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COPYRIGHT © 2010 VKSII, All Rights Reserved A Manifesto for Cloud-relevant Service Management Highlights: The economic imperatives driving Cloud adoption The elements of a service management system and provider organization The impact of Cloud upon the system and organization How to adapt your service provision model to incorporate cloud options Based upon the USMBOK The Consequence of Hybrid Cloud Computing on Service Management Practices Ian Clayton Principal Service Management 101 LLC
COPYRIGHT © 2010 VKSII, All Rights Reserved Introduction In this session we shall explore: The economic and management imperatives driving cloud computing, the common cloud options The perspectives, scope and content of the ‘service management manifesto’ The elements of a service management system and service provider organization from both the ITIL® and USMBOK® perspectives The impact of Cloud upon the system and organization, and specifically key practices, processes, roles, policies and artifacts How to adapt your service provision model to incorporate cloud options A six-step method for ensuring your service management initiative remains cloud relevant A basic primer on Cloud Computing based upon US Federal Government definitions.
COPYRIGHT © 2010 VKSII, All Rights Reserved Cloud 101: Introduction The ‘Cloud’ was originally a metaphor for the Internet, the area outside of your own network Cloud computing has many diverse definitions, summarized, the Cloud is an on- demand self-service Internet infrastructure where you pay-as-you-go and use only what you need, all managed by a browser, or application. Cloud computing is broken up into multiple segments represented by the Cloud Pyramid and including: Cloud Infrastructure Cloud Platforms Cloud Applications Analyst firm IDC says cloud services will outpace traditional IT spending over the next five years and will represent $44.2 billion by 2013 – its huge business!
COPYRIGHT © 2010 VKSII, All Rights Reserved The US Federal Government Does and Defines Cloud Computing With an IT budget of more then 70 billion dollars a year, the US government represents the largest IT consumer on the planet With this kind of money at stake, the influence the US government imposes is enormous and directly influences how we as an industry both define and use the cloud The National Institute of Standards and Technology (NIST), a non-regulatory agency of the United States Department of Commerce with a mission to promote U.S. innovation and industrial competitiveness, has prepared definitions on behalf of the US Government for Cloud Computing It is expected these definitions will be the de facto standard the entire US government will be given – for more information visit:
COPYRIGHT © 2010 VKSII, All Rights Reserved The NIST Cloud Definition Framework CommunityCloudCommunityCloud Private Cloud Public Cloud Hybrid Clouds Deployment/Deliver y Models Service Models Essential Characteristics Common Characteristics Software as a Service (SaaS) Platform as a Service (PaaS) Infrastructure as a Service (IaaS) Resource Pooling Broad Network Access Rapid Elasticity Measured Service On Demand Self-Service Low Cost Software Virtualization Service Orientation Advanced Security Homogeneity Massive Scale Resilient Computing Geographic Distribution Source: NIST
COPYRIGHT © 2010 VKSII, All Rights Reserved The Management Imperative “Address One of My Problems!” Today's economic climate is causing management to tighten budgets and re- prioritize projects It is acting as an accelerant for management expectations of the benefits from investing in a service management initiative All investments are subject to greater scrutiny, with projects being reprioritized and non-performers shelved, or abandoned, perhaps permanently Initiatives must complete and deliver on their promise, or a specific subset of deliverables, within a 30, 60, or 90-day period.
COPYRIGHT © 2010 VKSII, All Rights Reserved Why ‘Cloud’ Makes the Business Pulse Race Some of the more common benefits attributed to Cloud Computing include: A more agile and responsive IT investment decision-making process Greater alignment of IT investments with business goals Paying only for what you use, a new generation of ‘service economics’ Even more rapid, utility styled request and deployment of information services Greater scalability in all ways, linking real-time demand and utilization with planned capacity – ‘just in time service’ Higher quality of service, less downtime caused by non-standard or inconsistently architected and designed infrastructures More cost effective use of all types of technology resources, including human Annual savings in hardware, power and human labor costs Environmentally friendly ‘green IT out of a box?’ THE AVAILABILITY OF VIABLE OFFERINGS!
COPYRIGHT © 2010 VKSII, All Rights Reserved The Open Cloud Manifesto The purpose of the Open Cloud Manifesto is to “… initiate a conversation that will bring together the emerging cloud computing community (both cloud users and cloud providers) around a core set of principles” The document discusses: What is Cloud Computing and why it is important Challenges and barriers to adoption The goals of an Open Cloud Guiding principles for an Open Cloud For more information visit the website:
COPYRIGHT © 2010 VKSII, All Rights Reserved “Mirror Mirror on the Wall…” The benefits of Cloud mirror those suggested as resulting from an IT Service Management or ITIL® project, while mugging ITSM for its benefits, Cloud exposes a number of failings in the traditional ITSM approach: The sheer glacial speed of progress and delivery of tangible business benefits The often veiled commitment of specialized, scarce resources to a long-term effort A lack of support from the application and systems management functional groups A failure to properly integrate business continuity, security, facilities management and capacity planning disciplines The inability to relate customer activities to consumption of IT resources The lack of stakeholder support in ITSM as a value creating initiative Cloud reminds us the business need has not changed and what is wanted is a demand driven, pay as you go, utility styled approach related to specific business outcomes.
