I may very possibly be the last to blog on the theme of technology trends and predictions for 2012 with every blogger worthy of a following already having done so (and before 2012 actually arrived). But in my role at KANA, this is not something I think about only at New Year. On the contrary, there’s hardly a day that goes by where I’m not on the phone talking to prospective and existing customers about KANA’s strategy for the next 12, 36, or even 60 months. Discussions that always include reference to emerging trends and how KANA plans to contribute or exploit them on behalf of our user community.

So after some debate with two of my esteemed colleagues, KANA vice presidents Vikas Nehru and David Moody, here are five areas that we believe will substantially figure in and shape the Customer Service world in 2012, plus a couple of observations.

1. 2012 will see real convergence of online revenue channels with customer service

At KANA we are calling it “Revenue + Service” and although perhaps not a new concept it’s one that will move to center stage in what is likely to be another tough year economically. It’s time for the Marketing and Online/eBusiness teams to get with and get serious about web customer service. We’ve discussed this at length with Gartner analysts Johan Jacobs and Michael Maoz, and with Forrester’s Kerry Bodine and Bill Band (whose own predictions you can find here) with a good degree of acknowledgement. We believe that prescient organizations will be making their biggest bets here in 2012.

2. 2012 will be the year that Big Data Analytics starts to deliver – because it must

The sheer amount of information now being gathered about the customer experience, such as consumer patterns and citizen activity, is approaching Orwellian levels, and just a short 30 years later than he predicted. The rise of social has exacerbated an already developing desire by both business and government to understand more about the experiences their customers have as they interact with them. Business intelligence offerings for the majority of CRM solutions were simply never intended to parse and analyze such massive amounts of often unstructured data. That’s where Big Data comes in. It should hardly be surprising that at KANA Summit 2011, the KANA Customer Advisory Board (CAB), made up of leaders in both the public and private sector, agreed on the need for a holistic analytics strategy as the number one area that KANA could help them with. Of course, vendors like SAS Institute and IBM and technologies like Hadoop are tackling this very thing already, but expect to hear a lot more about Big Data in 2012 as customer service vendors look to add these capabilities to their offerings.

3. 2012 will see the Local Government Public Sector lead the way in Mobile adoption

It took me longer than most to get my head around the power and potential of mobile technology. There I’ve said it and it’s true; I could often be heard saying “mobile is not yet ready for prime time business.” But in 2011, as far as KANA goes, I was proved absolutely wrong. Mobile devices are rapidly becoming, if not yet principle, then indispensable computing devices, and it is the Public Sector that is leading the way in terms of Government to Citizen mobile customer service. Early government adopters such as City of Boston and North Ayrshire have discovered how resident use of smartphone reporting apps are highlighting issues sooner than previously possible thereby reducing litigation costs, for example. The ability to harness willing citizens in this way will drive further adoption and further innovation in government in 2012. So expect 2012 to be the year when a proliferation of easy to build, easy to use, quick to value and low cost apps, increasingly delivered via the cloud, appear in our space.

4. 2012 will see increased investment in email management as volume continue to increase

Gartner has suggested that, despite the growth of web customer service channels, email response management is still the most widely deployed today at around 82% penetration. It remains the fastest growing channel, and will almost double over the next decade in terms of consumption. This does not surprise us and was a point we made at the “Digital by Default” conference last year. Email becomes even more important as more and more people carry out business online (see prediction #1) as the principle way in which they expect Support to be handled, including secure messaging. Expect to see email response management overhaul initiatives in 2012 as aging offerings struggle to handle the rigors of growing traffic and increasingly burdensome governance, risk and compliance initiatives.

5. 2012 will see Social CRM move from over-hyped to table stakes

The social customer relationship (SCRM) landscape continues to evolve at a pace, and has seen its fair share of consolidation and new entrants over the last twelve months. Social listening, monitoring and text analytics solutions, which once commanded a premium, are now available on-demand at a more realistic price tag. Such activities still live by and large within the realms of Marketing but (as in #1 above) increasingly listening to the voice of the customer must mean a closer relationship between Marketing and Customer Service. In 2012 we at KANA believe that social CRM suites that combine rich, collaborative community platforms and social listening and respond solutions will begin to make the journey back over to “CRM.” Social CRM is great at relationships but poor on process, and the opposite could be said about traditional CRM systems. The coming together of these two complementary areas to improve business processes will do more to deliver return on investment from CRM initiatives than most in 2012.

Observation #1: Continued industry consolidation in 2012 will benefit customers and vendors

In 2011 after a long period beneath the radar, the Customer Service sector witnessed a whole flurry of merger and acquisition activity as the emphasis businesses put on customer service and, more appropriately, service experience management heightened, in what was a tough economy. A number of KANA’s competitors disappeared as part of that process, or rather became very small parts of much larger companies. This consolidation in our space will likely continue into 2012, but why is this a good thing? Well, a focus on any sector is always positive; it results in heightened investment and new innovation. It can provide more streamlined choice and helps with clarity when it comes to investment decisions. KANA carried out some targeted M&A activity of our own in 2011 and expect the focus on our market to provide even greater opportunity for more of the same this year.

Observation #2: Predictions of another tough economic year in 2012 will do little to slow the advance of the Cloud

No ‘technology trends and predictions’ blog can be complete without mentioning the Cloud. We expect nothing less than greater choice and flexibility in deployment models for customers in 2012 as they seek to implement technology on their own terms. Many KANA customers find our SaaS based applications a great way to get started with, for example, a social listening or mobile initiative without significant capital outlay. Other KANA customers, such as those in the financial services sector, are actually moving certain Cloud applications back on premise under the rigors of GRC mandates. Without doubt the benefits of the Cloud are myriad and adoption in the Customer Service sector will continue to progress. But at the end of the day, it shouldn’t be the vendor who dictates your IT operational model, it should be you.

Of course, as is the case with all my posts, the opinions provided here are my own and do not necessarily reflect the opinions, actions or planned actions of KANA Software, Inc.

Happy New Year!

(James Norwood is Chief Marketing Officer, KANA)

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