The Experience Economy — Enterprise Edition.

The Rise of Intelligent Experience Economy.

Recently, on a business trip to Georgia, I visited Panera Bread. It was my first time. Overall, a pretty good experience. Menu, food, ambiance — everything was simple and nice. But something made my visit memorable enough to spark the thought for this article .

As I entered, the digital kiosk was ready to show me the selections, take my order and direct me to take the buzzer. It would alert me to grab my lunch when ready to serve. Clean and responsive UI, crisp and smooth touch display, all added to my pleasant experience of ordering without any assistance.

While the technology isn’t unique, the attention to details made a difference to this customer (me) visiting for the first time.

I left the restaurant with just one thought in my mind — Customer Experience.

Experiences are a distinct economic offering, as different from services as services are from goods.

This is taken from the Harvard Business Review article by Pine and Gilmore in 1998. In this thesis they coined the term, “Experience Economy”.

Next Step: Staging Experiences

Let’s understand this chart.

Extracting commodities is part of the agrarian economy that began thousands of years ago.

With the advancement of technology, the industrial economy era began to make goods (mass production).

Towards the latter half of the twentieth century, in a rather peaceful world, standard of living started growing which enabled the service economy.

Pine and Gilmore wrote,

the next competitive battleground lies in staging experiences.

The nature of offering for these economic distinctions is as follows — “commodities are fungible, goods tangible, services intangible, and experiences memorable.

A company intentionally uses services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event.” (HBR 1998)

Memorable and staged experiences are not new, customers have been getting them in the entertainment and tourism industries. It is the spread of “experience management” across all channels and industries that begins the disruption.

Enterprise Edition

SAP is the leading ERP provider globally. Simply put, the biggest companies on the planet that serve you and I use SAP software to run their businesses. It is what drives the digital economy behind the scenes.

Ever since SAP put bullseye on to dominate the CRM market, neither sides have shown signs of slowing down to deliver the best-in-class product and experience.

But SAP’s ambition goes beyond the CRM market.

Unlike, SAP belongs to a generation of companies prior to SaaS or even internet as a matter of fact, where product capability was prime.

It is no secret, that SAP’s infamous GUI (a desktop application) is an unappealing screen for its end users. While there are no questions on competency, SAPians will nod their heads in agreement on the sub par user-interface and experience.

To tackle this problem, SAP introduced Fiori UX in 2013. Initially, it only supported select functionality and lacked consistency across products. Thousands of hours have been devoted since to bring the best user experience to SAP products. And today, with the announcement of Fiori 3.0, SAP is just closing the gap to deliver an interface close to standard market applications.

Fiori 3.0 offers consistency among all interfaces, integration among the different products and intelligence embedded inside applications.

UX: SAP Fiori 3.0

Only time will tell, if SAP can deliver and keep up with the interface expectations from its customers.

We are also witnessing a great surge in intelligent technologies, at the enterprise and consumer levels. This has elevated the Experience Economy to an Intelligent Experience Economy.

With the proven capabilities of AI and insights from Big Data, enterprises can deliver an enhanced and predictive customer experience. In a Forbes article, Daniel Newman writes — If you want to build brand affinity, give the people what they want.

Essentially, put the customer at the center. Empathize with the end user. Today, we have customer data, and the means to unlock it with Big Data solutions. We now create 2.5 billion gigabytes of data per day (PBS).


SAP’s acquisition of Qualtrics, an experience management company, for $8B in 2018 was seen as a bold statement to announce its entry into Experience Management.

SAP had the essentials —

  1. A strong ERP customer base for the data
  2. Superior user experience in Fiori
  3. Embedded AI and Big Data management tools

Strategic acquisitions of startups Recast.AI (France , conversational AI) and Gigya (Israel, identity management) added to their portfolio.

Finally, the Qualtrics acquisition commenced a new era of enterprise software which puts the customer at its center to deliver an intelligent & memorable customer experience. Qualtrics has become the crown jewel of SAP.

Keeping the CRM market in mind, it might be too early to predict if SAP will win the market over with their vision, or will take it all.

I am reminded of something from a former manager at SAP. Anil, whose suggestions have always been valuable to me, mentioned this while addressing a team meeting. He said — he’s certain of the technical skills of his team, but wanted them to acquire the acumen of a sales representative.

Perhaps what he meant was, perception is reality.

If not today, tomorrow will favor these decisions by enterprises — their bet on XM (experience management). Here’s why — “…80% of customers chose to leave a brand due to poor customer experience. Research from the U.S. Chamber of Commerce indicates that up to 67% of customers switch brands — not due to price or features — but due to customer experience or a perceived lack of attention, personalization, and engagement by the brand.” (Digitalist)


And let’s not forget the millennials. Today’s millennials will be tomorrow’s decision makers and thought leaders. A study showed that 72% of millennials would favor experiences than material items.

We are already witnessing a change in society that demands great and memorable experiences. And this is backed by sociology,

In 1992, German sociologist Gerhard Schulze researched inhabitants of the city of Nürnberg observed a new way of living where basic needs were covered and people merely were striving for a “nice living (“schönes Leben”), experiencing life (“er-leben”). Schulze summarized his findings with the wordings “Experience Society”.

One thing is certain — as customers, there are exciting times ahead!



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