.
When it's embedded like that, what kind of information is it gathering?
Serafin: I'll give an example. L.L.Bean is using Qualtrics Product XM [Product Experience], Brand XM [Brand Experience], and Customer XM at the store locations. In Product XM, they constantly have to make supply chain decisions on delivery: what to stock, when and where, what to actually produce. For example, they had a new type of fleece and found the opportunity for demand was for well ahead of what they were expecting. So they can test concepts for certain markets and with certain customer segments, you can better understand who your customers are, you can test the product faster, you can make supply chain decisions faster on what you need, like geography, even by demographics. So that's an example where you're embedding in that type of data, you're embedding in models that can be used for that as part of a lifecycle decision on how you end up delivering something to the marketplace.
What other ways does the integration of the Qualtrics XM platform with SAP systems helps customers in the experience economy?
Serafin: SAP C/4 HANA connects this entire thing under one umbrella. Let's say you've got the ability to understand how you're doing opportunity management, and you know where your customers are dropping off in purchase cycle or consideration cycle, or on the fulfillment side. You know how long it takes to complete an order, or how long it takes to service someone, for instance. What you don't know is what we call the 'why' data: Why things are actually taking place. Or for example, you know certain e-commerce pages are getting less engagement, because you have that operational data. But do you know why? And by the way, the same story is true on the HR side too, with respect to employee lifecycle. You can sit there and do everything from onboarding someone to retire to hire to rewards, all of it is a connected system. But do you know why and what are driving true engagement? That's a whole other part.
What benefits can organizations get from these integrations?
Serafin: By bringing that together, you have a better understanding of people's intent about the buying cycle as part of that commerce cloud. You can better monitor feedback across different touch points; you can do a better job with personalization. But even the most important thing is the action taking -- it can take place on this because you might find something's not well, with the tool department, maybe a particular brand isn't available. It's not just about moving your pixels on the website. So that's an example of how this is coming together.