tag:blogger.com,1999:blog-43891147202767367442024-03-05T04:59:24.867+00:00The Customer RevolutionA commentary on customer-centricity and the disruptive technologies that are driving the Customer RevolutionAnonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.comBlogger60125tag:blogger.com,1999:blog-4389114720276736744.post-80684229634853288122018-02-27T16:46:00.001+00:002018-02-27T16:46:17.731+00:00Digital experimentation without industrialization is fruitless<div dir="ltr" style="text-align: left;" trbidi="on">
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Around
five years ago, large companies rushed to set up digital innovation
labs in tech clusters around the world. These would typically have all
the hallmarks of a tech start-up: bean bags and pool tables, “big ideas”
and minimum viable products (MVPs), eco-systems and meet-ups. <br />
<br />
Many companies did little more than experiment (often in highly
controlled laboratory conditions), essentially operating on the
periphery of the core business. When innovations were brought back from
the digital lab and rolled out across the business, progress often
stalled. Business leaders pushed back on new offerings that they feared
might cannibalize existing blockbuster products. Corporate IT struggled
to integrate standalone MVPs into their complex legacy environments, and
CFOs and corporate counsels flagged huge potential risks relating to
cyber breaches, data privacy and regulatory compliance. It was often
easier to press the pause button on a digital innovation than to try and
scale it.<br />
<br />
<strong>The questions are different now</strong><br />
Over the last 5 years or so, I’ve discerned a shift in the types of
questions clients ask me about digital transformation, especially from
those outside the sectors that have been living and breathing digital
disruption for the last decade (including telecommunications, media,
consumer technology and retail).<br />
<br />
Sectors that have yet to see such a radical re-writing of the value
chain (such as healthcare, life sciences, insurance and automotive) are
now sensing that change is coming much faster than expected. They want
to know “How?” and “What?” instead of just the “Why?”<br />
<br />
I believe the “Why?” is reasonably clear. Boards across almost every
sector accept that the fourth industrial revolution will re-write the
value chain of their industries, creating both opportunities and
threats. Simply digitalizing the front end of yesterday’s business is
not an effective response and guarantees little more than a high burn
rate of resource.<br />
<br />
Today’s questions around “How & What” are more about pace and execution:<br />
- How do we move faster?<br />
- How do we cope with the co-existence of two business models?<br />
- How do we stop <strong><em>doing</em></strong> digital and start <strong><em>being</em></strong> digital?<br />
- Should we buy, build or joint-venture to accelerate our digital transformation?<br />
- How do we stop killing digital innovation and start industrializing successes?<br />
<br />
<strong>The balance between separation and integration is critical </strong><br />
A truly effective digital transformation program impacts almost every
aspect of the organization, from the business model to the end-to-end
operating model. With such a huge challenge facing them, many
organizations are tempted to start from scratch, and indeed, the
response of many telcos in the early days of digital re-invention was to
set up new mobile virtual network operators (MVNOs) and digital-first
challenger brands.<br />
<br />
In some cases, this could be a highly effective response to try and
move as fast as the market is changing, without being constrained by
legacy issues. However, it does little to accelerate the transformation
of the existing company.<br />
<br />
So, how does a large corporate that’s undergoing a digital
transformation make the leap from stand-alone digital innovation to
industrialized scale? For this to work, the balance between separation
and integration is critical. A digital lab needs to engender a certain
degree of separation in order to have the freedom to experiment; but
experimentation without industrialization achieves nothing. <br />
Today, great ideas for the future digital re-invention of the company
can come from anywhere — from a lab in a tech cluster to a front line
customer-facing employee. Innovation, can’t simply be outsourced to one
part of the business; rather, we need to build a culture of innovation
across the entire business.<br />
<br />
<strong>Exploring digital from every angle</strong><br />
Similarly, it’s no longer worth building MVPs in complete isolation
from the realities of integration and industrialization. Increasingly, I
see lawyers and corporate IT teams getting involved earlier in a design
sprint, shifting the conversation from, “We’ve built this MVP, can you
approve it from a legal/IT perspective?” to “We’re starting a new design
sprint, how can you help us identify and navigate the legal and
technology risks that we might come up against?” The former typically
leads to rejection; the latter to earlier, better conversations.<br />
<br />
As we move into an increasingly connected world – in which combining
the internet of things (IoT), artificial intelligence (AI) and robotics
will drive smart automation across the whole enterprise – the challenge
for most large companies will not be around experimentation; <a href="https://betterworkingworld.ey.com/digital/18-for-18-digital-resolutions-for-business-leaders" rel="nofollow noopener" target="_blank">it will be focused on transitioning from successful experimentation to industrialization and scale.</a><br />
<br />
The central battleground of a digital transformation program is
focused around how to drive re-invention and infusion of digital across
the whole enterprise. It’s what EY refers to as looking at <a href="http://www.ey.com/gl/en/services/digital" rel="nofollow noopener" target="_blank">digital from every angle</a>.
From the back end, through the muck-in-the middle, and to the front end
– all parts of a business need to be involved in the transformation
process. That’s been clear for some time among the “post-disrupted”
industries. What’s encouraging today is that it’s also emerging as a key
theme in the “pre-disrupted” industries.<br />
<br />
<em>From 26 February to 1 March, global leaders will gather at Mobile
World Congress under the theme of “Creating a Better Future.” This
insight is part of a series addressing how to seize the upside of
disruption in the face of rapid change. To read more visit ey.com/mwc.</em></div>
</div>
<a class="reader-flag-content" data-control-name="report" href="https://www.linkedin.com/pulse/digital-experimentation-without-industrialization-laurence-buchanan/?published=t#">
</a></div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-62504265868161860842016-07-20T15:28:00.000+01:002016-07-20T15:31:13.487+01:00Key questions for boards in the fourth industrial revolution<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">A
few months ago I read </span><a href="http://www.youtube.com/watch?v=6ZOkoRuV1R0&sns=em"><span style="font-size: 11pt;">“The Fourth
Industrial Revolution”</span></a><span style="color: black; font-size: 11pt;"> by Klauss Schwabb, which seemed to frame the
debate at the World Economic Forum in Davos. I was struck by the power of the
language used at the WEF:</span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt;">
<span style="font-family: inherit;"><i style="mso-bidi-font-style: normal;"><span style="color: black; font-size: 11pt;">“We stand
on the brink of a technological revolution that will fundamentally alter the
way we live, work, and relate to one another. In its scale, scope, and
complexity, the transformation will be unlike anything humankind has
experienced before”</span></i></span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">A
few weeks ago I listened to George Colony, the CEO of Forrester describe the
next decade as one that would create an <i style="mso-bidi-font-style: normal;">“existential
crisis for every company on the planet”.<span style="mso-spacerun: yes;"> </span></i></span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">More
recently, I had the pleasure of facilitating a roundtable debate between 20
board directors from 20 of the largest companies around the world on the topic
of how boards should be responding to digital disruption. A few thoughts and
themes struck me…</span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">The
last decade has arguably seen the greatest and most compressed degree of
technology driven change that the world has ever seen. However, far greater
change is likely to happen in the next ten years as many technologies, from
diverse fields hit their critical inflection points at the same time –
artificial intelligence, advanced robotics, blockchain, genomics, nano tech,
drones etc. <span style="mso-spacerun: yes;"> </span>These technologies are
combining together to create Cambrian-like explosions in industry after
industry, creating profound questions both for societies, companies and their
boards. </span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">Some
of the market forecasts are alarming. At the current run rate 75% of the
companies in the S&P 500 in 2027, will be displaced by new entrants. By
2030, 2 billion jobs will disappear (that’s roughly 50% of all the jobs on
the planet) as a result of technology advances.</span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">Companies
in every sector face a multitude of challenges, up and down their value chain:</span><span style="color: #010101; font-size: 9pt;"></span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">Competition from both sides - new start-ups with radically
different business and operating models as well as mega-vendors entering and
disrupting industry after industry</span><span style="color: #010101; font-size: 9pt;"></span></span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">Dramatically rising customer expectations</span><span style="color: #010101; font-size: 9pt;"></span></span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">Very high levels of technical debt and digital wastage as buyers
jump to new technology fads and tactics</span><span style="color: #010101; font-size: 9pt;"></span></span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">A constant and relentless onslaught from cyber attackers</span><span style="color: #010101; font-size: 9pt;"></span></span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">Significant risks of legal and regulatory breaches as companies
operate within an ever-changing patchwork quilt of international standards and
regulations</span><span style="color: #010101; font-size: 9pt;"></span></span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">Huge pressure on traditional IT systems, supply chains, organisational
structures, skills & cultures, ways of working etc that were simply never
designed to cope with the speed of change that we see today</span></span></div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">On
the flip side, the same forces driving tech disruption also offer companies game-changing
opportunities:</span><span style="color: #010101; font-size: 9pt;"></span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">The opportunity to re-invent business models, for example moving
from products to services as companies like GE have done with GE Digital</span><span style="color: #010101; font-size: 9pt;"></span></span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">The potential to achieve exponential growth in new services –
Pokemon Go anyone?</span><span style="color: #010101; font-size: 9pt;"></span></span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">The ability to reimagine experiences, operations and supply chains
– Aprecia Pharmaceuticals recently won regulatory approval to </span><a href="https://www.youtube.com/watch?v=0mv7W9IvT9g"><span style="font-size: 11pt;">3D print one of their drugs</span></a><span style="color: black; font-size: 11pt;">, giving
them to potential to re-write the entire way they think about manufacturing and
distribution.</span><span style="color: #010101; font-size: 9pt;"></span></span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="color: #010101; font-size: 9pt;"><span style="mso-list: Ignore;">·<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span><span style="color: black; font-size: 11pt;">The opportunity to capture, analyse and act on vast volumes of
structured and unstructured data, providing insights into competitors, customer
expectations and experiences, operations etc</span></span></div>
<div style="margin-left: 36pt; text-indent: -18pt;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">Given
the broad range of opportunities and threats above, it should be clear that doing
nothing to consider the impact of technology-driven disruption is simply not an
option. That has been clear in some industries for many years, however, it
should now be clear in every industry. However, a question that I don’t
believed has received enough attention is what role should the board play? One
non-exec recently commented to me that good board members start by asking
better questions so here are some starting questions for boards in the fourth
industrial revolution to consider:</span></span><br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraph" style="margin-left: 18pt; text-align: left; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span>Do we have the right composition in the board to
be able to navigate the fourth industrial revolution?</span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">Arguably
the board’s response to the fourth industrial revolution needs to start with
composition. A recent report from the CBI (Confederation of British Industry)
suggested that companies should both appoint a digital native board member and
also improve digital awareness of all board members. Some boards have clearly
made strides to improve diversity of skill-sets. Starbucks (Clara Shih from Hearsay
Social), Walmart (Kevin Systrum (instagram and Yahoo), Tim Hortons (Chris
O'Neill (Google Canada) have all appointed digital board members. A Private
Equity company in Hong Kong called Deep Ventures even appointed an </span><a href="http://www.psfk.com/2014/06/artificial-intelligence-board-of-directors.html"><span style="font-size: 11pt;">Artificial
Intelligence machine</span></a><span style="color: black; font-size: 11pt;"> to their board. Yet, according to a recent study by Russell
Reynolds Associates 80% of 300 large, global companies did not have a single
director with substantial digital experience. Today, boards need diversity (in
every sense of word) to make sense of the extreme pressures on the company
created by technology, regulation, activist shareholders, labour unions etc.</span><span style="color: black;"></span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraphCxSpFirst" style="margin-left: 18pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span>How will the company’s purpose, vision and
strategy need to evolve for the digital age?</span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0cm;">
<span style="font-family: inherit;">A
company’s response to the fourth industrial revolution needs to begin with its
purpose. Without purpose and vision there is no context to make prioritisation
decisions on digital investments and almost inevitably executives will focus on
digitising the business of today, rather than re-inventing the business for
tomorrow. Companies will focus on creating and executing digital strategies,
rather than a business strategy for a digital age. In years past, the role of
the board may have been to simply provide an annual review and endorsement of
the strategy created by management. Today, companies should be considering how the
strategy process needs to evolve and how they can better leverage the knowledge
and expertise in their boards for competitive advantage. In turn, boards need
to challenge and hold the company true to its purpose.</span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 18pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span>What risks and opportunities does technology
create for the company up and down the value chain?</span></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 18pt; text-indent: -18pt;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-family: inherit;"><span style="color: black; font-size: 11pt;">Digital
leaders think broadly about the impacts of new, disruptive technologies from
front, middle to back office. One board member recently told me that his
company seemed obsessed with spending money on “front end sizzle”, but were not
taking the easy value that could be created by driving efficiency through
automation within their operations. Digital is a portfolio play (Sustaining,
Adjacent, Disruptive), rather than a race to win digital marketing awards. The
portfolio of one company will vary considerably to the next, but each should
have a portfolio and the board should play a critical role in determining the
balance of that portfolio and holding the executive team to account.</span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraphCxSpFirst" style="margin-left: 18pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">4.<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span>How quickly and aggressively do we want to
execute?</span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0cm;">
<span style="font-family: inherit;">Several
companies I work with can see a future where the company’s business model looks
very different to today, but they are struggling with how to get there.
Consider the Automotive Company renting fleets of autonomous driving vehicles
to city P2P car sharing schemes, or the Health Insurance Company who can
predict and prevent health conditions based on digital data. But, many of these
companies have incredibly profitable businesses today, and, in many cases
technology has not yet reached the mass adoption needed for radically new
business models to succeed. A key question for boards therefore is the extent
to which they wish to disrupt the current business and how management will cope
with the transition from old to new.</span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 18pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">5.<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span>How are we building the right skills and talent
to manage the transition?</span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 0cm;">
<span style="font-family: inherit;">Talent,
not technology, will arguably be the most difficult battleground for the next
decade. Already we face critical skills shortages in areas like cyber and new
technologies. In addition, as digital increasingly becomes interwoven into the
fabric of the business, every role (from CEO, CIO and CMO to CFO, COO) needs to
be up-skilled for a digital age. Many executive teams in industries that have
not yet experienced significant disruption lack real experience of navigating
the challenges created by disruptive technology.</span></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 18pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">6.<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span>How will we measure management on success?</span></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 18pt; text-indent: -18pt;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoNormal">
<span style="font-family: inherit;">Boards need to ensure that they are holding management
accountable for the right things. Unfortunately there is a significant danger
with digital that companies will measure the wrong things (typically clicks
& likes). Boards need to challenge their executive teams to show more
tangible progress, by focussing on e.g. the success of the new business model,
the extent to which the company is fulfilling its purpose, the company’s
readiness for their new business model, cyber attacks, talent etc. Arguably, if
digital is infused in a company then digital should enhance every dimension of
the balanced scorecard, rather than create a new set of metrics.</span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoListParagraph" style="margin-left: 18pt; text-indent: -18pt;">
<span style="font-family: inherit;"><span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">7.<span style="font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-size: 7pt; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;">
</span></span></span>What are the legal and ethical issues arising
from our investments in technology?</span></div>
<div class="MsoListParagraph" style="margin-left: 18pt; text-indent: -18pt;">
<br /></div>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div class="MsoNormal">
<span style="font-family: inherit;">The Audit Committee chair in particular has responsibility
to consider legal and ethical risks for the board. Unfortunately disruptive
technologies will create many challenges in this space. Consider, for example,
an automotive company moving towards “lights-out” operations and autonomous
driving vehicles. As technology displaces jobs, the board will have to consider
the social implications. As AI technology increasingly takes decisioning away
from human drivers, companies will have to consider what happens when
technology gets things wrong. If a car crashes, how will it minimise the damage
it causes and who will ultimately be to blame when things go wrong? </span></div>
<div class="MsoNormal">
<br /></div>
<div style="text-align: left;">
<span style="font-family: inherit;">Of course there are many more questions that boards need to
consider, but hopefully the above offer some suggestions to getting started.
