2 Welcome To The Age Of The Customer! Eveline Oehrlich, Principal AnalystFebruary 28, 2013
3 In the Age of the Customer, IT must enable rapid change across the value chain.
4 How Is The Age Of The Customer Redefining Competition? AgendaHow Is The Age Of The Customer Redefining Competition?How Do IT Organization's Change in the Age Of The Customer?
5 Digitally-empowered customers redefine competition in the Age of the Customer Source: June 6, 2011 “Competitive Strategy In The Age Of The Customer”
6 The Age of the Customer impacts all five of Michael Porter’s forces of competition Source: June 6, 2011 “Competitive Strategy In The Age Of The Customer”
7 The customer is in charge Bankruptcy$11BI was planning to start by telling a story of two companies…one that was obsessed with building and maintaining its vast network of stores, and one that was obsessed with customers and making it convenient to rent videos.But on Sunday night, that all changed.So to make my point, I’m going to ask for your help.Please stand up if you or anyone in your household has ever had one of these and been a Blockbuster customer.Please remain standing if at any time in the past you switched from Blockbuster to Netflix.Please remain standing if the reason you switched was mostly for convenience.Please remain standing if you are disappointed with Netflix announcement to break its service into two business – DVD and streaming.Source: Blockbuster store closingX$6.8B
8 Customers’ experiences drive success Trane empowers distributors to upsell and close deals fasterAn iPad app delivers content, sales materials, and documentsThe “ring to ching” close rate is 20% faster, 31%+ in revenueAnalytics are built into the platform to monitor, refine, and rewardBruce Tansy, BI guy at TraneCynergy did the appSource: Trane
9 Services eclipse products Source:Voice-over about business outcomes — a couple of data points — is revenue material, customer sat, competitive position
10 Users provision their own business capabilities — devices, apps, XaaS, … “How are the following technology sourcing functions currently shared between your company’s IT organization and your business group/department?”Base: 1,004 North American business decision-makers in firms with employeesSource: Forrsights Business Decision-Makers Survey, Q4 2011
12 The datacenter’s core skill becomes business — not technology What are the 3-5 points to make — really accentuate — don’t spend too much time on this chartWhat is the “force at work” — what is the issue — overhauling the staff in the data centerSimon — the picture and the title don’t match — can’t even control it anymore — tools, XaaP, — change the headline? Dump the words on top of the arrows — how wrestle this to the ground — become a coordinator of the work of othersuse the dev-ops example — where are the investments going (more skills, agility, time- to-benefit, cut higher cost)Simple chart — not 50-box org chart — shift in capabilities — from-to — amount and type of labor contentChange title to be datacenterSource: January 18, 2012, “Avoid Tactical, Narrow Service Management And Automation Strategies”
13 Threats and opportunities in the Age of the Customer: It’s IT’s perfect storm The customer is in chargeCustomers’ experiences drive successServices eclipse productsUsers provision their own business capabilitiesChange moves to systems of engagementThe datacenter’s core skill becomes business — not technology. . .The customer is in charge — empowered by technology and information — Winning firms orient around their customers’ journeys, responding nimbly, flexibly, globally, and smartlyServices eclipse products — following and enabling the customer’s journeyUsers provision their own business capabilities — through devices, Web sites, X-as-a-service, . . .Change moves to systems of engagement — to the edge of the technology stack so that core IT services become standard, automated, & consolidatedThe datacenter’s core skill becomes business, not technology — low-level technology capabilities are sourced, not built
14 In the past IT saw serial waves of technology evolutions like mainframes, PCs and the Internet impacting their businesses leaving sufficient time for digestion and refinement
15 IndustrializationCloudSmartMobileSocialBYODBig DataReal-timeAgileConsumerizationTechnology evolutions are moving faster, clashing, overlapping and completing each other to create new challenges and opportunities.
16 The Latest Big Disruption (Complexity) ConsumerizationCloudSocial MediaManual AbilityComplexityVirtualizationTheoreticalReal ComplexityAccelerant200720082009201020112012
18 The Business Loves If IT Adds Value But … PredictableCost effectiveProductiveFew surprisesThere are too many surprises in IT!
19 How Is The Age Of The Customer Redefining Competition? AgendaHow Is The Age Of The Customer Redefining Competition?How Do IT Organization's Change in the Age Of The Customer?
20 Old Service Management & The New Service Management
21 …focus on customer experience Stop Pushing The ITIL Kool Aid……focus on customer experience
22 Top Performing Companies Set Different Priorities FlexibleNew ITSmartSocialOld school IT
23 Welcome to the Industrial Revolution the next wave of^You can industrialize your IT – here’s how:Put discipline into your processesEngineer customer experienceReduce the MOOSE or let others do the “grunt work”Adapt the people (skills and org)
24 The New Faces Of IT Social IT Dynamic IT Smart IT Dynamic IT … dynamically supports business needs with internal & external resources and provides seamless access and support to all resources for business users all the time and anywhere.Social IT … connects business users with internal and external people and products to enable high performance, collaborative business processes.Smart IT … leverages technology to support business value and provides timely and contextual support to all business users.