Feel free to reach out to me to suggest more!</span></div>
</div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-10883103018550169862015-11-02T18:25:00.002+00:002015-11-02T18:25:55.381+00:00We've barely begun<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfLeVqRBZ-EMYweCWmoERbFkXzZ3d1ztmBxDSoSYeGZBgBR1lTudIGhR0Gpa5v-LyOHLHe2VG729jwjj9IlmFD_ESShwPcfvayGsMIERvLRZpI-ZbSYx4jJ4nj2_dehhOhh-SmxYjdPAlX/s1600/Copy+of+iStock_London_Medium.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="123" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjfLeVqRBZ-EMYweCWmoERbFkXzZ3d1ztmBxDSoSYeGZBgBR1lTudIGhR0Gpa5v-LyOHLHe2VG729jwjj9IlmFD_ESShwPcfvayGsMIERvLRZpI-ZbSYx4jJ4nj2_dehhOhh-SmxYjdPAlX/s200/Copy+of+iStock_London_Medium.jpg" width="200" /></a></div>
<div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Despite 30 years of digitizing analogue information and
connecting devices to networks; despite the obvious explosion of eCommerce,
mobile, social media; despite the massive disruption to the music industry,
newspapers, books, retail, advertising; the digital technology revolution has
barely begun.</span></span></div>
<span style="font-size: small;">
</span><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<br /></div>
<span style="font-size: small;">
</span><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">According to Cisco's former CTO, Padmasree Warrior, we've only
reached <a href="http://www.mckinsey.com/insights/high_tech_telecoms_internet/connecting_everything_a_conversation_with_ciscos_padmasree_warrior">1%
of the potential connectivity</a> that we will see in the next decade. The
exponential growth in connectivity will be driven in part by connecting the
remaining 40-50% of the world's population who today do not have access to
broadband (most of the technology giants have ambitious programs in place to make
this happen via <a href="http://www.businessinsider.com/ap-googles-internet-beaming-balloons-to-take-off-in-indonesia-2015-10?_ga=1.183300134.1434731642.1446481580&IR=T">internet
balloons</a> or <a href="http://www.techinsider.io/facebook-emerging-markets-strategy-2015-10">solar
powered drones</a>). But the real explosion in connectivity will come through
the embedding of sensors, chips and SIM cards into everyday objects – things we
wear, things in our home, our infrastructure, factories, machines, buildings,
cities; even a <a href="https://www.youtube.com/watch?v=Bv0SiX_yzws">bottle of
beer</a> can now be connected.</span></span></div>
<span style="font-size: small;">
</span><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<br /></div>
<span style="font-size: small;">
</span><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Connectivity on its own is not particularly disruptive, but the
combination of the explosion of connectivity with wave upon wave of new
technology, (including artificial intelligence, robotics, 3D printing,
blockchain etc) will transform previously dumb products into smart, connected
products and previously isolated “things” into nodes within smart,
self-learning networks. A connected thermostat that previously offered only remote
control access via a mobile device, may be transformed into a device that
optimises energy consumption and group-buys energy on behalf of a collective. A
medical device that checks blood pressure, may be transformed into a diagnostic
device that combines multiple sources of data and compares health data with
millions of users. Cars may be transformed from metal boxes on wheels into smart
fleets of autonomous driving taxis.</span></span></div>
<span style="font-size: small;">
</span><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<br /></div>
<span style="font-size: small;">
</span><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Today the speed of change is uncontrollable and unfathomable to most
businesses. Today a new technology can reach a critical mass of 50m users in
just 35 days. However, what’s both frightening and exciting in equal measure is
just how nascent some of these developments still are and how much disruption
is yet to occur.</span></span></div>
<span style="font-size: small;">
</span><br />
<ul style="text-align: left;">
<li><span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";"><span><span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="color: black; font-family: "Tahoma","sans-serif";">Within Healthcare - Genomics
England aims to <a href="http://www.genomicsengland.co.uk/the-100000-genomes-project/">sequence 100,000
genomes</a>, which would create 21 Petabytes of valuable data. A huge step
forwards for medical science but still only 0.15% of the UK population.</span></span></li>
<li><span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";"><span><span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="color: black; font-family: "Tahoma","sans-serif";">Within Automotive – we’ve already seen Tesla release a software update
containing the capability for level 2 auto-pilot, but <a href="http://press.ihs.com/press-release/automotive/self-driving-cars-moving-industrys-drivers-seat">IHS
Automotive</a> estimate that it will be more like 2030, before we see
self-driving only cars on our roads.</span></span></li>
<li><span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";"><span><span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="color: black; font-family: "Tahoma","sans-serif";">Within energy, there are currently around 2 million smart meters already
installed in UK households. Smart energy GB aims to see connect <a href="http://www.smartenergygb.org/national-rollout">26 million households by
2020</a>, so today we’ve reached less than 10% penetration of smart meters.</span></span></li>
<li><span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";"><span><span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="color: black; font-family: "Tahoma","sans-serif";">According to Canalys, the Global 3D printing market was $3,8bn in 2014,
but is set to grow to <a href="http://www.canalys.com/newsroom/3d-printing-market-grow-us162-billion-2018">$16.2bn
by 2018</a>. Today, the vast majority of people and businesses do not yet use a
3D printer.</span></span></li>
<li><span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";"><span><span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="color: black; font-family: "Tahoma","sans-serif";">A slightly more advanced market (but one with an equally long way to go)
is the industrial robotics market, where <a href="http://www.themanufacturer.com/articles/global-industrial-robotics-market-set-to-rise-to-41-17bn-by-2020/">nanorobots
may fuel the next wave of growth</a>. However, the consumer robotics market is
set to grow <a href="http://uk.businessinsider.com/growth-statistics-for-robots-market-2015-2?r=US&IR=T">7
times faster</a> by 2019.</span></span></li>
<li><span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";"><span><span style="font-family: "Times New Roman"; font-feature-settings: normal; font-kerning: auto; font-language-override: normal; font-size-adjust: none; font-stretch: normal; font-style: normal; font-synthesis: weight style; font-variant: normal; font-weight: normal; line-height: normal;"></span></span></span><span style="color: black; font-family: "Tahoma","sans-serif";">After "60 years of
false starts", the Artificial Intelligence market also looks set for exponential
growth. <a href="http://www.marketwatch.com/story/artificial-intelligence-for-enterprise-applications-to-reach-111-billion-in-market-value-by-2024-according-to-tractica-2015-04-23">Tractica
estimate growth</a> from a surprisingly low $202.5m in 2015 to $11.1bn by 2024</span></span></li>
</ul>
<span style="font-size: small;">
</span><br />
<div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">The combinations of these technology-driven developments will impact
every company in every industry sector. Companies that have previously only
digitized their front end web sites and apps, will see impact up and down the
value chain. If every car is connected and autonomous, will motor insurance be
needed? Will consumers still buy cars or will cities buy them under peer to
peer schemes? If every aspect of my health and wellbeing is connected, how will
my health insurance policy change? How will the healthcare system change from treatment
to prevention? How will the pharma sector shift from selling pills to delivering
outcomes? If robots are set to take <a href="http://www.bbc.co.uk/news/technology-34066941">35% of UK jobs</a>, what
new careers will emerge? If 3D printing significantly reduces customs and
excise duties, how will the tax systems around the world respond? Moreover, if
we are already <a href="http://www.scmagazineuk.com/cyber-security-skills-gap-could-take-20-years-to-bridge/article/386327/">20
years behind</a> the skills needed in the market today for cyber security, what
on earth will the deficit look like when we reach 50, 70, 90% connectivity?</span></span></div>
<span style="font-size: small;">
</span><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<br /></div>
<span style="font-size: small;">
</span><div class="MsoNormal" style="line-height: normal; margin-bottom: 0.0001pt;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">The previous decade of technology-driven disruption has already brought <span> </span>profound change, but things have barely
started. Today the questions are getting more and more interesting.</span></span></div>
</div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-90306069859197662712015-07-27T17:45:00.000+01:002015-07-27T17:45:15.065+01:00Trust will make or break the equation for smart connected products<div dir="ltr" style="text-align: left;" trbidi="on">
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUbhzFsHFCnXhDywvwCfddpEAvkKDBGf4dzefVPsmbcccW38sZjUY5jzCEADf0dC0dCr9kjQte9ynI1f4FklCB4AFcHOrri4OiEbcmWrQDEz6byrruCNPS-zCQ_B8Bbyos78_bnoCdXVh3/s1600/iStock_000004357489XSmall.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgUbhzFsHFCnXhDywvwCfddpEAvkKDBGf4dzefVPsmbcccW38sZjUY5jzCEADf0dC0dCr9kjQte9ynI1f4FklCB4AFcHOrri4OiEbcmWrQDEz6byrruCNPS-zCQ_B8Bbyos78_bnoCdXVh3/s200/iStock_000004357489XSmall.jpg" width="200" /></a></div>
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Over
the last few years, previously dumb physical products have rushed to add
connectivity and online services to their offerings. Product designers of
everything from <a href="http://www.ge.com/thegeshow/docs/ge_ivhm_brochure.pdf">jet
engines</a> to <a href="http://www.babolat.co.uk/product/tennis/racket/babolat-play-pure-drive-102188">tennis
rackets</a>, <a href="http://www.bbc.co.uk/news/technology-25771907">contact
lenses</a> to <a href="http://www.engadget.com/2015/07/09/bp-oil-well-ge-predix-software/">oil
rigs</a> and even <a href="https://www.youtube.com/watch?v=Bv0SiX_yzws">beer
bottles</a> have hacked their own products, embedding chips and sensors into
them.</span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="orphans: 2; widows: 2; word-spacing: 0px;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Despite the seemingly daily
release of new, smart, connected products, this trend has barely begun. Cisco's
CTO, <a href="http://www.mckinsey.com/insights/high_tech_telecoms_internet/connecting_everything_a_conversation_with_ciscos_padmasree_warrior">Padmasree
Warrior</a> estimates that we have reached just 1% of things that will be
connected over the next decade. At the start of mega-trend it's worth thinking
about a simple equation to drive success.</span></span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="orphans: 2; widows: 2; word-spacing: 0px;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">SCP = (CJ x C x N<sup>2 </sup>x
AI) x T </span></span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">OR
Smart connected product success = find a killer answer to Customer Jobs multiply
by Connectivity, Networks, Networks of Networks, Artificial Intelligence and then
by Trust.</span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">The
first step in the equation is having a killer answer to a customer job.
Ultimately I suspect many connected products will fail because they simply
won't deliver enough value to users to be viable – do we really need to control
heating in our insoles?. Smart, connected products need to first help a
customer complete the job they are trying to complete faster, cheaper, better
OR by creating significant new value.</span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="orphans: 2; widows: 2; word-spacing: 0px;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Once we've identified the job
that the customer is trying to do and the way in which the smart connected
product can create value, Connectivity then becomes the second element of the
equation. The embedding of a SIM card, chip, beacon or sensor opens up a world
of possibility for users to interact with their product, gaining information
and insight or allowing a remote control function. However, many smart
connected products stop here. They offer simple connectivity to allow customers
to, for example, remote control their central heating but little more… At this
stage of the equation a great deal of potential value is left on the table.</span></span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="orphans: 2; widows: 2; word-spacing: 0px;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">In order to unlock additional
value, it's worth thinking about networks and the value of the data contained
within them. A connected fitness monitor, thermostat or jet engine is
fine, but one that connects with a broader network is able to release far
greater value, allowing users to generate insight from comparative benchmarks
e.g. engine or fitness performance against peers. Most fitness monitors do this
well, allowing users to compete against both their friends and other users of
the network.</span></span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="orphans: 2; widows: 2; word-spacing: 0px;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Connecting multiple networks can
unlock exponential value. For example, connecting a network of thermostats to
networks containing electrical appliances, weather forecasts, energy prices,
carbon emissions, pollution levels etc gives users far more than just a remote
control for their thermostat. Furthermore, by adding artificial intelligence,
products can become genuinely smart. Picture the smart thermostat plugged into
a network of thermostats to group buy energy based on an algorithm that
predicted price rises and discounts, and worked out exactly when to power
appliances around the home based on their energy consumption.</span></span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="orphans: 2; widows: 2; word-spacing: 0px;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">The final element of the
equation, however, is arguably both the most important as well as the most
overlooked. Trust is something that can take years to build up, but can be lost
in an instant through a cyber attack, a data privacy breach or an ethics
breach. Once it is lost a negative trust score is disastrous and renders the
preceding equation entirely worthless. </span></span></div>
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Many
companies currently investing in building smart, connected products fail to
recognise that their trust score is already a negative one. Through years of
mistreating customers and failing to build relationships, they arguably have
little chance of succeeding without addressing their trust deficit. Others are sacrificing the trust equity that they
have built up by launching new connected products with nothing like enough
thought and attention given to cyber security and no clear policies on data
usage, sharing or ethics. In the last few weeks alone we have seen cars, planes
and home appliances all hacked and taken over by either friendly or unfriendly
hackers.</span></span><br />
<br />
<div style="text-align: left;">
</div>
<div style="text-align: left;">
</div>
<div style="orphans: 2; widows: 2; word-spacing: 0px;">
<span style="font-size: small;"><span style="color: black; font-family: "Tahoma","sans-serif";">Without question, smart,
connected products offer companies the potential for radical innovation and disruption.
Entire business models and propositions can be re-written. But success rests
not only the attention given to innovation around customer jobs, connectivity,
networks and AI, but also on Trust. Without trust, a smart, connected product
is nothing but a ticking time bomb for the share price.</span></span></div>
</div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-27826168523086805082014-07-09T14:09:00.001+01:002014-07-09T14:09:10.055+01:00The Chief Digital Officer is dead (or at least should be)<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinCGWGU1wSJcGOZZcRRJQ3yQE0WrD4BubGJFzqNHgdii16QRzdwwkIeck2ZXGeAJWyBntyHBi_qX5dTEAWIpFRbzEWug9bqT72wKoyyOQT8tYQ1iXNkcOKO6q1dgCFkNFDStV-qiBj-lZh/s1600/iStock_000013188123XSmall.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEinCGWGU1wSJcGOZZcRRJQ3yQE0WrD4BubGJFzqNHgdii16QRzdwwkIeck2ZXGeAJWyBntyHBi_qX5dTEAWIpFRbzEWug9bqT72wKoyyOQT8tYQ1iXNkcOKO6q1dgCFkNFDStV-qiBj-lZh/s1600/iStock_000013188123XSmall.jpg" height="150" width="200" /></a></div>
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Felix sat back and congratulated himself on a job well done.
He had been under pressure from activist investors telling him that he wasn’t
doing enough in digital, so poaching Clarissa from a silicon valley-based tech
giant was a real coup. She was a star performer – Stanford educated and a host
of experiences working for tech start-ups, the last of which was acquired by
Digital Megavendor inc. Felex knew he had to be seen as placing a bet on
digital, but in his heart of hearts he still struggled to see the relevance to
his logistics operations, his heavy machinery and some of the clients he worked
with who still saw digital as something for their teenagers. As Chief Digital Officer, Clarissa would
take care of digital. She would free up valuable time for the c-suite to get on
with their real jobs and her appointment may just bump up the share price.<o:p></o:p></div>
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Clarissa joined with high expectations. Felix had made some
pretty impressive statements about wanting to place digital at the heart of the
company and transform the company by learning from the very best of the digital
leaders. She was impressed with his drive and with the fact that whilst he
clearly didn’t really understand digital, he wanted to hire a change agent to lead
the company through this period of disruption.<o:p></o:p></div>
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A few months into her role, it dawned on Clarissa that her
role was simply not set up for success. A host of powerful middle managers and
even the CIO just didn’t seem to get it. They were so entrenched in their day
jobs and fighting fires that she was never given the face time or the support that
she needed. The budget and headcount that Felex had promised her had also
failed to materialise, following disappointing quarterly results and a new
drive to cut costs and maintain margin. In short she had a weak mandate and no
real resources to get things done.<o:p></o:p></div>
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Clarissa’s story is certainly not indicative of every Chief
Digital Officers role. Some CDOs are empowered change agents, revitalising and
re-imagining the companies that they work for and where that is the case I am
fully supportive of the role. But the danger I see in the rush towards creating
a Chief Digital officer role is that in some organisations the role is either a
parking lot to park all of the challenges that no one else wants to deal with,
or a vanity title with little ability to drive real change.<o:p></o:p></div>
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The impact of digital
to an organisation is top to bottom – from strategy to customer engagement,
operations, risk and tax. Digital should therefore be everyone’s job. If the
role of the CDO is to incubate and infuse digital thinking and new ways of working across the
company then the mark of success should be when the role is no longer needed.<o:p></o:p></div>
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Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-77177725662930004402014-03-28T13:30:00.000+00:002014-03-28T17:26:45.904+00:0010 bumps in the road of a digital transformation<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisV-DDgJ-bOtDuPd4ArElVETJz9AcqDV3mluMXGL8pLub5_96_LqjlJPxSenRBRq8MpNRvvRohZjWSjzWshh8krWdn83FaR31nBzvttC5pK1FlG88NxR1dHUyY65hw8rd1UJDdcv9N5vMy/s1600/istock+Storm+clouds+x+smalll.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEisV-DDgJ-bOtDuPd4ArElVETJz9AcqDV3mluMXGL8pLub5_96_LqjlJPxSenRBRq8MpNRvvRohZjWSjzWshh8krWdn83FaR31nBzvttC5pK1FlG88NxR1dHUyY65hw8rd1UJDdcv9N5vMy/s1600/istock+Storm+clouds+x+smalll.jpg" height="132" width="200" /></a></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">So your CEO is now enthused by digital transformation? You have
a new head of digital, a clear vision and strategy for how to digitise and
transform different aspects of your business (from your business model and customer
interactions to your supply chain and operations). You’re taking
customer-centricity seriously, consuming computing power from the cloud, building
in sprints, failing fast, iterating; following everything that the web
companies are doing. <o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">Unfortunately success is far from guaranteed. There will be
a number of bumps along the road ahead... some of them obvious, some of them
less so. Let me give you a quick flavour of 10 of the challenges that you
should at least be thinking about:<o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">1. Changing expectations and lack of exec alignment
– I worked with a client recently and did a quick and unscientific survey of
their exec. Around a third wanted to be extremely disruptive and innovative
with digital, a third wanted to raise the bar and get to the level of their
closest competitor, a third simply wanted to do the basics and nothing else. It
goes without saying but in any major program exec alignment is crucial. In
major digital programs, this seems to be even more the case due to the speed at
which new technology, consumer expectations and market dynamics are changing
and vast differences in what can be achieved (see my post on </span><a href="http://thecustomerevolution.blogspot.co.uk/2013/03/digital-channel-shift-vs-digital.html" style="text-indent: -18pt;">“digital
channel shift vs digital paradigm shift”</a><span style="text-indent: -18pt;">).</span></span></div>
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<span style="text-indent: -18pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">2. Consumer apathy / consumer backlash – if you
build it, they might not come. Worst still, they might react angrily. Countless,
well-meaning digital PR programs have provoked consumer rage from fury over </span><a href="http://www.theguardian.com/money/2013/oct/17/british-gas-backlash-price-hike-energy-bills" style="text-indent: -18pt;">utilities
bills</a><span style="text-indent: -18pt;"> at a UK Utility, to </span><a href="http://www.marketingmagazine.co.uk/article/1150951/waitrose-twitter-campaign-hijacked-upper-class-jibes" style="text-indent: -18pt;">“upper
class jibes”</a><span style="text-indent: -18pt;"> at Waitrose to </span><span style="text-indent: -18pt;"> </span><span style="text-indent: -18pt;">anger at
</span><a href="http://www.forbes.com/sites/theyec/2011/12/28/5-business-lessons-from-the-netflix-pricing-debacle/" style="text-indent: -18pt;">changing
pricing</a><span style="text-indent: -18pt;"> at Netflix. Simply digitising content and blasting it out to social
networks and apps is a sure-fire way to wasting your investment. Building
customer attention let alone engagement is difficult. It’s essential to
maintain a razor sharp focus on customer needs and the journeys that they go
through. These can be used as a compass to guide investment decisions and focus
during a digital transformation program.</span></span></div>
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<span style="text-indent: -18pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">3. Regulatory changes – it’s clear that the
regulatory world is desperately trying to catch up with the digital world. Topics
like privacy, use of data, security of personal information, misleading
advertising and even new business models are under attack from governments and regulators
worldwide. In the US, the New Jersey Motor Vehicle Commission recently voted to
</span><a href="http://www.forbes.com/sites/michelinemaynard/2014/03/11/new-jersey-to-tesla-youre-outta-here/" style="text-indent: -18pt;">ban
the direct sales of vehicles in the state</a><span style="text-indent: -18pt;">. In Europe, the European
Commission are harmonising </span><a href="http://en.wikipedia.org/wiki/General_Data_Protection_Regulation" style="text-indent: -18pt;">data
protection laws</a><span style="text-indent: -18pt;"> impacting all companies processing the personal data of EU
citizens and calling for fines of up to 5% of global group turnover for major
data breaches. That cool, funky app that was built in a garage by a couple of creatives
had better have thought through data and privacy implications! Brazil also recently passed a <a href="http://www.bbc.co.uk/news/blogs-news-from-elsewhere-26771713">bill of rights</a> for internet users.</span></span></div>
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<span style="text-indent: -18pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">4. Tax – now I admit that if you get a group of digital professionals together then tax is unlikely to be top of their list of topics to discuss (!). But most tax authorities have realised
that their tax systems have a long way to go to catch up with a global digital
market place, crypto-currencies, transfer pricing and IP protection. Late last
year the European Commission introduced </span><a href="http://ec.europa.eu/taxation_customs/taxation/vat/traders/e-commerce/index_en.htm" style="text-indent: -18pt;">fundamental
changes in the way in which digital goods and services will be taxed within the
EU</a><span style="text-indent: -18pt;">. Today it is possible to base a digital downloads business in Luxemberg
and pay a flat rate of VAT there of 3 or 15%. From 1</span><sup style="text-indent: -18pt;">st</sup><span style="text-indent: -18pt;"> January 2015,
companies will have to register and pay VAT where the consumer is located,
presenting a significant headache to anyone selling digital goods and services
cross-border within the EU and exposing them to much higher rates of VAT such
as 27% in Hungary. In addition to the margin impact of these changes and the
need to deal with up to 28 different tax authorities, companies will be forced
to reconsider their pricing strategies, customer experience and supporting systems
in order to comply with the legislation, or face penalties from tax authorities
in EU member states looking for new sources of revenue.</span></span></div>
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<span style="text-indent: -18pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">5. Technical debt – as easy as it may be to consume
computing power from the cloud, </span><a href="http://en.wikipedia.org/wiki/Technical_debt" style="text-indent: -18pt;">technical debt</a><span style="text-indent: -18pt;"> is
becoming a major issue. The barrier to entry into the digital world is
extremely low and the pace of change extremely high, leading to many
organisations developing and launching new apps, micro-sites and platforms in a
sporadic and uncontrolled way and building up their technical debt. Gartner
assert that </span><a href="http://www.forbes.com/sites/lisaarthur/2012/02/08/five-years-from-now-cmos-will-spend-more-on-it-than-cios-do/" style="text-indent: -18pt;">by
2017, the CMO will be spending more on technology than the CIO</a><span style="text-indent: -18pt;">. That spend
needs to carry significant responsibility to ensure management of technical
debt, including adherence to quality standards, governance, standardisation and
re-use, decommissioning legacy applications etc</span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">6. Delivery governance – with the CMO increasingly
affecting digital spend and with the supplier eco-system increasingly
fragmented into multiple agencies, SaaS vendors, SIs, analytics boutiques and
others, delivery governance is becoming extremely challenging. Contrary to
popular believe an Agile delivery approach requires strong governance and
control, particularly when many third parties are involved. Lack of control of
large scale digital technology programs will no doubt see many more major
failed mega-programs (see </span><a href="http://www.bbc.co.uk/news/entertainment-arts-22651126" style="text-indent: -18pt;">“BBC abandons
£100m digital project”</a><span style="text-indent: -18pt;">)</span></span></div>
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<span style="text-indent: -18pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">7. Contracting and commercial challenges – in addition,
simply contracting for a digital program can be a headache. Most procurement
departments simply have no experience in contracting with a range of SaaS
providers, each with different policies and standards regarding up-time, access
to data, portability of data etc. Se Ray Wang – </span><a href="http://www.forbes.com/sites/raywang/2012/04/30/quark-summary-what-cfos-need-to-know-about-saas-and-cloud-integration/" style="text-indent: -18pt;">“What
CFO’s need to know about SaaS and Cloud Integration”</a><span style="text-indent: -18pt;">.</span></span></div>
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<span style="text-indent: -18pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">8. Cyber threats – quite simply there is not a
single board today who should not be taking cyber risks seriously. In their </span><a href="http://www3.weforum.org/docs/WEF_GlobalRisks_Report_2014.pdf" style="text-indent: -18pt;">Global Risks
2014 report</a><span style="text-indent: -18pt;">, the World Economic Forum stated “The world may be only one
disruptive technology away from attackers gaining a runaway advantage, meaning
the Internet would cease to be a trusted medium for communication or commerce”</span></span></div>
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<span style="text-indent: -18pt;"><span style="font-family: Arial, Helvetica, sans-serif;"><br /></span></span></div>
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<span style="text-indent: -18pt;"><span style="font-family: Arial, Helvetica, sans-serif;">9. Cannibalisation and channel conflict – by its
very nature a digital transformation, disrupts an analogue business model and ways
of working. This often causes heated conflict and debate – should we disintermediate
our channel partners and sell direct? Should we charge the same price for the
digital version? How aggressively do we try and replace today’s cash cow?</span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><span style="text-indent: -18pt;">10. Skills Shortage – digital has crept into almost
every aspect of life with astonishing speed, but knowledge and skills are yet
to catch up. The European Commission estimate that in 2015 the EU will face a </span><a href="https://ec.europa.eu/digital-agenda/en/grand-coalition-digital-jobs-0" style="text-indent: -18pt;">skills
shortage of 900,000 digital professionals</a><span style="text-indent: -18pt;">. This skills shortage has
manifested itself in almost every digital program I have worked on. Success
with digital requires a broad mixture of skills from right-brained creative to
left-brained technical and analytical. Skills shortages can appear in a broad
range of roles from programmers to data scientists to digital tax and legal
specialists.</span></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;"><o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif;">The list above represents just 10 of the most common
challenges that I see in digital transformation programs. If you think of
others please do let me know! </span><o:p></o:p></div>
</div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-2919917372718036132013-09-13T10:26:00.001+01:002013-09-13T10:26:18.052+01:00Caught between a digital David and Goliath<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiM_KOTiHwu02QJjYy5HEPYPYjD0BMDlF0_DSw_j33n8-Vx2Qvog0YK4ffmpjQGYuk05Za5RMjXW5YCekC8KC40cHyyOMAG86L29CWygoL4Q8fjo1xWDz25cAMcKzBTx15n1a5oH_Z0XuBl/s1600/iStock_000013174421Small.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="155" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiM_KOTiHwu02QJjYy5HEPYPYjD0BMDlF0_DSw_j33n8-Vx2Qvog0YK4ffmpjQGYuk05Za5RMjXW5YCekC8KC40cHyyOMAG86L29CWygoL4Q8fjo1xWDz25cAMcKzBTx15n1a5oH_Z0XuBl/s200/iStock_000013174421Small.jpg" width="200" /></a></div>
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On one hand digital has democratised. It has created a level
playing field for small, disruptive start-ups to launch a new business fast,
leveraging computing power in the cloud and motivating peer-to-peer armies of
willing consumers to create vast scale at a remarkably low cost (see my posts <a href="file:///C:/Users/2000097/Documents/Marketing/Blog/%22Customer%20to%20Customer%22%20and%20the%20legend%20of%20Kachiwachi%20-%20http:/thecustomerevolution.blogspot.com/2010/02/customer-to-customer-and-legend-of.html">“Customer
to Customer and the legend of Kachwachi”</a> or <a href="http://thecustomerevolution.blogspot.com/2010/01/outsource-your-marketing-sales-service.html">“Outsource
your marketing, sales & service to your customers”</a>).<o:p></o:p></div>
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On the other hand, digital has created a vastly uneven
playing field, concentrating enormous power into the hands of digital mega-vendors
with enormous data stores, insight into consumer behavior and often one-click
billing relationships with huge chunks of the population. More and more we see
the mega-vendors moving into new industries like Financial Services (via mobile
wallet offerings, virtual currencies etc), Computer & Telephony Hardware
(phones, tablets, netbooks etc), Media (music, movies & sports), Automotive
(driverless cars), Software, Groceries, Gaming, Communications, Healthcare and
many more…<o:p></o:p></div>
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The challenge for the average FTSE 250 or Fortune 500 Company
(that might have been around for say 20-50 years) is that they are neither a
lean, disruptive start-up; nor are they a digital mega-vendor. They are, in
effect, caught between David and Goliath. <o:p></o:p></div>
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The majority of businesses in this category certainly have
considerable assets (e.g. brands, relationships, physical outlets, contact
centres, contracts with customers etc), but they also have a considerable legacy
(e.g. brands (?!), physical outlets (?!), contact centres (?!), contracts with
customers (?!) etc). In addition, they also have to deal with the significant challenge
of remnants of technology, mind-sets, route to market and operating models that
were quite simply designed for an analogue age (see my post on <a href="http://thecustomerevolution.blogspot.co.uk/2013/01/crm-for-digital-age.html">“CRM
for a digital age”</a>).<o:p></o:p></div>
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The majority of FTSE 100 / Fortune 500 businesses therefore
face a challenge; namely, how they identify and leverage the assets they have, whilst
at the same time removing (or transforming) their legacy, in order to compete
against both David and Goliath at the same time.<o:p></o:p></div>
</div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-48769045578016332092013-05-21T18:05:00.000+01:002013-05-21T18:05:04.642+01:00Watson, Connected Everything and what it could mean for Customer Service<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2PYQRjqR048a4Yyg28-xBvBB88BjzuJ6EtF4Znc8EYaUUz8rXdDZYeAhPuR3YpDgZCQaV_LkJErzFrnG-m2x0KCmZQNi_cxocVq1_gHsrlcIGVcH72LCPDAKjg__mi9Z6Gq4ApfzkSj_x/s1600/Watson.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2PYQRjqR048a4Yyg28-xBvBB88BjzuJ6EtF4Znc8EYaUUz8rXdDZYeAhPuR3YpDgZCQaV_LkJErzFrnG-m2x0KCmZQNi_cxocVq1_gHsrlcIGVcH72LCPDAKjg__mi9Z6Gq4ApfzkSj_x/s200/Watson.jpg" width="200" /></a></div>
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I read three thought-provoking articles this week. Firstly, <a href="http://www.mckinsey.com/insights/high_tech_telecoms_internet/connecting_everything_a_conversation_with_ciscos_padmasree_warrior">an
interview with Cisco’s Padmasree Warrior</a>, published by McKinsey Insights .
In the interview, Padmasree Warrior argues that despite 20 years of digital
revolution we have only reached around 1% of what could be connected in the
world. Over the next 10 years Cisco expect that figure to rise significantly as
more and more people, devices and sensors connect. </div>
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Secondly, I read Wim Rampen’s latest post <a href="http://wimrampen.com/2013/05/20/dont-take-the-customer-decision-journey-for-granted/">“Don’t
take the customer decision journey for granted”</a>. As ever, Wim cuts through
the hype of terms like “big data” and “customer engagement” and grounds our
thinking in a service dominant logic mindset. He argues than rather than
throwing more technology at Big Data and assuming that predictive analytics
will fix every problem, in fact a greater abundance of data should present us
with a greater ability to understand the jobs that customers are trying to do
and give us better insight to the barriers they face. In turn this should
inform investments that are made to give customers the right information, tools
and transparency at each step of their decision journey.</div>
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Thirdly, I read today that IBM plan to redeploy Watson for
Customer Service (see <a href="http://www-03.ibm.com/innovation/us/watson/watson_for_engagement.shtml">“Putting
Watson to Work”</a> ) by launching the Watson Engagement Advisor that key clients
like ANZ Bank, Royal Bank of Canada and Malaysia Telecom will be piloting. This
announcement follows hot on the heels of the announcement that <a href="http://www.businessinsider.com/ibm-opens-up-watson-to-developers-2013-5">Watson
would be opened up as a service</a> to developers to build applications around.
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Bringing these three streams of thought together could be
powerful for customer service. The exponential rise in the number of connected
devices over the new few years brings an opportunity to infuse real time data from
up and down the value chain into business processes to help customer service make
smarter decisions. For example, sensing that parts in the supply chain are
delayed, traffic conditions are bad, break pads seem to be showing greater wear
than usual after 10,000km... can all help inform decision making, whether that
be at a macro level (e.g. issuing a product recall) or at a micro level (pro-actively
informing a customer of a delay or simply having all the right information to
hand to understand what’s causing the customer’s issue).</div>
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The evolution of Watson from Jeopardy winning super-computer
to an open, service-based platform could allow customer service organisations
to put that smarter decision making into the hands of the customers via
whatever device or app they want to use. What I like about the potential for
Watson in customer service is that it will start by understanding the job the
customer is trying to do (“How can Watson help you today?...”). This has always
been the promise of voice self service systems, chat-bots and self service
knowledge bases, but none have ever quite had the computing power of Watson to
make sense of complex queries and compute vast amounts of structured and
unstructured data to find the right answer.</div>
</div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-64639423820246326692013-03-12T18:55:00.000+00:002013-03-15T08:37:27.041+00:00Digital channel shift vs. digital paradigm shift<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAtD2xyEqCSCEaw23YOjQak6rC-rxneBHVLgHY_0PtQ0urW2nTxNfP12PEM6huHg68jBJ1NVa-9jTupmpat7HU2dCzVR1Hm0Cg6mxzViM7MtSC5MUeyQqgBkkKXli3WmShpXPwsTrcMHdB/s1600/iStock_000011607554XSmall.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="131" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgAtD2xyEqCSCEaw23YOjQak6rC-rxneBHVLgHY_0PtQ0urW2nTxNfP12PEM6huHg68jBJ1NVa-9jTupmpat7HU2dCzVR1Hm0Cg6mxzViM7MtSC5MUeyQqgBkkKXli3WmShpXPwsTrcMHdB/s200/iStock_000011607554XSmall.jpg" width="200" /></a></div>
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<span style="font-family: Helvetica, sans-serif; font-size: 10.5pt; line-height: 15pt;">I had the pleasure of speaking with </span><a href="http://ca.linkedin.com/in/hutchisonbill" style="font-family: Helvetica, sans-serif; font-size: 10.5pt; line-height: 15pt;">Bill Hutchison</a><span style="font-family: Helvetica, sans-serif; font-size: 10.5pt; line-height: 15pt;"> a couple of
weeks ago. Bill is a pioneer in smart cities, working in Canada, Russia and
Asia to evangelise the concept of the hyper-connected city and the
potential for paradigm-shift thinking that hyper-connectivity presents. Bill
chaired the <a href="http://www.waterfrontoronto.ca/">Toronto Waterfront</a> development, one of the largest urban
regeneration and connected community projects in the world. One thing he said
to me which resonated was that the last 20 years of digital innovation and
disruption have simply set the foundation for even greater change to come. One
of the opportunities of digital disruption is the potential it offers to think
about paradigm shifts.</span></div>
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<span style="font-family: Helvetica, sans-serif; font-size: 10.5pt;">Many clients I have worked with over the years have approached digital
as a channel-shift project - "if we could shift 10% of calls from our call
centre to our smartphone app we would save x%", "if we could switch
x% of loan applications to online we would save y% and acquire z% more
clients". There's nothing necessarily wrong with that approach but the
history of new technology adoption is littered with examples of people using a
new technology to enable an old process or an old way of working. Putting a
loan application online is not necessarily going to change the game or protect
against a future industry disruptor.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif; font-size: 10.5pt;">10 years ago Nike has very little idea who purchased their trainers and
how they used them. Consumers made anonymous purchases in sports
shops and department stores and rarely bothered to fill in a registration card
to tell Nike about themselves, let alone how they used their trainers. Nike
could have adopted a channel shift mindset and approach to digital, creating an
online portal for people to register their purchases and upload information
about their training regimes. They could have done that but they chose a
paradigm shift strategy. By embedding software into trainers via <a href="http://nikeplus.nike.com/plus/">Nike+</a> and building a gamified
community where users set their training goals or participate in virtual /
physical games of "tag", Nike has transformed the information and
insight that it has about it's consumers. At the point of writing a staggering
2,146,741,969 miles have been run by the community and automatically uploaded
to Nike.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif; font-size: 10.5pt;">GiffGaff could have launched an MVNO with a channel shift strategy.
Instead they chose a paradigm shift by creating a <a href="http://thecustomerevolution.blogspot.co.uk/2010/12/giffgaff-case-study-of-customers-in.html">peer
to peer business model</a> where customer word of mouth drives acquisition and
members fix over 90% of service requests for other members in the support forum
with an average time to fix a problem of under 3 minutes.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif; font-size: 10.5pt;"><a href="http://uk.zopa.com/">Zopa</a> could have followed a channel
shift approach and launched an online only business selling loans, but they
chose a paradigm shift model by creating a peer to peer lending forum.<o:p></o:p></span></div>
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<span style="font-family: Helvetica, sans-serif; font-size: 10.5pt;">Threadless, Zappos, Kickstarter, eBay, ZipCar, Nabbesh (client),
Netflix, Salesforce.com, Amazon, NowTV (client), CDBaby, Spotify, Lastminute.com and many others all
could have pursued channel shift strategies in their respective industries...
but they didn't.<o:p></o:p></span></div>
</div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-19019878046208660902013-01-15T15:38:00.000+00:002013-01-15T15:38:00.535+00:00CRM for a digital age<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbTvwKYTdingEAV_H9tSsljiBAk9wiNO4Q2DJiDDaXPxATPfey38JlW2KhV0-6grUloWhs8d84hi-qv4JiRTdoyFXVv7fl5sGwh3aDd1QqsPNqX2FrWFLwnNBkl7LZVp9NRSEdUZrBkpzH/s1600/iStock_London_Medium.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="123" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgbTvwKYTdingEAV_H9tSsljiBAk9wiNO4Q2DJiDDaXPxATPfey38JlW2KhV0-6grUloWhs8d84hi-qv4JiRTdoyFXVv7fl5sGwh3aDd1QqsPNqX2FrWFLwnNBkl7LZVp9NRSEdUZrBkpzH/s200/iStock_London_Medium.jpg" width="200" /></a></div>
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<span style="font-family: Arial, sans-serif; font-size: 10pt;">Most companies invested in CRM software for the first time between 1996
and 2006. That decade saw the CRM boom and bust. Siebel went public in 1996, signed
huge multi-million dollar software license deals, peaked at a 45% market share
in 2002 and was acquired by Oracle in 2005. The big ERP vendors all entered the
market with varying success, Nortel acquired Clarify for $2.1bn in 1999, (before
selling for just $200m 2 years later) and </span><a href="http://salesforce.com/" target="_blank"><span style="color: #047ac6; font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB;">Salesforce.com</span></a><span style="font-family: Arial, sans-serif; font-size: 10pt;"> was founded in
1999, winning over 20,000 customers by 2006.</span><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-GB;"><o:p></o:p></span></div>
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<span style="font-family: Arial, sans-serif; font-size: 10pt;">The CRM applications that most companies implemented during that decade of
1996-2006 were predominantly Sales Force Automation solutions and Customer
Service /Contact Centre software. Solutions designed to support Industrial Age
distribution models of large field sales forces and customer service agents.