25 New Engagement Models Dynamic IT Source: March 26, 2012, “Mobile Is The New Face Of Engagement”
26 IT (BT) is about systems of engagement — not systems of record Base: 1,004 North American business decision-makers in firms with employeesSource: Forrsights Business Decision-Makers Survey, QSource: May “Forrsights: Business Execs Increase Direct IT Spend To Support Systems Of Engagement”
27 Need To Define “Services”! CateringNeed To Define “Services”!
28 What Is A Service? Service Service Service Business BRM Business serviceServiceAppServiceI&OApp ownerInfraService
29 The service (product) is key to industrialization! What’s The Service?Whatever is important to the consumerHow do we define them (including SLAs)?Pursue service portfolio managementA Service is constructed from sub-servicesThe service (product) is key to industrialization!
30 The solution: Firms like P&G drive business-service-value Procter & Gamble is known for its leading consumer products and its marketing prowess — and they yield results: revenue grew 10% for their fourth, ending in June 2011, over QP&G is famous for brand management — for knowing its customers and how to bring product to market. In fact, many MBA programs go to school on P&G.But P&G isn’t standing still — and [CLICK] Filippo Passerini — Group president of P&G’s Global Business Services organization and CIO — is relentlessly pursuing innovation, including collaborating with marketing to drive customer knowledge and responsiveness across the enterprise and the value chain.One striking example of this is the Virtual Modeling And Simulation Service, part of the “Product Innovation Capabilities” service line.The challenge for the Virtual Modeling and Simulation Service is to accelerate the speed of innovation-to-market — and key to this is knowing what the customer wants and responding to that knowledge.Traditional customer testing through physical mockups used to take 6-7 weeks[CLICK]Passerini’s photo source: P&GFilippo Passerini, Group President ofGlobal Business Services and CIO
31 Customer testing used to take 6-7 weeks — limited by cost and time When a new product is coming to market, the traditional approach was to do physical mockups of products to test customer reaction to art work, packaging, merchandising, etc. But the 6-7 week cycle time was way to slow and costly.The cost and time meant less complete testing and slower response to customersEnter the Virtual Modeling And Simulation Service[CLICK]Source:
32 Virtual reality now allows more customers to review more options in days — not weeks This team have changed all this, using virtual reality to provide marketing with end-to-end business capabilities that are integrated into P&G’s overall go-to-market processes.When brand managers want to do testing, they request the services from the Virtual Modeling And Simulation Service team — resulting in a virtual testing environment within hoursThe speed is a result of Virtual Modeling And Simulation Service team’s work across the product marketing organizations to build a library of virtual tools that enable rapid deliveryThe testing isn’t limited to P&G’s direct marketing. Virtual Modeling And Simulation Service team also involves retail channel partners like Wal-Mart and Target — to assure that customer responsiveness reaches across channels and across the customer life cycle.And to assure technology innovation is at the edge, Virtual Modeling And Simulation Serviceteam focuses on the business while technology partner Accenture delivers new capabilities.80% of products going to market use the virtual testing — 100% of the tier 1 products.And the virtual consumer testing is integrated across the enterprise and across the value chainThe result? [CLICK]Higher product success rates due to broader testingFaster time-to-decisionA greater number of alternatives reviewedAnd a broader number of products testedSource: P&GBetter insights and higher success rates when P&G engages more with the consumer.
35 Some clients still don’t realize the importance of service support, field support, business enablement…Image source:
36 Turbo Charge Your Service Support Processes SocialITSocialWebService CatalogService DeskMobile DeviceBrowseCommunity Forum, Facebook, etc.Chat with service agentResolve/Request/Troubleshoot issueTransferto service desk agent.Browse enterprise service catalog.Receive details via SMSservice desk agent.Navigate support via smart deviceSource: August 2011 “Turbocharge Customer Service Process With Social Technologies”
37 The Number Of Tablets x10 In 5 Years Source: April 23, 2012, “Tablets Will Rule The Future Personal Computing Landscape”
38 Tablets Are Cannibalizing Pcs Source: April 23, 2012, “Tablets Will Rule The Future Personal Computing Landscape”
39 IT Industrialization Is Changing The People SmartITIT, as we’ve known it, is deadMany skills are diminishingNew skills are emerging as highly desirableNew sourcing models — don’t do it all yourselfOrganization structure will be in constant fluxIT Industrialization Is Changing The People
40 New Talent, Organizations, And Processes SmartITNew Talent, Organizations, And ProcessesAugust 2011 “How To Become A BT Leader — And Leave IT Order-Taking Behind”
41 Hire, rewire, or redeploy to fill the needs Hot New Roles EmergeBusiness relationship managerAutomation architectService designerService managerService brokersVendor managerHire, rewire, or redeploy to fill the needs
43 IT’s actions in the Age of the Customer Focus from the customer in — on understanding and responding to customers – use automation when possible.Concentrate on systems of engagement — minimizing changes to the systems of record.Refine service management processes to meet your customers expectations and industrialize your value chain.
45 Reference reports from Forrester “Forrsights: Business Execs Increase Direct IT Spend To Support Systems Of Engagement” May“Mobile Is The New Face Of Engagement: An Executive Summary” March 2012“Empowered BT Redefines The Traditional IT Archetypes” February“Avoid Tactical, Narrow Service Management And Automation Strategies” January 18, 2012“Empowered Business Technology Defined” July 18,“Competitive Strategy In The Age Of The Customer” June 6, 2011