Many projects failed (analyst estimates range greatly from approximately one to
two thirds of projects) and many companies experienced long, painful
implementations that rarely achieved the anticipated benefits. As many of the CRM
projects were so slow and painful to implement, many companies have retained
the solutions that they implemented for far longer than intended and the relics
of these systems still power a large part of the customer experience today.<o:p></o:p></span></div>
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<span style="font-family: Arial, sans-serif; font-size: 10pt;">Looking back at the wave of digital change we have seen over the last
decade or so, I would pick out 2006 as a tipping point. In 2006 worldwide
Internet penetration stood at 15.7% (see http://www.internetworldstats.com/stats.htm).
Since 2006 it has more than doubled to over 30%. During the last 6 years we
have seen enormous changes in technology and communications. We have seen the
mass roll-out of broadband and mobile broadband, an explosion of connected,
smart hardware devices like the iPhone (2007), the iPad (2010) and the
seemingly unstoppable rise of social networks like Facebook (founded in 2004
but hitting 500m users in 2010 and 1bn in 2012), Twitter (founded in 2006) and
GooglePlus (founded in 2011).<o:p></o:p></span></div>
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<span style="font-family: Arial, sans-serif; font-size: 10pt;">There is a stark reality here. Most companies invested in CRM for an
analogue age, designed to support a predominantly field sales force and contact
centre-led distribution model. They invested before worldwide Internet penetration
reached critical mass, before any of the digital disruption we see today became
main stream and before digital became baked into the distribution model. Hence
we now see IT departments in a spin, trying to keep up with increasingly
frantic demands from the business and trying to bolt on new applications,
services and channels to legacy systems that were simply never designed to be
used in the way they are today.<o:p></o:p></span></div>
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<span style="font-family: Arial, sans-serif; font-size: 10pt;">CRM for a digital age has to look different. It cannot be the
technology-centric, monolithic disaster that plagued some (but certainly not
all) of the previous generation of projects. CRM for a digital age is not any
particular software or technology and it will vary greatly from business to
business but it is likely to display some of the following characteristics:</span></div>
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<ul style="text-align: left;">
<li><span style="font-family: Arial, sans-serif; font-size: 10pt; text-indent: -18pt;">Designed for
Customers and front line customer-facing staff, not just for management</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 10pt; text-indent: -18pt;">Focussed on speed to value and positive internal momentum</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 10pt; text-indent: -18pt;">Designed with a core foundation (e.g. data, processes) but able to
embrace change at the front-end of customer interaction (i.e. devices, apps,
social networks etc)</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 10pt; text-indent: -18pt;">Delivered in an iterative fashion with constant business involvement</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 10pt; text-indent: -18pt;">Open and integratable in nature (often made up of a collection of
services rather than a single package)</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 10pt; text-indent: -18pt;">Cross-functional in nature, busting through internal silos</span></li>
<li><span style="font-family: Arial, sans-serif; font-size: 10pt; text-indent: -18pt;">Paid for based on
value delivered to the business</span></li>
</ul>
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<span style="font-family: Arial, sans-serif; font-size: 10pt;">The challenge most companies face is one of transition. Shifting not
only from legacy CRM technologies, but also from legacy mindsets, procurement
models, IT delivery models and of course distribution models. Without question,
all of those challenges are difficult, but is it really realistic to continue
with a CRM solution designed for an analogue age?<o:p></o:p></span></div>
</div>
Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-57024363710283451592012-10-24T09:56:00.001+01:002012-10-24T09:56:35.898+01:00The future of TV is not quite as rosy for consumers as it appears<p class="MsoNormal"><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgVs6XYWUPGpQbwLcZjNDvZx_xwdQFfWxxp8NSTIb-FwwQQDE0JBi1x2HnWR8-MMGVKCGwvRtSB_rn1opmBk8Yy_TDZzZU2ORMztA60RY53bdKbqa5-45XNjceN-AFbcg8eJ5c6nkTrGdPy/" alt="" width="250" height="188" />I’ve been reading lately about the future of TV. There are no shortage of interesting material on the topic like these short <a href="http://www.cnbc.com/id/47285315/Predictions_The_Future_of_TV">quotes from industry leaders compiled by CNBC</a>, the great post by Brian Solis <a href="http://www.briansolis.com/2012/05/the-future-of-tv-is-more-than-social-its-a-multi-screen-experience-that-needs-design/">“The future of TV is more than social it’s a multi-screen experience that needs design”</a> and this must listen podcast by Mitch Joel <a href="http://www.twistimage.com/blog/archives/the-future-of-television-is-social/">“The future of TV is social”</a>.</p><p class="MsoNormal">I don’t dispute any of the conclusions in the content above. The lines of argument are that TV is the next big battle ground. One that has remained relatively unchanged for 25 years but one that looks set to see significant disruption over the next few years through the convergence of social media and digital technologies with television, through dual-screen media consumption and through a wave of technology innovations from motion control, voice control, ultrahigh definition, 3D, to greatly enhanced search and streaming etc. This post is not about the potential technology innovation in the future of TV, it’s about some of the practical barriers that consumers may face over the coming years as the TV industry goes through its transformation.</p><p class="MsoNormal">The first challenge I see is that in an industry dominated by mega-players content will be distributed amongst multiple providers via a rights bidding war. If I just take the UK market as an example, competition to define the future of TV is fierce. We have the traditional terrestrial TV providers like the BBC and ITV who are investing heavily in digital and streaming content. We have the dominant Satellite TV provider BSkyB, whose monopoly has been eroded somewhat over the last few years by BT, Virgin Media and others. In addition, we have Apple TV, Netflix, Google TV, Tesco (via their blinkbox acquisition), Amazon (via their LoveFilm acquisition) and a host of other players inclusing potentially some of the content providers streaming their content direct to consumers. In other words the TV industry has some of the largest companies on the planet with some of the deepest pockets, all competing for eyeballs. In order for any of those players to remain relevant in the market they have to have content rights. A potential scenario for the next few years is that we may see a battle of the giants for content rights which will not only push up prices but also ensure that content is scattered across multiple providers. Take for example the recent announcement that the 2013-14 to 2015-16 premier league football rights have been sold to BT and BSkyB for £3bn – this represents a staggering increase of £1.25bn on the current rights package and splits content between 2 competitors. As rights for other premium content follow suit the result for consumers may be that consumers will need to go to multiple providers for content and that these providers may change at every rights renewal.</p><p class="MsoNormal">A secondary impact of the rights war will be that providers, keen to claw back their investments, will hang on to their existing business models. Those with lucrative subscription models will cling on to them as long as they can and those with exclusive rights (e.g. premier League football, Heineken Cup Rugby etc), will maintain either high prices or increasingly sophisticated (or relentless!) forms of advertising – some of the terrestrial providers in the UK now seem to have more forced adverts on their streamed content than they do on free / live television! The result for consumers? We may well have to consider multiple subscriptions, multiple contracts, multiple hardware devices and more adverts forced into our content. In addition, it’s likely that we may see more providers heading the way of Setanta sports to bankruptcy as over-prices rights become a poisoned chalice for some providers.</p><p class="MsoNormal">A third challenge I see is viewing quality. Over the last few years picture quality within the DVD / Cinema and Cable TV segments has improved radically – we’ve seen a mass roll out of HD, some muted take up of 3D and the potential launch of ultra-high definition. In the streaming world, when picture quality increases so to does the strain on the broadband network. This phenomenon is of course exacerbated as more and more people start to stream more and more content. At the end of last year Netflix accounted for 33% of peak time internet traffic in the US. As more players enter the streaming video market, more consumers stream content and the resolution of that content increases, broadband networks will likely struggle to keep pace. In reality this means one thing for consumers in the short to medium term – buffering!</p><p class="MsoNormal">A final challenge that consumers may have to contend with will be shortening product lifecycle times and continual hardware / software compatibility issues. To illustrate what I mean here, let me use a personal example. I bought a smart TV less than 18 months ago. The software is already out of date and cannot be upgraded – in effect my “smart” TV is now just a dumb monitor. Now, I understand that many hardware manufacturers moving into software have a pretty steep learning curve to produce brilliant, upgradable software (with the exception of Apple it’s simply not in their DNA). In addition, I understand that rapid technology innovation is resulting in shorter product lifecycles. But most consumers, used to purchasing a TV that lasts many years, may not be so accepting. In addition, TV manufacturers will likely battle against an array of players for dominance of the living room. If you’ve invested millions in developing “smart” TV’s, the last thing you want is for your device to be kept as a dumb monitor, while consumers plug in IP boxes and TiVos and “flick” content from their smart phones onto the TV. Whilst consumers will undoubtedly see huge innovation, it is highly unlikely that the various hardware / software providers will work in harmony, again leaving consumers facing potential frustration, confusion and expense.</p><p class="MsoNormal">Bill Gates once said: “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”. There are some incredibly exciting innovations in the future of television, but mass adoption may be held back, unless some of the barriers above are addressed.</p>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-6498015782382419692012-10-17T08:03:00.001+01:002012-10-17T08:03:07.203+01:00The 360 degree customer view is dead<p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span style="font-size: 13.5pt; font-family: 'Times New Roman', serif;"><img style="vertical-align: top;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiuwdFXAuuWdjlI0f1P4_onRAda7AFsckIYLkyCwGBp5TH3yGl7CXSSv1t9xjaP51kNCMBhwAJikozFHk-xgrha_AduOKE0Ru-bmJW_uCImz6h8To7coX4dTXJlsqwSwKRCxm3QqaC1IyK5/" alt="" width="200" height="133" /></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span style="font-size: 12pt; font-family: Arial, sans-serif;">I've never been entirely comfortable with the phrase "360 degree customer view". I remember hearing it for the first time in a Siebel sales pitch. The sales guy put up a slide with a customer on one side and a series of connectors - like spokes of an umbrella - connecting to all of the different silos of customer data - the call centre, the field sales force, the finance department and so on. The assertion that followed was the Siebel would connect all the silos of customer data allowing anyone who interacted with the customer to have a complete history of the customer. It was argued that greater customer insight, in turn, could be used to build stronger, more profitable customer relationships.</span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span style="font-size: 12pt; font-family: Arial, sans-serif;">Thinking back to my early days as a CRM practitioner, I also remember the first CRM training course I attended, run by Francis Buttle. One module of the course described the inability of many organisations to understand their customers and think from their customer's perspective. The training course gave a case study of a Swiss bank who had launched a new savings product designed for pensioners. Now two caveats... firstly, I have no idea if the case study was a true story and secondly, I'll probably do it an injustice as I’m sure I don’t remember all the details. But if I remember correctly the jist of the story was that the Swiss bank had completed a market research exercise that suggested that pensioners in rural locations represented a large untapped market for savings products. They designed a new product, specifically designed for pensioners and they employed a marketing agency to come up with a tailored campaign to target pensioners. To ensure that bank staff would execute on the anticipated success of the campaign, the bank initiated a training program to teach their staff how to interact effectively with pensioners. They built booths in some of their branches and put on coffee and biscuits for their potential new clients. The new product launch was an unmitigated disaster. Despite the research that showed that Swiss pensioners had savings funds stashed under their mattresses and despite the large investments, the bank barely signed up any new customers. In desperation they undertook a research program to try and find out what went wrong. They travelled to villages in Switzerland and ran focus groups with pensioners. When they asked them why they were reluctant to take out the new savings products of the bank one theme emerged above all others - the pensioners were scared of getting mugged on the way to the city banks. With that insight the bank overhauled it's branch model and used large mobile banking vans to visit the local villages to interact with their potential clients on their terms. Knowing that security was an issue they also introduced an insurance policy to offer unlimited protection on savings funds stored with the bank. Again, I have no idea whether that story is true, I suspect some of it was embellished to make a key point of thinking outside-in from the customer’s perspective, but the story stuck with me.</span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span style="font-size: 12pt; font-family: Arial, sans-serif;">So back to the "360 degree customer view", my unease with the term comes from that fact that although it may be possible to build a transactional view of all of a customer's interactions, orders, complaints etc with your company, those transactions only represent a tiny fraction of a true "360 customer view". A consolidated list of transactions with one company tells us nothing about how a customer is thinking or feeling at any given point in time (this changes constantly based on a whole range of factors that are entirely outside of our control). For example, a transaction that tells me that a customer had broadband installed, probably doesn't tell me that the engineer was late, rude and left a mess in the customer's living room. An inside-out list of transactions tells us nothing about a customer's dealings with competitors, their pain points, their value drivers and more importantly how these change, chameleon-like, according to the situation the customer is in.</span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span style="font-size: 12pt; font-family: Arial, sans-serif;">Now before you ask, social media is not the panacea. Social media is not the missing link in the 360 degree view. Yes, of course you can supplement CRM data with social data and yes, this can sometimes give you more of an indication as to who the customer really is and what they really think. But, one of the dangers I see with adding social data to CRM is that it can make marketers act like kids in a candy store and it can perpetuate inside-out thinking. With so much data to slice and dice, it becomes even easier to perform a segmentation and blast more and more inside-out offers at customers (people aged 21-25, living in NYC, who wrote a product review of an MP3 player in the last month, who clicked on an add must surely want a targeted email offer for a pair of headphones so let’s keep spamming them???).<br /> <!--[endif]--></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span style="font-size: 12pt; font-family: Arial, sans-serif;">A harder position to take, but in my view, one that can yield better results (in the form of long terms profitable, win-win relationships) is one that seeks first to understand the things customers value, the journeys they go through and the critical moments of truth within those journeys. Second, to acknowledge that you can't control how a customer thinks, feels, buys, complains but you can give customers tools to help them create value for themselves and you can sense, respond and fix things when they go wrong. When I first heard the story of the Swiss bank all those years ago the simplicity of listening to customers, rather then making assumptions about them stuck with me. Today, we are awash with data, the challenge is in how we use it.</span></p></p>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-3269551661333955872012-08-23T13:29:00.001+01:002012-08-23T13:29:34.620+01:00The three big challenges facing organisations investing in CRM today<p><p class="EYBodytextwithparaspace"><span style="font-family: arial, helvetica, sans-serif; font-size: small;"><img style="vertical-align: top;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjnzQ-4ows6ujFtjdzG4NcSbnupqUW6IwBsEYi8IGiyiOiHpZqzzeG7DCvlUAfr-o4ecvdDzPEZ7zFhcEaQ5BAk-JjXO1QBnT0j3UwdAW_o_jHWjlVZQLHRZCOHDFRHqkvXPDFeEWwqPOgP/" alt="" width="150" height="100" /></span></p><p class="EYBodytextwithparaspace"><span style="font-family: arial, helvetica, sans-serif; font-size: small;">There was a time when the main challenge facing an organisation investing in CRM was the amount of discount they could negotiate on their Siebel licences. That was a time, when for many companies, CRM was all about technology. A time when the original definitions of CRM like “building mutually beneficial customer relationships” were ignored in favour of technology bells and whistles. Today the market has matured. CRM buyers are pretty savvy – many were burnt by investing in CRM the first time round and are still suffering from the hangover. I’m often asked by clients who got things wrong with CRM a decade or so ago, how they can ensure that they get things right today. I see three big challenges that need to be addressed to ensure CRM success.</span></p><p class="EYBodytextwithparaspace"><span style="font-family: arial, helvetica, sans-serif; font-size: small;">The first challenge I see is that “failed CRM” was all about value to management. People invested in sales force automation solutions in order to get better visibility over their sales reps, which in turn enabled better forecasting, better alignment of resources to priority accounts (in the current quarter) and in theory a reduction in the loss of account knowledge when a sales rep left the company. Alternatively, within Customer Service management attempted to enforce call scripts, the measurement of everything (like average call handle time), scripted cross-selling in every call, or enforced channel shift to reduce costs (instead of “your call is important to us” read “you may want to speak to an agent but our CRM system will push you to an IVR (which in turn will advise you to go online) because it’s cheaper for us”). To be successful CRM investments need to unlock value to a balanced group of stakeholders. At a minimum this includes management, front line users who interact with the customer and of course, let’s not forget customers! Unless you have a clear picture of how your CRM investments will help unlock value to those stakeholders (particularly customers!) you are simply pumping money into the CRM technology slot machine and hoping to win. Most sales people I speak to hate “failed CRM” because all it did for them was create 2-3 hours admin on a Friday afternoon. Most customer service people I speak to hate “failed CRM” because they felt uncomfortable reading the script, or having to cross-sell to an angry customer. But critically, most end customers I speak to hate “failed CRM” because all they wanted to do was speak to someone about their problem. Transitioning to an outside-in, customer-centric mindset and balancing your understanding of value is the first challenge.</span></p><p class="EYBodytextwithparaspace"><span style="font-family: arial, helvetica, sans-serif; font-size: small;">Once you have a balanced view of stakeholder value, the second challenge you need to think about is the full range of capabilities that need to be improved in order to unlock that value. I frequently come across CRM business cases that show a clear and direct linkage between a technology investment and a business outcome with no consideration to the inter-connected capabilities that might get in the way. For example, making an assumption that investing in XYZ technology will reduce sales force admin time is fine, but assuming that sales people will use that time to open up new accounts may be questionable. For that to happen it may well be that incentives need to be changed, that new business development or solution selling skills need to be improved, or that the sales organisation is simply structured in the wrong way. Without addressing those broader but dependant capabilities, you simply cannot guarantee that CRM investments will release value.</span></p><p class="EYBodytextwithparaspace"><span style="font-family: arial, helvetica, sans-serif; font-size: small;">Finally, most people I speak to these days about CRM face a delivery problem. “Failed CRM” was monolithic and big-bang. Implementations took many months or even years before users saw anything. On the whole, clients I speak to today want to embrace a more iterative, agile way of implementing but that’s not as simple as flicking a switch and becoming “Agile” (and certainly not as simple as buying a cloud-base solution). I’ve seen several Agile programs that started with the best of intentions but ended up in tricky situations as maybe the business didn’t quite understand the level active participation and involvement that would be required, priorities across different business stakeholders and technology were not properly aligned, the technology simply wasn’t particularly suited to an agile implementation, or the technology solution evolved into SaaS best of breed Hell (see Ray Wang's latest from CRM Evolution 2012 </span><a href="http://blog.softwareinsider.org/2012/08/14/event-report-crm-evolution-2012/">http://blog.softwareinsider.org/2012/08/14/event-report-crm-evolution-2012/</a><span style="font-family: arial, helvetica, sans-serif; font-size: small;">. Agile done well is a delight – expectations are aligned through constant communication and progress is visible for all to see. Agile done badly is a pretty dangerous delivery approach – at its worst used to justify taking unnecessary short-cuts or avoid any planning. Transitioning to an agile delivery approach is the third challenge.</span></p><span style="font-size: small; font-family: arial, helvetica, sans-serif;" lang="EN-US"> The three challenges are not exhaustive but I certainly see them repeated across a number of different clients and industries. What do you think is missing?</span></p>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-86774131981268160172012-07-02T15:39:00.001+01:002012-07-02T15:39:22.362+01:00CRM Strategy interview transcript<!--[if gte mso 9]><xml> </xml><![endif]--> <!--[if gte mso 9]><xml> Normal 0 false false false EN-US JA X-NONE </xml><![endif]--><!--[if gte mso 9]><xml> </xml><![endif]--> <!--[if gte mso 10]><style> /* Style Definitions */table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:Cambria; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-ansi-language:EN-US;}</style><![endif]--> <!--StartFragment--><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"><img style="float: left;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjWooVsHonfdkY0MLc-OvfxQWhMGn1IbVQyirpMcFKLZh4_IOBvDLbfL2odjQUg4msf6kCBWfBNAqp_uehMvF8MRmOPEEnuGxnO0cMVbWEGGNjeQ_fWB2yLMNRQjCyZ0dejOgjkyMRi-xha/" alt="" width="200" height="133" />Below is a rough transcript of an interview I gave to Chuck Schaeffer, CEO of Vantive Media, for CRMsearch</span><span lang="EN-US">.com You can download the interview as a podcast from iTunes <a href="http://itunes.apple.com/us/podcast/crm-thought-leaders-in-their/id468895923">here</a>.</span><span style="font-family: Arial;" lang="EN-US"></span></p><p class="MsoNormal"> </p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - Before we talk about designing and implementing CRM strategy, let’s start with a clear understanding of what we mean by CRM strategy. Can you define or explain what you mean when you reference CRM strategy?</span></strong></p><p class="MsoNormal"><span style="font-family: Arial;"><br /></span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - Let's start with defining CRM. For me the oldest and simplest definitions of CRM are still the best. There are 2 that I like: one is "treat different customers differently" and the second is "CRM is a business approach that aims to build long term, mutually beneficial relationships with customers"</span><span style="font-family: Arial;"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">So CRM strategy for me is about forming a vision of where you want to get to with CRM, evaluating your current state and the strengths and weaknesses of your capabilities and then defining the path to achieve your goals. Typically a CRM strategy would look at improving a range of capabilities required to enable your vision (from technology to people to process) and then forming a prioritized roadmap for implementation.</span></p><p class="MsoNormal"><span style="font-family: Arial;"><br /></span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - Has it been your experience that CRM strategy is changing or evolving?</span></strong></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US"> </span></strong><span style="font-family: Arial;"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">That's an interesting question - on one hand, if you go back to the definitions of CRM that I previously gave then CRM as a topic has changed very little.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">The problem is that for the first 15 or so years of the CRM market people approached CRM in a technology-centric way and an extremely inside out way. So a typical CRM strategy was about defining a future state that was a static destination 5 years in the future, enabled by a monolithic technology program. The over-riding ethos was one of command and control - CRM initiatives tried to control all customer facing data, processes and customer facing employees e.g. forcing them through a script or forcing them to enter their contacts into a database. CRM initiatives even tried to control customers (defining when customers bought e.g. end of quarter, and what service channels they used).</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">As understanding in the market has improved, the original definitions of CRM have really come back into fashion and so CRM strategy has evolved. I think people are going back to basics and are thinking if we really want to build “mutually beneficial customer relationships" then we need to focus on more the customer, rather than the technology and understand what the customer values from a relationship, what jobs the customer is trying to do when they interact with us and how we can help the customer do those jobs better than the competition. So I think what's changed in CRM strategy is an increasing importance of customer experience.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">The second thing I think has changed is technology - both the technology that enables CRM systems (cloud-based services, flexible, modular) but also the technology that customers use to interact with organizations (over the last 10 years we've seen the rise of social media, mobile devices, apps). This trend makes it increasingly difficult to try and define a static destination as a CRM vision - the reality is that both consumer and enterprise technology is constantly changing so a CRM strategy needs to reflect that and really design for change from the outset</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - How do you recommend business leaders go about designing and implementing their CRM strategy?</span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - 1. Create a compelling need for change - people have got to want the change. This could be a competitive threat, customer numbers on the decline, or an opportunity that excites people, but we need something that galvanizes people.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">2. Get customer-centric, outside-in thinking into the definition of your vision. A good way of doing this is through customer journey mapping - looking through the lens of the customer at the jobs they are trying to do and the moments of truth they face in their journeys.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">3.Clearly articulate that vision (which again, may not be a static destination) it may be a set of principles, but key is that people understand and buy into them.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">4. Evaluate your existing capabilities (tech, people, process)</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">5. Form a prioritized delivery plan of which capabilities you need to improve (of course acknowledging that many are interlinked)</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">6. Start small, iterate and iterate and iterate!</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - Is it necessary to first build a business case to support implementing a new or revised CRM strategy – and if so, what should that business case include?</span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - For me, CRM should be linked to an organizations corporate strategy. If the corporate strategy is to compete in the market with a differentiated service experience then CRM should be about enabling that and the business case should in turn be directly linked to those corporate objectives.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">The types of benefits you would look for in CRM usually related to improved revenue and profitability from doing more business with existing customers for longer. But of course some CRM projects are justified with cost savings derived from channel shift or process efficiencies.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">Ideally, when you think about benefits you should also think about value to everyone in the chain e.g. employees, customers, suppliers etc</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - Do you find that implementing a CRM strategy often entails a cultural change in the business?</span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - Without question and that's the hardest challenge.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">If you look at the rise of social media and big data - everyone is obsessed by the technology challenge of filtering through vast quantities of data, but to me the biggest challenge is an operating model challenge. I've seen countless organizations struggle with social media because it challenges their silos, their speed, their command and control mindset</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - Do you find that there’s often a mismatch between what businesses think they do well and what they really do well - or between how businesses believe there customer relationships are as opposed to how customers would rate those relationships?</span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - yes - frequently.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">One Pharma client I worked with was shocked to discover that their sales people were spending over 50% of their time on activities that their clients valued as low or insignificant. The top things that clients valued accounted for less than 10% of total sales activities</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - if so, why the mismatch? And what do about it? </span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - It's a difficult challenge.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">First – you need to make people aware - in the example I've just given the CEO and sales director were shocked and that created a need for change.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">But realistically many of these behaviors are ingrained in an organization - most sales people are still taught that the most important customers are the ones who are going to place an order this quarter and are measured ruthlessly in closing the deal before quarter end. It's a big shift in culture to prioritize long-term relationships and to do the right thing by the customer - both senior management and front line employees have to believe that it's the right thing to do</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - When developing a CRM strategy, how and when does CRM software fit into the process?</span></strong></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US"> </span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - Quite simply technology is one enabling capability within a CRM strategy. It's unfortunate that the terms has become so synonymous with technology because the reality is that most organizations buy far more technology than they actually use and they cannibalize on the complimentary capabilities required to release the value from their investments </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - Do you find that its still a common scenario whereby companies implement CRM software before they’ve articulated a CRM strategy or defined their customer-facing business processes? Why?</span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">I hope we're through that phase in the market but reality is I think it's still the case that people buy technology first and than 6 weeks / 6 months into a program they start to question why are we doing this? What's in it for customers? How can we prioritize our delivery sprints if don't have a clear picture of what's important.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - How is developing a CRM strategy influenced by disruptive technologies such as SaaS or the cloud, or social media or social CRM? </span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - To some extend SaaS has made things worse - because it's so much easier for a line of business manager to purchase (outside IT) and get up and running with a siloed technology solution, SaaS can be seen as a silver bullet (which of course it is not!).</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">However, at the same time, SaaS of course presents a fantastic opportunity to deliver some of the technology capabilities required to enable a vision much faster and in a more flexible way. Let’s be clear though - you still need a vision and strategy – there are no shortcuts here.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">Social CRM has reinvigorated CRM because it has created a compelling event for most organizations to change. It demands the acknowledgement of customer power and control which in turn demands outside-in, customer experience thinking.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - When CRM strategies fail, what are the most common reasons they fail?</span></strong></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">LB - In my experience most tend to blame the technology but technology is rarely to blame. I wrote this piece on <a href="http://www.zdnet.com/blog/projectfailures/six-ways-crm-projects-go-wrong/8826">“6 ways CRM projects go wrong”</a> which covers reasons for failure like the inside out mindset, “analysis paralysis”, “once bitten twice shy”.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><strong><span style="font-family: Arial;" lang="EN-US">CS - If we look ahead a little bit, what changes do you suspect we’ll see in terms of creating, implementing or refining CRM strategies?</span></strong></p><p class="MsoNormal" style="margin-left: 36.0pt; mso-pagination: none; tab-stops: 11.0pt 36.0pt; mso-layout-grid-align: none; text-autospace: none;"><span style="font-family: Arial;" lang="EN-US"> </span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US">Actually I think we will see a theme of back to basics thinking on relationships. It’s easy to get caught up in the hype of a new technology but the reality is that people not technology build relationships and healthy relationships are never one sided.</span></p><p class="MsoNormal"><span style="font-family: Arial;" lang="EN-US"> </span></p><p><span style="font-size: 12.0pt; font-family: Arial; mso-fareast-font-family: "MS 明朝"; mso-fareast-theme-font: minor-fareast; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-US">The second theme I see is the pressure to try and design for change. It’s clear that product life cycles are getting shorter and shorter and consumers are constantly swarming to the latest device, social network or app. We have unparalleled ability to interact with consumers in new ways and learn vast amounts about them – they challenge is how we apply that insight to the business and how fast we are able to respond.</span></p><!--EndFragment-->Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-8186278865880384762012-06-07T18:54:00.001+01:002012-06-07T18:54:09.924+01:00Fixing Sales Force Automation<!--[if gte mso 9]><xml> </xml><![endif]--> <!--[if gte mso 9]><xml> Normal 0 false false false EN-US JA X-NONE </xml><![endif]--><!--[if gte mso 9]><xml> </xml><![endif]--> <!--[if gte mso 10]> <! /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:Cambria; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-ansi-language:EN-US;} --> <!--[endif] --> <!--StartFragment--><p class="MsoNormal"><span lang="EN-US"><img style="vertical-align: top;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdTiSK81ZbYBZLnTZlUCL2vP2BuzSx8Vb744OGuaOjTZpTJAZ0gLQe5aCrN8SC5Xd6vO9RI6DreBgbnDTsqsBcdx3T9zquuSFm_dKNKSrS0bcxGttf1p_KYcY_QD9AaGHGjNQaAZe1v5SQ/" alt="" width="220" height="152" /></span></p><p class="MsoNormal"><span lang="EN-US">For the past 15 years one of the most common causes of Sales Force Automation project failures has been that they have added approximately zero value to users. Most projects prioritized sales management first and sales people a distant second. SFA projects aimed to imprison sales people; tracking their daily activities, forcing them to give up the knowledge, scripting them through a sales process and creating admin for them. Is it any wonder that the majority of users treated these systems with utter contempt? I have spoken to countless sales people who looked upon their SFA systems as 2-3 hours of admin time per week, usually on a Friday afternoon.</span></p><p class="MsoNormal"><span lang="EN-US"><br /></span></p><p class="MsoNormal"><span lang="EN-US">Sales people who find themselves the victims of bad SFA implementations typically enter the bare minimum amount of information required to cheat their managers into thinking they were using the system effectively, paying particular attention to working out how best to game and not commit the ultimate sin of over-forecasting a deal. Despite the millions invested in SFA applications rogue pipelines in Microsoft Excel complimented by to-do lists on scraps of paper arguably remain the most widely used SFA platform today. Unfortunately this creates a vicious circle of failure. As soon as management start to mistrust the forecast coming from their SFA reports, they too start finding other ways of improving forecast accuracy. They arrange daily or weekly calls with sales people, drilling down on every aspect of a deal, mentally adjusting their forecast figures up or down.</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">So how do we fix this issue? Most successful CRM projects now adopt an approach of trying to help customers fulfill their needs or wants – in other words the jobs they are trying to do. If we can help customers create value and be successful then we stand a much greater chance of building a mutually beneficial relationship. Exactly the same principle needs to be applied to employee sales people. When embarking on an SFA project we must understand how to create value for a sales person and one of the easiest ways of creating value is through information.</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">Several years ago I worked on an SFA project for a pharmaceutical company in Australia. Their typical profile of a sales rep was a 50-60 year old who travelled vast distances around country Australia, visiting pharmacy customers, whom they had known for many years, selling them over the counter medications. Most of the reps were superb sales people – they had amazing relationships with their customers, knowing every detail about the lives and businesses of the people they were dealing with. Two major problems existed. Firstly the reps had to do quite staggering amounts of admin (mainly faxing orders to wholesalers and chasing orders from wholesalers). Many reps stopped productive sales work at lunchtime and spent each afternoon doing admin. Secondly, the reps had no information about their customers other than that in their head. They had no idea which customers were the most profitable, which had the highest share of wallet, which switched suppliers frequently based on price promotions or what other dealings their customers had with the company e.g. with Finance. Finally, for additional context a significant proportion of the reps (say 20%) had very little IT experience. My advice to them was that they badly needed SFA but that SFA would kill their sales force. Instead of blindly rushing to roll out a laptop based SFA solution that at least 20% of the reps would not have been able to use, we took some time to understand the needs of the reps and how they worked. Of course when we spoke to them (and also their clients) they all wanted to reduce their admin time, they all wanted to be alerted when one of their major clients failed to pay on time, they all wanted to spot new opportunities to upsell additional products to their clients or find new opportunities, they all wanted to manage their time better and spend time on the things the activities that would increase their commission stream. In the end we implemented an SFA solution. But it was a very different SFA solution than you probably have in mind. Sure, it had many of the same features and functions but they were embedded within a simplified solution that added value to the rep and that the rep would actually want to use. For the 20% of reps who had literally never switched on a PC in their lives we set up a sales support desk. They carried on taking orders with pen and paper but before they visited a customer they phoned the sales support desk to get an update on any missing orders or payments. After the visit they phoned back and the sales support clerk typed in the orders as fast as they could speak – no faxes, no re-keying, no admin.</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">Now of course the example above is rather crude. The project won an award for the best CRM implementation in Australia (I think in 2003), but frankly we had a fairly easy opportunity to generate huge benefits given the lack of effectiveness within the sales force. Most sales forces today are far more sophisticated but similar problems still exist around admin time, lack of science in how reps treat different customers and lack of intelligence. Fundamentally reps in more sophisticated sales organizations still want the same things – “make it easier for me to sell”, “reduce my admin burden and help me make my commission targets”. In today’s “big data” world information and insight is key but we cannot expect our sales people to turn into data analysts. We must find ways of blending insight into SFA applications in ways that genuinely add value to sales people. For example our SFA systems should hide complexity of front / back office integration but:</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><ul><li><span style="text-indent: -18pt;" lang="EN-US">Supplement account knowledge, for example with information gleaned from social networking sites e.g. Fred used to work with Joe at ACME, he writes a blog about financial fraud etc. Information from social networking sites can be valuable in helping a sales person find and qualify a new opportunity or understand the relationship networks around a target account. Take a look at this whitepaper from InsideView for more information: <a href="http://www.insideview.com/resources/SocialMedia-DriveSales.pdf">“Sales 2.0: Tap into Social Media to drive Enterprise Sales Results”</a>.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Alert sales people to potential new opportunities based on patterns of what other customers are buying or what other successful reps are selling.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Show sales people how they are doing against targets and model commissions and how these will change based on different levels of quota achievement.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Predict the revenue and profitability impact of changing focus to a different account or set of activities.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Show how different competitors are impacting discounting, credits & losses and show how this impacts commission.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Model the impact of complex pricing changes to help structure deals better for customers, provider and of course sales rep.</span></li><li><span style="text-indent: -18pt;" lang="EN-US"><span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><span style="text-indent: -18pt;" lang="EN-US">Alert the sales rep to back office information that could be crucial in structuring a deal e.g. supply chain information that might prevent an order being shipped on time. This ensures that sales people make promises that they can deliver on, which in turn makes them more successful and saves them time and effort in re-visiting bad deals.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Connect the sales person to internal social networks and knowledge bases to find knowledge experts, peers or content easily. This can be extremely valuable for competitive information or sharing case studies of wins and losses.</span></li></ul><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">SFA implementations are tough. Sales people are notoriously protective of their account information and insight and bitterly resistant to admin and control, but information can be a key to unlocking value for both organization and rep.</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">This article was originally written to support SAP’s 21<sup>st</sup> Century Sales Warrior Guide. See <a href="http://saleswarriorguide.com/">http://saleswarriorguide.com/</a> </span></p><!--EndFragment-->Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-72381336750946756352012-06-07T18:50:00.001+01:002012-06-07T18:50:21.903+01:00Fixing Sales Force Automation<!--[if gte mso 9]><xml> </xml><![endif]--> <!--[if gte mso 9]><xml> Normal 0 false false false EN-US JA X-NONE </xml><![endif]--><!--[if gte mso 9]><xml> </xml><![endif]--> <!--[if gte mso 10]><style> /* Style Definitions */table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-parent:""; mso-padding-alt:0cm 5.4pt 0cm 5.4pt; mso-para-margin:0cm; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:Cambria; mso-ascii-font-family:Cambria; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Cambria; mso-hansi-theme-font:minor-latin; mso-ansi-language:EN-US;}</style><![endif]--> <!--StartFragment--><p class="MsoNormal"><span lang="EN-US"><img style="vertical-align: top;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhdTiSK81ZbYBZLnTZlUCL2vP2BuzSx8Vb744OGuaOjTZpTJAZ0gLQe5aCrN8SC5Xd6vO9RI6DreBgbnDTsqsBcdx3T9zquuSFm_dKNKSrS0bcxGttf1p_KYcY_QD9AaGHGjNQaAZe1v5SQ/" alt="" width="220" height="152" />For the past 15 years one of the most common causes of Sales Force Automation project failures has been that they have added approximately zero value to users. Most projects prioritized sales management first and sales people a distant second. SFA projects aimed to imprison sales people; tracking their daily activities, forcing them to give up the knowledge, scripting them through a sales process and creating admin for them. Is it any wonder that the majority of users treated these systems with utter contempt? I have spoken to countless sales people who looked upon their SFA systems as 2-3 hours of admin time per week, usually on a Friday afternoon.</span></p><p class="MsoNormal"><span lang="EN-US"><br /></span></p><p class="MsoNormal"><span lang="EN-US">Sales people who find themselves the victims of bad SFA implementations typically enter the bare minimum amount of information required to cheat their managers into thinking they were using the system effectively, paying particular attention to working out how best to game and not commit the ultimate sin of over-forecasting a deal. Despite the millions invested in SFA applications rogue pipelines in Microsoft Excel complimented by to-do lists on scraps of paper arguably remain the most widely used SFA platform today. Unfortunately this creates a vicious circle of failure. As soon as management start to mistrust the forecast coming from their SFA reports, they too start finding other ways of improving forecast accuracy. They arrange daily or weekly calls with sales people, drilling down on every aspect of a deal, mentally adjusting their forecast figures up or down.</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">So how do we fix this issue? Most successful CRM projects now adopt an approach of trying to help customers fulfill their needs or wants – in other words the jobs they are trying to do. If we can help customers create value and be successful then we stand a much greater chance of building a mutually beneficial relationship. Exactly the same principle needs to be applied to employee sales people. When embarking on an SFA project we must understand how to create value for a sales person and one of the easiest ways of creating value is through information.</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">Several years ago I worked on an SFA project for a pharmaceutical company in Australia. Their typical profile of a sales rep was a 50-60 year old who travelled vast distances around country Australia, visiting pharmacy customers, whom they had known for many years, selling them over the counter medications. Most of the reps were superb sales people – they had amazing relationships with their customers, knowing every detail about the lives and businesses of the people they were dealing with. Two major problems existed. Firstly the reps had to do quite staggering amounts of admin (mainly faxing orders to wholesalers and chasing orders from wholesalers). Many reps stopped productive sales work at lunchtime and spent each afternoon doing admin. Secondly, the reps had no information about their customers other than that in their head. They had no idea which customers were the most profitable, which had the highest share of wallet, which switched suppliers frequently based on price promotions or what other dealings their customers had with the company e.g. with Finance. Finally, for additional context a significant proportion of the reps (say 20%) had very little IT experience. My advice to them was that they badly needed SFA but that SFA would kill their sales force. Instead of blindly rushing to roll out a laptop based SFA solution that at least 20% of the reps would not have been able to use, we took some time to understand the needs of the reps and how they worked. Of course when we spoke to them (and also their clients) they all wanted to reduce their admin time, they all wanted to be alerted when one of their major clients failed to pay on time, they all wanted to spot new opportunities to upsell additional products to their clients or find new opportunities, they all wanted to manage their time better and spend time on the things the activities that would increase their commission stream. In the end we implemented an SFA solution. But it was a very different SFA solution than you probably have in mind. Sure, it had many of the same features and functions but they were embedded within a simplified solution that added value to the rep and that the rep would actually want to use. For the 20% of reps who had literally never switched on a PC in their lives we set up a sales support desk. They carried on taking orders with pen and paper but before they visited a customer they phoned the sales support desk to get an update on any missing orders or payments. After the visit they phoned back and the sales support clerk typed in the orders as fast as they could speak – no faxes, no re-keying, no admin.</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">Now of course the example above is rather crude. The project won an award for the best CRM implementation in Australia (I think in 2003), but frankly we had a fairly easy opportunity to generate huge benefits given the lack of effectiveness within the sales force. Most sales forces today are far more sophisticated but similar problems still exist around admin time, lack of science in how reps treat different customers and lack of intelligence. Fundamentally reps in more sophisticated sales organizations still want the same things – “make it easier for me to sell”, “reduce my admin burden and help me make my commission targets”. In today’s “big data” world information and insight is key but we cannot expect our sales people to turn into data analysts. We must find ways of blending insight into SFA applications in ways that genuinely add value to sales people. For example our SFA systems should hide complexity of front / back office integration but:</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><ul><li><span style="text-indent: -18pt;" lang="EN-US">Supplement account knowledge, for example with information gleaned from social networking sites e.g. Fred used to work with Joe at ACME, he writes a blog about financial fraud etc. Information from social networking sites can be valuable in helping a sales person find and qualify a new opportunity or understand the relationship networks around a target account. Take a look at this whitepaper from InsideView for more information: <a href="http://www.insideview.com/resources/SocialMedia-DriveSales.pdf">“Sales 2.0: Tap into Social Media to drive Enterprise Sales Results”</a>.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Alert sales people to potential new opportunities based on patterns of what other customers are buying or what other successful reps are selling.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Show sales people how they are doing against targets and model commissions and how these will change based on different levels of quota achievement.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Predict the revenue and profitability impact of changing focus to a different account or set of activities.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Show how different competitors are impacting discounting, credits & losses and show how this impacts commission.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Model the impact of complex pricing changes to help structure deals better for customers, provider and of course sales rep.</span></li><li><span style="text-indent: -18pt;" lang="EN-US"><span style="font-family: 'Times New Roman'; font-size: 7pt;"> </span></span><span style="text-indent: -18pt;" lang="EN-US">Alert the sales rep to back office information that could be crucial in structuring a deal e.g. supply chain information that might prevent an order being shipped on time. This ensures that sales people make promises that they can deliver on, which in turn makes them more successful and saves them time and effort in re-visiting bad deals.</span></li><li><span style="text-indent: -18pt;" lang="EN-US">Connect the sales person to internal social networks and knowledge bases to find knowledge experts, peers or content easily. This can be extremely valuable for competitive information or sharing case studies of wins and losses.</span></li></ul><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">SFA implementations are tough. Sales people are notoriously protective of their account information and insight and bitterly resistant to admin and control, but information can be a key to unlocking value for both organization and rep.</span></p><p class="MsoNormal"><span lang="EN-US"> </span></p><p class="MsoNormal"><span lang="EN-US">This article was originally written to support SAP’s 21<sup>st</sup> Century Sales Warrior Guide. See <a href="http://saleswarriorguide.com/">http://saleswarriorguide.com/</a> </span></p><!--EndFragment-->Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-4756727506836166952012-05-16T09:57:00.001+01:002012-05-16T13:10:42.118+01:00Moving from tactical social media experiments to social business transformation<img alt="" height="150" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjzUnP1NEtj9fq7wMaGJDMvjl7P5hDZzmQEEE3aLtVZrFgO6cov21putEt5eCA98Fvvv8YpufClhk7eQGAMpcZyEwNNYW1sWmfcBHDnHYkAHRnGVeheg8GbXNRxMq4ThlHuzMRYWF1uizUu/" width="200" />The elephant in the social media room at the moment is that most corporate social media initiatives to date have been tactical experiments. Of those, few have generated meaningful business results. Sure, people have built up Facebook Fans and Twitter followers or they have launched the odd viral video on YouTube. They have claimed these as a success, but in reality these metrics should never be the end goal. The age of tactical experimentation has been characterized by:<br />
<ul>
<li><span lang="EN-US" style="text-indent: -18pt;">A focus on so-called “engagement metrics” i.e. likes, followers, re-tweets etc. over real business outcomes.</span></li>
<li><span lang="EN-US" style="text-indent: -18pt;">An obsession with vanity buzz monitoring, with far too little attention given to data accuracy, data integration, insights and, most importantly, action.</span></li>
<li><span lang="EN-US" style="text-indent: -18pt;">An explosion of rogue corporate social media accounts, created to support any promotion, product, department or individual employee who wants to add a social element to their portfolio (a recent client had at least 114 disconnected Facebook , Twitter and YouTube accounts a recent Forbes article suggested that organisations with over 1000 employees likely have over 170 social media accounts </span><a href="http://tinyurl.com/6peo9ox" style="text-indent: -24px;">http://tinyurl.com/6peo9ox</a></li>
<li><span lang="EN-US" style="text-indent: -18pt;">Silos between corporate social media accounts, silos between social media accounts and enterprise systems and silos between customers, employees, departments and partners.</span></li>
</ul>
<div class="MsoNormal">
<span lang="EN-US">A relatively small number of companies have pushed things further and achieved real, transformational results. Start-ups like <a href="http://giffgaff.com/">Giffgaff</a>, who have pushed the concept of <a href="http://thecustomerevolution.blogspot.co.uk/2010/12/giffgaff-case-study-of-customers-in.html">customer community in control</a> further than anyone else in the Telco industry with tangible results (their customer service costs are an estimated 4 times below industry average and word of mouth acquisitions are around 5-7k per month). <a href="http://www.zappos.com/">Zappos</a> (now owned by Amazon), whose focus on service and experience pioneered an entire movement called <a href="http://www.deliveringhappiness.com/">Delivering Happiness</a>. Or large organisations like Proctor & Gamble whose Connect-and-Develop program allows idea co-creation with third parties and enables them to crowd-source solutions to fix some of its most complex R&D issues. Similarly, the Dutch airline KLM, who have embraced social with great success. Their KLM Clubs <a href="http://www.flyingblueclubchina.com/">China</a> & <a href="http://www.flyingblueclubafrica.com/">Africa</a> have allowed them to build communities for entrepreneurs travelling to emerging markets with KLM, creating additional value for club members way outside what you would usually expect. Their campaigns, like <a href="http://www.youtube.com/watch?v=pqHWAE8GDEk">“Surprise”</a> and <a href="http://www.klm.com/corporate/en/newsroom/press-releases/archive-2012/With_Meet_Seat_KLM_integrates_social_media_with_air_travel.html">“Meet and Seat”</a> are both innovative and differentiate the airline’s brand in a crowded market place. They are not simply one-off social campaigns, “social” is more widely embedded within KLM’s DNA.</span> </div>
<div class="MsoNormal">
<span lang="EN-US">What ties these companies together is that:</span></div>
<ul>
<li><span lang="EN-US" style="text-indent: -18pt;">They are an over-used collection of examples – it’s sad but true; social business success is still not the norm.</span></li>
<li><span lang="EN-US" style="text-indent: -18pt;">Their success has moved beyond a single social media campaign or departmental initiative – P&G’s success for example relies on connecting Marketing with Product Development, GiffGaff ties together Marketing, Sales & Service - all are led by their community. Zappos pioneered the concept of “everyone is in service”.</span></li>
<li><span lang="EN-US" style="text-indent: -18pt;">They have not just adopted “social” technologies, but they have embraced a social mindset. One of outside-in, customer-centric thinking </span></li>
<li><span style="text-indent: -18pt;">Often they have not referred to the things they are doing as “social” – after all, we have always been “social” - rather, they talk about higher-principles like “customer in control” or “delivering happiness”.</span></li>
</ul>
<div class="MsoNormal">
<span lang="EN-US">Most large enterprise clients I meet acknowledge that the age of social media experimentation is now coming to an end. They want practical advice as to how to move from social media experimentation to social business transformation. Having worked for the last few months with a FTSE 100 client on just such a challenge, I can say with certainty that this is not an easy task. Social can be in direct conflict to many ingrained aspects of a firm, including:</span></div>
<ul>
<li><span lang="EN-US" style="text-indent: -18pt;">Business model – the ability to digitize products and distribute them at mass scale or to a micro niche (both enabled by social networks) can radically challenge an existing business model.</span></li>
<li><span lang="EN-US" style="text-indent: -18pt;">Culture & mindset – one thing that is clear from the failure of many social media experience is that applying an inside-out mindset to social can backfire spectacularly. Think of the way in which some companies have tried to control everything that is being said about them online – deleting negative comments or worse still posting fake reviews. Inevitable this mindset of command and control has not worked in the digital world.</span></li>
<li><span lang="EN-US" style="text-indent: -18pt;">Technology – The pace of change within social technology is so fast that it places huge pressure on the traditional IT operating model. See my post on <a href="http://thecustomerevolution.blogspot.co.uk/2011/12/what-comes-next-after-facebook-and.html">“What comes next after Facebook and Twitter. The challenge of keeping up in a constantly changing digital world.”</a></span></li>
<li><span lang="EN-US" style="text-indent: -18pt;">Business Operating Model – perhaps the toughest and most under-appreciated challenge of social is to the business-operating model. They way people are incentivized, reporting lines, business objectives, ways of working can be placed under intense pressure by social. I have seen countless scraps between departments trying to “own” social media as well as finger pointing between silos each blaming the other for a failed campaign.</span></li>
</ul>
<div class="MsoNormal">
<span lang="EN-US">So how do you progress? Of course every company will be in a slightly different situation, but typically it’s probably worth at least getting a handle on all the tactical experiments you currently have in progress; at the very least understanding who is doing what, what’s working and where the dangers are. Secondly, any transformation requires a compelling need for change; one that is clear, visible and supported at both exec and employee levels. Often the compelling event may be external, for example from customers demanding change, from a new market opportunity that galvanizes action or from the threat of a disruptive competitor. Thirdly, start with people, mindset and culture before tools (most people have over-invested in tools and under-invested in the complimentary capabilities required to obtain value from the tools – I know of a firm with 6 internal collaboration tools who still struggles to collaborate internally). In particular focus on the challenging mindset shift from <a href="http://thecustomerevolution.blogspot.co.uk/2009/12/social-crm-shift-from-inside-out-to.html">inside-out to outside-in</a>, starting with the customer. Fourthly test, learn and iterate. – another concept that is much easier said than done in most organizations where short term success is celebrated and failure punished.</span></div>
<div class="MsoNormal">
<span lang="EN-US">The path to social business success is certainly not an easy one, as demonstrated by the lack of end-to-end examples that exist today, but as we move through the social wave of hype I have no doubt we will see more successes and less throw-away experiments.</span></div>
<div class="MsoNormal">
<em><span lang="EN-US">This post was written to support the <a href="http://www.socialbusinessstrategysummit.com/">Social Business Strategy Summit</a> 31<sup>st</sup> May 2012</span></em></div>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-10526610528081918032012-05-04T09:54:00.001+01:002012-05-08T07:44:30.384+01:00Why CRM Idol matters to EMEA software companies<img alt="" height="156" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhwq8PiVsHPRHAXpaTSAZ3HmZ7xLhZPrh6lA-3JEOcNqL1X5r5YubW3hI7xo2mEM-MdyQxtnnk3FxE2WgJrj_8GbZ8LJPSWOtJzC5GtlZ5v3tvsIk1rvz30Yii1VfRaNzhemwZVu_VstRX7/" width="166" />Earlier this week Paul Greenberg <a href="http://www.zdnet.com/blog/crm/crm-idol-2012-the-second-season-is-here-cue-the-music/4526?tag=mantle_skin;content">announced the second season of CRM Idol</a>. This year the competition has gone global with categories in the US, EMEA and Asia / Australasia. I’m delighted to be one of the 4 <a href="http://www.crmidol.com/judges/primary">primary judges</a> in EMEA. Last year was an eye-opening experience both for contestants and judges alike in EMEA. <a href="http://www.bpmonline.com/">BPMonline</a>, a SaaS vendor combining CRM and BPM, blew the panel of extended judges away with their final presentation and won the competition. To be frank, I’d never heard of BPMonline before CRM Idol 2011, but in my mind that’s the point – I’d been missing out.<br />
<div class="MsoNormal">
<a href="http://www.crmidol.com/judge/paul-greenberg">Paul Greenberg</a> introduced CRM Idol, in his words, to “give something back to the CRM industry” and to “give up and coming CRM vendors a chance to shine” that they wouldn’t normally get. Paul has given more to the CRM industry than anyone I know, so he really doesn’t need to worry about the first point, but his second point hits the nail on the head. Having spent nearly 15 years working both for and with enterprise CRM software vendors I know full well that much of the innovation that happens in the CRM market happens outside the development labs of the big few. That’s not to say that they don’t innovate, but many have major development challenges to integrate newly acquired products, re-platform their on-premise solutions to SaaS, migrate customers from old versions of their product to the latest release – these initiatives quite rightly suck up vast amounts of development resource and ensure they stay competitive in the market.</div>
<div class="MsoNormal">
<span lang="EN-US">By their very nature, start-up software vendors simply don’t have these challenges. They start from a clean sheet of paper, using the latest technology and standards. They are agile in every sense of the word responding to customer and market trends in near real time and often releasing new iterations to their products on a weekly basis. They tap into the latest thinking in open-source communities, launch-pads and co-working facilities. In short, the start-ups have an opportunity to do things that large enterprise software vendors can only dream of. Many create new categories of software and go on to great things, others compliment the eco-systems of the big few providing niche, value-added solutions. But each face a challenge 12 months or so into development – that of getting noticed in a crowded market.</span></div>
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<span lang="EN-US">Although the CRM software market has historically be centered around Silicon Valley (Siebel, Salesforce.com, SAP Labs Paolo Alto), Europe is blessed with some real hot-beds of technology innovation. From web developers in Tallinn to semantic scientists in Tel Aviv, to IP Telephony pioneers in Helsinki, EMEA is a great place to be. EMEA also has a thriving Digital heart in London’s Shoreditch around the so-called <a href="http://en.wikipedia.org/wiki/Old_Street_Roundabout">Silicon Roundabout</a> that has given birth to hundreds of tech start-ups like <a href="http://www.tweetdeck.com/">Tweetdeck</a>, <a href="http://www.dopplr.com/">Dopplr</a> and <a href="http://www.last.fm/">Last.fm</a>. CRM Idol gives those vendors connected with the CRM industry a chance to show their wares to 70 or so of the most influential independents in the CRM / SCRM market – people like <a href="http://www.crmidol.com/judge/denis-pombriant">Denis Pombriant</a>, <a href="http://www.crmidol.com/judge/esteban-kolsky">Esteban Kolsky</a>, <a href="http://www.linkedin.com/in/rwang0">Ray Wang</a>, <a href="http://www.linkedin.com/in/mfauscette">Michael Fauscette</a> & <a href="http://www.linkedin.com/pub/william-band/0/1b3/611">William Band</a> have been driving thought-leadership in the CRM industry for the best part of 20 years. In addition, there are some valuable prizes to be won like free consulting days, pitches to venture capital firms and free lead-gen webinars.</span></div>
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<span lang="EN-US">So if you are a small, innovative vendor in EMEA connected with the CRM market I would encourage you to take a look at the entry criteria for <a href="http://www.crmidol.com/">CRM Idol 2012</a> and <a href="http://www.crmidol.com/contestant-submission">register online</a>. What have you got to lose?</span></div>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-55184012934011134692012-03-01T11:08:00.005+00:002012-03-01T11:12:32.415+00:00Re-intermediation on steroids?<img alt="" height="151" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgyOXJJV0amyFgKESXcmSjHRHbLe-Vb94Iu1Vq41VOSbNhuJBXFmx1tqVaLtO4p7hginvSOs2zldLmWxce42760EyUmmU4Oxje78H06Bj6LEtONQZxOnZ7pg5WxehTSpRuG6d50tfVcPVkX/" style="float: left;" width="200" /><br />
There was a popular myth in the late 1990’s that the e-commerce revolution would lead to the death of the intermediary. Why buy a holiday through a travel agent, insurance through a broker or a property through an estate agent when you can go direct? Or so the logic went. Michael Hammer writing for Information Week back in July 2000 called this out in his article <a href="http://www.informationweek.com/794/94uwmh.htm">“The myth of disintrmediation”</a> he wrote:<br />
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</div><div class="MsoNormal" style="margin-bottom: .0001pt; margin-left: 36.0pt; margin-right: 46.45pt; margin-top: 0cm;"><em><span lang="EN-US">“Today, disintermediation is supposedly dooming distributors, retailers, wholesalers, and all other intermediaries between manufacturers (or service providers) and the ultimate customer… A more reasoned view of the impact of the Internet on distribution channels is that it will transform but not eliminate them. The reality is that customers need a significant amount of value to be added to most products before they can buy and use them. Think about an air-conditioning system: A customer needs help to determine how much air conditioning he or she requires, which system to buy, and what related products--duct work, for instance--are needed. The customer also will likely need help installing and maintaining the system. Who is going to provide all this value? Certainly not the manufacturer, which has no local presence and may not have all the needed skills. This value needs to be provided by the distribution channel, which is here to stay, but not in its current form.”</span></em></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US">12 years later, those intermediaries that failed to adapt have indeed vanished from the high street, but by in large those intermediaries that have survived (and often thrived) have re-invented themselves and focused on the simple question of how they can add value to the end customer. See my post on <a href="http://thecustomerevolution.blogspot.com/2010/12/amazing-customer-service-from.html">Flightcentre</a> from last year as an example of an intermediary going the extra mile to add value to the end consumer.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US">Moreover, since the disintermediation myth. we have seen the rise of giant mega-intermediaries; think of Amazon, Google, eBay –all have grown to multi-billion dollar companies since 2000. In addition we have seen online price comparison sites like MoneySupermarket, uswitch and Pricerunner and online review sites like Tripadvisor and Yelp grow at pace and significantly disrupt industries like banking, insurance and travel. In a very short time frame we have experienced re-intermediation on steroids.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US">So where is re-intermediation heading? I still think we have much further to go. Re-intermediation will be driven further by big data and real time access. Take the mobile phone industry for example – huge amounts of data exist on both call patterns and on tariff structures, yet most intermediary activity focuses only on the point of contract renewal i.e. it’s very easy for consumers to get a better deal when they switch tariffs once a year but that’s about it. Taking better advantage of data and real time access would see a intermediary analyzing my calls at the point that I make them and finding me the best tariff to make that call – imagine a price comparison SIM card?! Even better (to pick a particular pet peeve of mine) one that works overseas and avoids excessive roaming charges… ok – perhaps that’s going too far!</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US">Alternatively take the Television industry. Over the next few years I suspect we will see an increased battle for content rights as both cable TV companies and OTT players battle for exclusive content. This could mean a bidding war between the cable TV companies and the likes of Netflix, Amazon (LoveFilm), Sony, Apple, Tesco (Blinkbox) and others for movie or sports rights. In the short term this could make for a frustrating customer experience – do I really want to subscribe to 5 different streaming providers? Enter the intermediary. The promise of <a href="http://www.google.com/tv/">Google TV</a> (or other services like it) is to help consumers find content across multiple providers to learn about their tastes (and maybe their friends tastes) to help them watch what they want. Again there is potential for a powerful intermediary to grow and disrupt an industry.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US">This “re-intermediation on stedoids” will place huge pressure on those at the beginning of the supply chain. To thrive and take advantage of intermediaries will require:</span></div><div class="MsoNormal"><span style="text-indent: -18pt;"><br />
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<span style="text-indent: -18pt;">1. Strong insight into the end consumer – see my post on the opportunities presented by the combination of broadband, hardware device explosion, cloud computing, apps & social networks. Together these provide new ways to connect to consumers on their terms, collect huge amounts of data (ideally with their permission and also on their terms!) and better meet customer needs.</span><br />
<span style="text-indent: -18pt;">2. A unique product offering (e.g. innovative media content that people want to consume or an artisan product). </span><a href="https://twitter.com/#!/ekolsky" style="text-indent: -18pt;">Esteban Kolsky</a><span style="text-indent: -18pt;"> recently pointed me at this great story on </span><a href="http://www.npr.org/blogs/money/2012/02/24/147291416/a-revival-in-american-manufacturing-led-by-brooklyn-foodies" style="text-indent: -18pt;">“A revival in American Manufacturing, Led by Brooklyn foodies”</a><span style="text-indent: -18pt;">; a superb reminder of Chris Anderson’s </span><a href="http://en.wikipedia.org/wiki/Long_Tail" style="text-indent: -18pt;">long tail</a><span style="text-indent: -18pt;"> in action.</span><br />
<span style="text-indent: -18pt;">3. Flexible pricing – the airline industry seems to lead the way in constantly changing ticket prices based on demand, fuel costs and market conditions yet other industries lag far behind and are unable to change their pricing in months. In a world of big data and intermediaries Customers will want to pay for what they use, when they use it and get the best deal at that time rather than being locked into long contracts. Pricing therefore needs to be dynamic enough to be changed and adapted at speed.</span></div><div class="MsoNormal"><br />
</div><div class="MsoNormal"><span lang="EN-US">Re-intermediation is nothing new but I suspect it has much further to travel. How well prepared are you?</span></div>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-64487351628989082212012-02-23T11:28:00.004+00:002012-02-23T11:30:52.731+00:00Don’t let a millennial determine your strategy<img alt="" height="131" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhzyCV9z3TKDPMbFPM-MoOnjsje3xlSZiK8hf11M4tvqVjTfvelpzgyPYw9xKHV4_3ooAVcKouepPVjC1Ylibpv4gAG3LGXSCihSZmIPTQXwbecNS3reshC2K95cSQKpujb8Tze_sIemD3o/" style="float: left; vertical-align: top;" width="200" /><br />
<a href="https://twitter.com/#!/marktamis">Mark Tamis</a> wrote a hype-busting piece this week entitled <a href="http://marktamis.com/2012/02/21/go-with-the-customer-flow/">“go with the customer flow”</a>. He pointed out that currently only 1% of company / customer interactions take place on social media in France (Les Echos). Yet many businesses are getting caught up with “shiny object symptom”, focusing on the 1% channel and “ignoring the rest of the engagement platform”. Spot on.<br />
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</span></div><div class="MsoNormal"><span lang="EN-US">Building on Mark’s logic, I’m often concerned by companies who try and re-invent themselves by focusing on or piloting an new initiative with Gen Y / Millennials. These are the digital natives, the logic goes… the ones who have created a connected, always-on world. What better place to pilot our shiny new social engagement strategy?</span><br />
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</span></div><div class="MsoNormal"><span lang="EN-US">Time for a reality-check. To be clear, I have no problem at all with Millennials, they represent a vibrant, innovative segment and one that can reap huge rewards if you are able to engage with them successfully and on an ongoing basis. But they are also the most over-targeted segment of our time. It seems that suddenly everyone wants to create Millennial super-fans who blog, tweet, answer support questions in a forum and create viral YouTube videos on the company’s behalf. As a category Millennials are swamped with offers and are notoriously fickle in swarming from one offer / device / network to the next (Groupon coupon anyone???). Their loyalty is extremely difficult to attain and on average their disposable incomes are relatively low, compared to other segments of the market.</span><br />
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</span></div><div class="MsoNormal"><span lang="EN-US"><a href="https://twitter.com/#!/grahamhill">Graham Hill</a> pointed me to research from David Demery and Nigel W. Duc on <a href="http://www.efm.bris.ac.uk/economics/working_papers/pdffiles/dp03550.pdf">Demographic change in the UK</a>. The research is few years old now but it states that by 2025 the largest age groups (at least in the UK) will be aged 45-65 (27%) followed by those aged 65 and over (20%). In addition, the fastest growing age groups will be aged 65 or over followed by those aged 45-65. The smallest and fastest shrinking age group are those aged up to 30 (only 16%). On that basis the 45s and over are where the growth is and where the money is. As Graham Hill says “it's time to move beyond the Millenial hype and focus on demographic and monetary reality of an aging, cash-rich and increasingly time-rich population".</span><br />
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</span></div><div class="MsoNormal"><span lang="EN-US"><a href="https://twitter.com/#!/tom_peters">Tom Peters</a> adds another dimension in his book <a href="http://www.amazon.co.uk/Little-Big-Things-Pursue-Excellence/dp/0061894087">”The Little Big Things”</a>. He points out that the two most powerful markets that most companies ignore are women and boomers/geezers. “The boomer-geezer market is exploding around the world – and is ridiculously under-served: “What an opportunity for the next 25 years – in fact, market opportunity #1”. The sweetest market, he says, is baby boomer women, quoting the brilliant article in the Economist <a href="http://www.economist.com/node/6800723">“The importance of sex”</a> which leads with the provocative opening line “Forget China, India and the internet: economic growth is driven by women”.</span><br />
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</span></div><div class="MsoNormal"><span lang="EN-US">Moreover, digital is not exclusively the domain of Millennials. In their 2009 research <a href="http://www.forrester.com/rb/Research/broad_reach_of_social_technologies/q/id/55132/t/2">“The Broad Reach of Social Networks”</a>, Forrester state that seventy per cent of online adults aged 55 and older tap social tools at least once a month. People over 34 have become the largest segment using Facebook and much of te growth in social networking usage is being driven by people over 34.</span><br />
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</span></div><div class="MsoNormal"><span lang="EN-US">Before you rush to create target personas who live and breath digital, start with the basics of customer strategy by analyzing your total target market, defining your unique customer value proposition and thinking outside-in about how you can help your customers segments create value. Millennials may seem like an attractive starting point but they are not the only game in town and they certainly aren’t the only segment that has embraced digital.</span></div>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-683942071949506492012-02-03T10:53:00.001+00:002012-02-03T10:53:22.847+00:00BB+HW+CC+A&SN=D&O<p><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh9brR05qBh_dZxkcsvLuj4Y0wASwE560opD__WRXyzGOklsu_rnkWsmZ0zqk109QtpPAExQpcNHGrDC7gqe7qsb38Lw1isaNU3_7wzsjlXVRBP7POcVUBbZrBwm_fyIGp1M0N2EH9oBFpd/" alt="" />Last night I had the pleasure of presenting at a Keble College alumni event for entrepreneurs. The main focus of the event was for alumni entrepreneurs to showcase their start-ups and it was great to see the success of start-ups like <a href="http://meetthebulldog.com/">Bulldog</a> (Simon Duffy) and <a href="http://themobankapp.com/">Mobank</a> (Ben Carswell). I really have a huge amount of respect for entrepreneurs who have thrived in such difficult economic times.</p><p class="MsoNormal"><span lang="EN-US">Not being an entrepreneur myself, I had to take a different tack in my presentation. I focused instead on describing some of the market themes and opportunity areas that I see for businesses. Notes from my presentation are as follows.</span></p><p class="MsoNormal"><span lang="EN-US">BB – over the last 10 years we have seen the mass roll-out of broadband connectivity. Slow dial up lines have given way to fiber-optic superfast broadband, which in turn will be replaced by even faster networks.</span></p><p class="MsoNormal"><span lang="EN-US">HW – the last 10 years has also seen an explosion of hardware devices that tap into that broadband connectivity. Product lifecycles have shortened as has the time to mass adoption of blockbuster devices. For the last few years Apple have trailblazed the market inventing entirely new product categories but the Android eco-system are snapping at their heels. The range of connected devices is also extending to include TVs, cars, household appliances etc</span> </p><p class="MsoNormal"><span lang="EN-US">CC – Nicolas Carr brilliantly described the emergence of cloud computing in his book <a href="http://www.amazon.co.uk/Big-Switch-Rewiring-Edison-Google/dp/0393062287">“The Big Switch”</a>. He uses the analogy of switching electricity generation from individual turbines to the grid to describe the ability to leverage cloud computing to rent storage, computing power, applications and development platforms from the cloud.</span></p><p class="MsoNormal"><span lang="EN-US">A&SN – Apps and Social Networks have radically changed the way we interact with information and with other people. They have placed unprecedented knowledge and connectivity into the hands of users .</span></p><p class="MsoNormal"><span lang="EN-US">D&O – the combination of the above has created both disruption and opportunity. Many businesses have struggled to keep up with the rate of change, whilst others have thrived.</span></p><p class="MsoNormal"><span lang="EN-US">I then described three opportunity areas (deliberately ignoring mobile which was already covered during Mobank’s presentation).</span></p><p class="MsoNormal"><span lang="EN-US">Opportunity area 1 – Customer-driven businesses. Many businesses pay lip service to customer-centricity. The words are there but the reality is that they are customer-centric when they want customers to buy from them (the last few days of the quarter) or when they are trying to shift customers to a lower cost service channel. GiffGaff, Threadless, Zappos and others have focused on a customer-driven approach, building customers into their operating model and being driven by their needs. See my write up of <a href="http://thecustomerevolution.blogspot.com/2010/12/giffgaff-case-study-of-customers-in.html">GiffGaff</a>.</span> </p><p class="MsoNormal"><span lang="EN-US">Opportunity area 2 – Service aggregators. One of the opportunities presented by cloud computing is that you don’t need to build everything yourself. Some businesses are moving faster and punching above their weight by combining multiple services from the cloud. Take, Zestia, for example, a tiny CRM software company recently profiled by <a href="http://www.crmidol.com/reviews/zestia">CRM Idol</a>. They have built out a CRM offering with just a handful of developers, focusing instead on integration to existing services, rather then building everything from scratch themselves.</span></p><p class="MsoNormal">Opportunity area 3 – Data. It’s almost a cliché at the moment to call data “the new oil”. However, unparalleled opportunities exit for businesses to collect vast quantities of tiny pieces of information (think check-ins, likes, Tweets, photos of pot-holes in the street, blood pressure readings from an iphone app). The value of the information lies in its aggregation. To use a simple example, think of the way the property site, Rightmove, combines Google Maps with information from Realtors to mash properties for sale onto a map. Or take the way <a href="http://www.google.org/flutrends/">Google Flu</a> aggregates web searches for flu to try and predict which regions will suffer from flu outbreaks. Vicks recently used insight from Google Flu to drive their marketing spend for a new <a href="http://www.psfk.com/2012/01/vicks-google-flu-prediction-campaign.html">digital thermometer</a>.</p><p class="MsoNormal">I finished with a short quote from Jack Welch that I have used in this blog a number of times. He said of GE: “we only have two sources of competitive advantage; the ability to learn more about our customers faster than the competition, and the ability to turn that learning into action faster than the competition”. It strikes me that today’s entrepreneurs have more opportunity that Jack Welch ever imagined.</p><p class="MsoNormal"><span lang="EN-US">Many thanks to Duncan Macintyre from Keble College for inviting me to present and thanks to all who attended.</span></p>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-46626781939706946392011-12-19T16:39:00.001+00:002011-12-19T16:39:13.713+00:00What comes next after Facebook and Twitter? The challenge of keeping up with a constantly changing digital world<p><span style="font-family: Arial;"><img style="float: left;" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj7HgUjwlkFcBK4MEjOAsdkteBXhkMNPdUGuQF5MwCyx7iVw48z6w1Y64DS0E11poPiRS9c6nO9foO24-Vbl8FKClpDHF6UYDBLYlAMTEz4dElenwGlp08bXtJZdsRC9JzlPPYdA_GVWz_4/" alt="" width="512" height="202" /><span style="font-size: small;">Note - I originally posted a short version of this post in </span></span><span style="font-size: small;"><a style="font-family: Arial;" href="http://thecustomerevolution.blogspot.com/2011/05/what-comes-next-after-facebook-and.html">July</a><span style="font-family: Arial;">.</span></span></p><p class="MsoNormal"><span style="font-size: small;"><span style="font-family: Arial; mso-bidi-font-family: Arial;">The </span><span style="font-family: Arial;">last 5-10 years have been characterised by a communications revolution. During that time we have seen the mass roll out of broadband and mobile broadband, an explosion of new hardware devices that tap into that connectivity and an explosion of software-as-a-service (SaaS) solutions, apps and social networking sites that have transformed the way people interact with data and processes. Together these changes have given users unprecedented access to information and connectivity to peers, transforming the way we complete tasks and transforming many different types of relationships from consumer to employee to supplier. Fundamental human behaviors may not have changed much – we have always been “social” - what has changed however is connectivity, access, transparency, speed and scale.</span></span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">The communications changes we have seen do not represent a single one off disruption. If the last five years have taught us anything it is that constant disruptive change is here to stay. Think about the rapid rise and fall of mySpace and SecondLife, the speed at which Twitter has grown, the rapid evolution of Facebook from a college social network into a social commerce platform, or the extent to which the tablet PC has entered our daily lives. It seems that almost every week a new disruptive hardware device is being launched or a new social network or online game has spread like wildfire and carved out a new niche in the market.</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">For most businesses the changes in communications and the constant disruption that we have seen present both opportunity and threat. On one hand, those that can move fast are taking advantage of new devices and platforms to create new business models or new marketing, sales, service and R&D platforms. GiffGaff, for example, an MVNO in the Telco industry (with a total staff of just 14 employees) has created a community-driven business model that incentivises consumers to contribute to product development (tariff structures), customer acquisition and customer service. GiffGaff customers contribute to product development (one of their customers even built them an iPhone app!), they generate between 5-7k new acquisitions per month purely from word of mouth marketing and they fix 90% of service problems with an average response time of under three minutes within the community support forum.</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">Other digital start-ups are being equally disruptive. Think of the “mesh-business” that ZipCar or Streetcar have created and the way that they have disrupted the car rental industry; or look at how Netflix or the Huffington Post have disrupted the media industry (as I write, Netflix looks like it may also be disrupted; partly through its own doing and partly through the start-up of streaming only platforms with no legacy in DVD distribution). Or consider, micro-finance companies like Kiva, which is generating millions of dollars of loans per month and transforming access to funding for people who otherwise would have no access to banking services.</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">Businesses taking advantage of digital disruption are not just limited to start-ups. Consider how Proctor & Gamble engage with hundreds of thousands of mothers on the Mumsnet social network and on its homegrown social networks to develop new product ideas and test new concepts. Proctor & Gamble’s Connect-and-Develop program allows idea co-creation with third parties and enables them to crowd-source solutions to fix some of its most complex R&D issues. Similarly, KLM, the Dutch airline has also embraced new digital technologies and platforms with great success. Its KLM Clubs China & Africa have allowed it to build communities for entrepreneurs travelling to emerging markets with KLM, creating additional value for club members way outside what you would usually expect. Even BT, often criticised (perhaps unfairly) for lacking innovation, has been a pioneer in online self-service, community and social media customer care. Its BT Care team actively monitors social networks, reaches out to customers to offer support. It has also focused on building an online community to facilitate peer-to-peer support, deflecting calls from its contact centres.</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">On the flip side, many IT departments are struggling to keep up with the constant game of catch up. Picture the corporate IT department burdened with a huge maintenance overhead now overwhelmed with a backlog of requests to support the latest Apple device, the latest app or the latest social network. In addition, corporate IT looks aghast at employees connecting their own devices to corporate systems, departments creating their own social media sites and lines of business managers purchasing software-as-a-service solutions and putting the subscription costs onto their expenses account. Many IT departments have simply lost control and are struggling to embrace new digital technologies and ways of working. Most are trying to re-establish their value to the business, fully aware that IT departments that fail to add value to the business run the risk of making themselves irrelevant and perpetuating the cycle of rogue purchasing, data silos and an inconsistent, disconnected user experience.</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">The problem of catch-up is not limited to the IT department. In exactly the same way those businesses that fail to keep up with consumers run the risk that their own customers will simply disengage and swarm on to a competitor that supports the latest device, app or social network. Constant change can be just as much a headache for the business as it is for the IT department, as keeping up with the constantly changing consumer requires keeping a strong finger on the pulse of the consumer, as well as being agile enough to change plans on the fly without creating chaos.</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">Within this environment of uncertainly it’s tempting to try and form predictions of what might happen next; for example, what will come after Facebook or Twitter? Whilst I am all for creating a compelling vision, planning and keeping a finger on the pulse of the changing communications happening right now, I suspect that for the majority of organisations, the reality is that thinking about what comes after Facebook and Twitter might be entirely the wrong question.</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">We don't yet know what will come next after Facebook and Twitter. We don't know what disruptive device will be launched next by Apple or another hardware manufacturer. We don't know what game changing moves Google or Facebook will make next; nor do we know what new social network or online game is currently being dreamt up by a college student in San Francisco, London, Tel Aviv or Bangalore. What we do know is these things will happen. What we do know is that constant disruptive change is now the norm and that without question each change will have an impact on the way that consumers (feel free to substitute with employees, suppliers, analysts etc) interact with companies, data, processes and of course, with each other.</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">Better (and potentially tougher) questions to think about might be:</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">1. How can we build stronger customer relationships based on true value co-creation that will be less susceptible to cannibalization by passing fads?</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">2. How can we keep track of where our customers are currently engaging with our brand and with each other? How can we spot changes, trends and spikes?</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">3. How can we cut through vast quantities of unstructured customer data with accuracy and drive insight into action faster than the competition?</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">4. How quickly can we embrace change within our organisation and execute on opportunities that we have spotted?</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">5. How can we leverage innovation from our customers and partners as well as from the vast armies of open source, SaaS, web and app developers who are either looking to build upon the dominant platforms of today or trying to create the platforms of tomorrow?</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">6. What are the foundation elements that enable us to become more agile? How can we embrace and integrate (again and again) to new devices, new services, new apps, new networks etc.?</span></p><p class="MsoNormal"><span style="font-family: Arial; font-size: small;">Without doubt these are difficult questions to answer. They are cross functional in nature and they force you to address some basic, foundation issues. As a starting point, many of the questions stem from your attitudes and mindset towards customers. They involve a shift towards outside-in thinking and the adoption of service dominant logic; thinking about the way in which you are constantly monitoring the jobs customers are trying to do and how you can help your customers create value. From a technology perspective the questions should prompt discussion around your core delivery approach (agile vs. waterfall), your information architecture, attitudes towards open standards / service integration, master data management, business process integration etc. Not to mention your attitudes to employees connecting their own devices to corporate systems and engaging on behalf of your brand on social networking sites. The questions challenge the way in which IT and the business work together (left brain and right brain need to be in alignment), the breaking down of internal silos, the way customer-facing staff are empowered to collaborate, fix issues and take action.</span></p><p><span style="font-family: Arial; font-size: small;">However, at the heart of the challenge is the focus on agility. There is a well-worn cliché in business circles, which is "skate to where the puck is going to be". The reality is that few of us are like ice hockey legend Wayne Gretsky and can predict where the puck will be 100% of the time. We can see megatrends and we can align around those, but we can’t predict the future. The majority of organisations would gain greater benefit from improving their core customer relationships and their speed and agility so that they can take advantage of changes faster than their competitors, rather than trying to predict what will come next after Facebook and Twitter. To use another well worn business cliché, as Jack Welch, the former CEO of General Electric, once said “we only have two sources of competitive advantage; the ability to learn more about our customers faster than the competition, and the ability to turn that learning into action faster than the competition”. One of the key advantages of doing business in a digital age is data – there really is no excuse these days for not having insight into customers or markets. The challenge is what you do with the insight and the speed at which you can execute.</span></p>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-19129859063542836982011-09-25T19:17:00.002+01:002011-09-25T19:21:49.235+01:00Quick fixes and shortcuts in the Social Enterprise<div class="MsoNormal"><span lang="EN-US">I despair when I hear people trying to “schedule a viral marketing campaign” into their marketing calendar, “build a community site in order to deflect calls from the contact center” or “do a bit of co-creation” to improve their products. Of course, marketing campaigns can go viral and of course online support forums can reduce customer service costs; but you can’t take the company benefits without giving customers the benefits that they want. You can’t have your social media and community cake and eat it.</span></div><div class="MsoNormal">The most dangerous use of social media & community is that which tries to apply old thinking to a new technology. It’s very easy to look at the benefits of social media and community from the company’s perspective and try and implement product reviews and ratings to generate “positive buzz” or an ideas site to generate customer-driven ideas. The temptation is to then believe that somehow implementing these capabilities alone makes the organization social, customer-centric and capable of driving long-term relationships.</div><div class="MsoNormal">Implementing social and community capabilities comes at a price. If you give customers the ability to review your products (which, by the way, they will do anyway on another platform) then you must allow them to say both positive and negative things about you. If they say negative things, you must listen, acknowledge and respond. Similarly, if you expect customers to spend time creating product or service ideas for you, then you must at a minimum acknowledge and respond to those ideas in a transparent way.</div><div class="MsoNormal">Better still you should provide customers with the tools then need to create value for themselves. Customers, after all, do not visit your site to try and help you cut costs from your call centre! They visit you site to do a do a job – whether that be fixing a problem, finding information or building up their own profile or status within a community – their community.</div><div class="MsoNormal">Gamification is often presented as an easy fix and a short cut to creating a healthy community. Let me be clear, I do view gamification as proven technique that can produce amazing results (I would encourage anyone to watch Jane McGonigal’s <a href="http://www.ted.com/talks/jane_mcgonigal_gaming_can_make_a_better_world.html">TED talk</a>, read any of Michael Wu’s <a href="http://lithosphere.lithium.com/t5/Building-Community-the-Platform/Gamification-from-a-Company-of-Pro-Gamers/ba-p/19258">posts</a> or read Gabe Zichermann’s book <a href="http://www.amazon.com/Gamification-Design-Implementing-Mechanics-Mobile/dp/1449397670">“Gamification by design”</a>). But, viewing points, badges and leaderboards as an easy shortcut to creating long-term relationships is at best a dangerous strategy. As many Groupon merchants have found, one off bribes produce one off customers. When the points, vouchers or one off deals disappear, so do the customers.</div><div class="MsoNormal">If you’re looking to social media and community for quick fixes and short cuts, the chances are you will find many different options but none that actually work long term without a corresponding investment in complimentary capabilities and a fundamental mindset change. There can be no half measures or insincere tactics; change needs to be embraced both at the top and at the front line. Take a look at the <a href="http://tinyurl.com/3mxkwkz">terrific presentation</a> from Angela Ahrendts, CEO of Burberry (disclosure – Burberry are a client), speaking at Dreamforce a few weeks ago. I was amazed to see a large enterprise CEO speak so enthusiastically and knowledgably about the social enterprise, its importance and more importantly its challenges.</div>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-7290024937081259812011-07-03T17:54:00.000+01:002011-07-03T17:54:42.762+01:00Left Brain and Right Brain must work together to deliver success in Digital Transformation<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicFYlOwhKAM0MlSgNtY1RrOco19CPolkTSLneGWfea8jc4pRJ1CDSoeeXmNbgbapDgYBniFQCus7HcsgdcZrDOe8jHCzhUDmJoEwZrNx8Ht7GMKw9QN3ZQiV_D6simmJTnrsVhswAvEWj7/s1600/iStock_000016894263XSmall.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="200" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEicFYlOwhKAM0MlSgNtY1RrOco19CPolkTSLneGWfea8jc4pRJ1CDSoeeXmNbgbapDgYBniFQCus7HcsgdcZrDOe8jHCzhUDmJoEwZrNx8Ht7GMKw9QN3ZQiV_D6simmJTnrsVhswAvEWj7/s200/iStock_000016894263XSmall.jpg" width="151" /></a></div>The words “but of course CRM is not a technology” prompted a collective sigh of relief from the audience. The speaker hadn’t fallen into the trap of committing the ultimate CRM sin and assuming that CRM technology could fix a business problem. The room was wise to mistakes of first generation CRM.<br />
I remember many moments like this, listening to vendors speak at conferences for example, pitching their products before inserting the appropriate “CRM is not a technology” caveat. Over the years I’d like to think I’ve had a fairly balanced view of what CRM technology can deliver and the importance of investing in complimentary capabilities like customer vision & strategy, people & change etc. (see my posts on <a href="http://thecustomerevolution.blogspot.com/2010/03/software-doesnt-build-relationships.html">“Software doesn’t build relationships, people do”</a> or <a href="http://thecustomerevolution.blogspot.com/2010/02/emperors-new-social-crm-clothes.html">“the emperor’s new social CRM clothes”</a>).<br />
10 or so years ago I used to recite stories of organizations who “did” CRM without technology – the clichéd local store manager who remembered his customers individually, understood their needs and tailored his offering to suit. This sort of story was a reaction against technology-centric CRM. It translated into the importance of thinking from the customer’s perspective and defining a customer proposition before looking at technology and other enabling capabilities.<br />
However, sometimes I think the backlash against CRM/ Social CRM technology (whatever you want to call it) has gone too far. I see organizations that totally separate their business function from their technology department. The business defines its vision, its requirements, its priorities and its timescales and then throws them over the fence for the IT department to interpret and deliver.<br />
As digital has swept through our lives I no longer believe it’s possible for the vast majority of organizations to deliver on their customer proposition without technology (even my local independent corner shop has a Facebook page where they promote special offers and promotions from other local businesses!). Customers are interacting with organizations and with each other online, through smartphones & tablet PCs, through social networking sites, apps, consumer review sites and group purchasing sites; not forgetting of course, all the traditional channels. Moreover, technology has now become an enabler to create a differentiated customer proposition not just enable a set of requirements. Technology can help identify customer needs the business was not previously aware of and create new ways to help customers complete the jobs they are trying to do when they interact with an organization.<br />
To take advantage of digital and not get out-maneuvered by smaller, more nimble start-ups, left brain and right brain must work together as one. The silo that we built up as a backlash against first generation, technology-centric (failed) CRM, must now be broken down. Of course this doesn’t mean jumping to technology for the sake of technology. Of course this doesn’t mean that technology is a silver bullet that magically improve customer relationships. But if you don’t have people in the same room who understand both the customer experience / proposition / creative etc AND the latest technology / integration / security etc then success is much more difficult to achieve.Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0tag:blogger.com,1999:blog-4389114720276736744.post-52360596796379349722011-05-30T13:57:00.006+01:002011-05-30T20:13:16.906+01:00Killing 2 birds with one stone – why cost reduction within customer service doesn't mean decreased customer satisfaction<img alt="" height="120" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEizfeJ3OoQpBiamsublgu7JJ0zoASRJdhyphenhyphens1zwUswUyiMvRU1EVz2S6Lzq7aYqy2aZSUGNKohD-KzZBH6nhyphenhyphenyHDO37F09a4FDgsiLydca5_Ye7Oed3_WiP9EXxQvVWtwErA0HNq2O-gl-a1/" style="float: left;" width="160" /><span style="font-family: verdana, geneva; font-size: medium;"> </span><span style="font-family: verdana, geneva; font-size: x-small;">I often meet with clients who want to kill two birds with one stone; reduce customer service costs, whilst also increasing customer satisfaction. Many technology-centric CRM programs of the past did not share these aims. They attempted to design solutions inside-out from the company's perspective, rather than from the customer's perspective. In many cases these programs tried to control the customer; for example defining the channels that the organisation made available for customer service requests. In a drive to reduce customer service costs, expensive human interactions were blocked from the customer by customer service numbers hidden away on a little known web page, multi-level IVRs, voice self-service solutions, chat-bots and lists of online FAQs. In the main these solutions were designed to benefit the company, keeping customers away from call centre agents and therefore reducing costs but not necessarily improving customer satisfaction.</span><br />
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</span></div><div class="p1"><span style="font-family: verdana, geneva; font-size: x-small;">The communications revolution of the last few years has meant that companies can no longer control their customers. Customers now control which channel or device they use, which social network they turn to, which sources of information they trust and chose to mash together. The communications & connectivity changes present a threat to many organisations used to an ingrained mindset of command & control, but there is also an opportunity for customer service organisations to leverage the technology changes to drive win / win outcomes, namely reducing customer service costs whilst improving customer satisfaction. Below are four examples of some of the tactics different organisations have deployed to help achieve these dual aims:</span></div><div class="p2"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div class="p3"><span class="Apple-style-span" style="font-size: x-small;"><span style="font-family: verdana, geneva;"><span class="s1">1. The best service is no service - Bill Price, former VP Customer Service for Amazon famously described his outlook on customer service in his job interview with Jeff Bezos, saying: </span></span><span style="font-family: verdana, geneva;">"Well, the best service is no service. You hire me, and I'm going to try and help reduce the need for customers to have to contact Amazon for service. Why should they? They order things online. Things should work out fine, right?" (See full Customer Think's interview with Bill Price <a href="http://www.customerthink.com/interview/best_service_no_service">here</a>). Amazon designs for no service. This starts by thinking about the jobs customers are trying to do when they interact with Amazon and working out how they can help customers achieve their outcomes online. Clearly achieving this stretches far beyond thinking about the online experience; the processes that enable the desired outcomes of customers stretch far into the organisation and it's eco-system of suppliers.</span></span></div><div class="p2"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div class="p1"><span style="font-family: verdana, geneva; font-size: x-small;">2. Pro-actively identify problems, fix them at source and update all channels - building on the Amazon example above, many organisations are now setting up command centres to stay connected to the pulse of the customer, attempting to spot trouble brewing and then proactively take action; firstly to update all channels letting customers know that there is a problem and what they are doing to fix it and secondly to fix the problem at source. Dell, for example have pioneered the use of a Social Media Command Centre to try and spot topics that matter to customers as soon as they bubble up on the social web (described in my post on <a href="http://thecustomerevolution.blogspot.com/2011/03/improving-social-media-monitoring.html">improving social media monitoring</a>). A leading US cable TV company has a swat team concept where they bring together a cross-functional team to investigate opportunities or threats fast and act appropriately e.g. launching an outbound communications campaign or fixing a network problem at source.</span></div><div class="p2"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div class="p1"><span style="font-family: verdana, geneva; font-size: x-small;">3. Leverage peer to peer as a support channel - I've written previously about the <a href="http://thecustomerevolution.blogspot.com/2010/12/giffgaff-case-study-of-customers-in.html">GiffGaff case study</a>. Around 90% of GiffGaff's customer service happens within their community forum. GiffGaff customers <a href="http://community.giffgaff.com/t5/Help-Ask-the-community-got-stuck/bd-p/QA1">fix each other's problems</a> on the forum, suggest <a href="http://community.giffgaff.com/t5/Submit-Great-giffgaff-Ideas/idb-p/ideas_01">new product ideas</a>, recommend the service to their friends and even <a href="http://community.giffgaff.com/t5/Blog/Our-first-giffgaff-iPhone-apps/ba-p/38603">build smartphone apps</a> for the community. The average response time within the onion support forum 24x7 is under 3 minutes. Furthermore, Telefonica Group who own GiffGaff estimate that their customer service model costs 4 times less than the traditional contact centre-centric model, yet their NPS score is 75 - way above the industry average (note GiffGaff publish their customer satisfaction scores <a href="http://giffgaffnews.com/2010/10/customer-satisfaction-displays-giffgaffs-attraction/">here</a>). </span></div><div class="p2"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div class="p1"><span style="font-family: verdana, geneva; font-size: x-small;">4. Integrate your community forum across the social web - BT do a great job of integrating their community forum across their various social channels. Their <a href="http://community.bt.com/">online community </a>brings together their YouTube channel (for customer support videos), their Twitter stream, their ideas page etc. They have also integrated their forum to <a href="http://www.facebook.com/BTUK?sk=app_191035797595637">their Facebook</a> page to maximise the reuse of content and allow customers to choose the channel of choice.</span></div><div class="p2"><span class="Apple-style-span" style="font-size: x-small;"><br />
</span></div><div class="p1"><span style="font-family: verdana, geneva; font-size: x-small;">One thing to bear in mind if you are attempting to replicate some of the tactics above is that simply deploying the tactics alone may well not produce your desired outcomes. In other words, simply creating a community forum does will not turn you into a GiffGaff. There are many examples where forums have actually increased customer service costs and created additional calls for the call centre to deal with. Fundamentally, the success of deploying the tactics above relies on the adoption of a <a href="http://en.wikipedia.org/wiki/Service_dominant_logic_(marketing)">service dominant mindset</a>. To understand more about Service Dominant Logic, a topic first described some 7 years ago by <a href="http://twitter.com/#!/stevevargo">Steve Vargo</a> read this great <a href="http://www.mycustomer.com/topic/social-crm/social-crm-srossroads-where-next/121240">post</a> by Graham Hill or take a look at this <a href="http://www.slideshare.net/wimrampen/service-logic-a-new-dominant-logic-for-the-social-customer-relationship-marketer">presentation</a> by Wim Rampen. </span><br />
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<span style="font-family: verdana, geneva; font-size: x-small;">Service dominant logic aims to broaden the traditional goods-dominant logic, placing service provision rather than goods as the basis for economic exchange. With a service dominant mindset the customer is always a co-creator of value therefore we design from the customer's perspective recognising that value is created through usage not at the point of transaction. With a service dominant mindset the tactics above are far more likely to be able to deliver the dual aims of reduced service costs and increased customer satisfaction.</span></div>Anonymoushttp://www.blogger.com/profile/04557655165585746343noreply@blogger.com0