COPYRIGHT © 2010 VKSII, All Rights Reserved For Now.. a Hybrid Cloud Cloud service providers may struggle to accommodate highly customized applications and IT may baulk at migrating sensitive systems Likely result is many IT organizations will face the challenge of managing a hybrid cloud infrastructure over the next 2-3 years Meanwhile, cloud computing is busily establishing a next generation of service management ‘best practices’, involving: Subscription based offerings More agile service agreements An order-fulfillment provisioning model Federated design of the service management system that spans dueling silos and the total customer experience All the while the cloud options will have to tackle the emerging service experiential economy, where the customer experience matters most, successful outcomes aside.
COPYRIGHT © 2010 VKSII, All Rights Reserved The (Universal) Service Management Manifesto™ The purpose of the service management manifesto is to clarify the definition of service management and what it means to differing constituents Like the open cloud manifesto the intent is to initiate a conversation that will bring together the service management community on a universal basis around a core set of principles The manifesto has five perspectives: The customer perspective, representing consumers or products and services The provider perspective, for service providers The professional perspective for individuals working within service industries The vendor perspective for suppliers to service organizations The community perspective, for organizations such as trade and professional associations, representing the industries, organizations, and individuals involved in the consumption and provision of the products and services.
COPYRIGHT © 2010 VKSII, All Rights Reserved The Service Management ‘Cloud’ Elements The service management system has two discrete but co-designed elements: the provisioning system and the organization Apart from security and data governance, Cloud Computing poses a number of major challenges to any organization active, or considering a service management initiative The Service Management System Source: USMBOK The Service Provider Provisioning System The Service Provider Organization
COPYRIGHT © 2010 VKSII, All Rights Reserved The natural tendency of organizations to think ‘Inside-Out’ Firstly, it’s a natural tendency and common for most organizations to look inward at what work they do – to think inside-out Inside-out thinking places a greater emphasis, sometimes total, on how the work is performed, its efficiency, productivity, and the product quality This is especially true if the organization is detached or insulated from its end customers, a monopoly, the economy is healthy, and the operational environment stable Performance measures are more focused on the work performed by the service provider, processes, or technologies than on customer outcomes Unfortunately, ‘inside-out’ thinking is commonly associated with a failure to think customer, to understand why the work is performed, and to fail to associate the benefits of a project or initiative with customer results and satisfaction levels.
COPYRIGHT © 2010 VKSII, All Rights Reserved 7 Signs You are Failing Your Customers (and You) – and may be ‘inside-out’ 1.Key service staff are unable to state easily, clearly and briefly who the customers are, what we do for them, and the basis for customer satisfaction 2.The view of the customers, what they care about, and how you serve them, differs significantly across the organization 3.When compared, more time is spent on internal issues, processes and conflicts than on discussing the customer outcomes and needs 4.Few of your decisions are explicitly driven by customer needs 5.You have trouble adapting to normal variations in the customer operations and get blindsided by changes in strategy and behavior 6.You are trying to apply one rigid practice or process framework to all customer situations 7.You do not know how your efforts relate to the interests and desired results of your customers?
COPYRIGHT © 2010 VKSII, All Rights Reserved Manifesto: What is “Service Management”? Service management is a systematic method for managing the provision of services to customers at a known quality and cost Service management ensures the desired results and customer satisfaction levels are achieved cost effectively Service management is a means by which the customer experience and interaction with our products and services is managed Service management is also a transformation method for any organization that wishes to operate as a service provider organization The origin of service management is in product management Service management concepts and methods are universally applicable to any industry, including information technology (IT).
COPYRIGHT © 2010 VKSII, All Rights Reserved Manifesto: Service Management requires… The adoption of a service perspective to the planning of product offerings and allocation of resources The embedding of a service subscription, consumption and provision logic in the management approach A focus on the desired customer relationship and successful customer outcomes required by customers A commitment to being operated and managed as a ‘service (provider) organization’ A matching of the quality of service, and its cost of provision, to customer requirements and objectives Understanding points from which service can be accessed, managing the ‘service encounter’, and designing how services are supported A system and organization for the fulfillment of ‘service requests’.
COPYRIGHT © 2010 VKSII, All Rights Reserved What is IT Service Management (ITSM)? The origin of the term is generally unknown, but it has been in mainstream use during the 1990s, historically it has been associated with the introduction of, or improvement of existing IT operational practices through the adoption and adaptation of industry ‘best practices’ ITIL® defines ITSM as, “The implementation and management of quality IT services that meet the needs of the business…” Wikipedia defines IT Service Management as, “a discipline for managing information technology (IT) systems, philosophically centered on the customer's perspective of IT's contribution to the business…” IT Service Management is also the term commonly used to describe the process centric effort of transforming an IT organization from one focused on managing the IT infrastructure, to managing the provision of information system services.
COPYRIGHT © 2010 VKSII, All Rights Reserved The Promise of IT Service Management (ITSM) “The startling and inconvenient truth about many IT Service Management projects is that they fail the sponsoring IT organization and the customer” “Given the record so far, it is highly likely that without a major outside-in thinking ingredient, the emerging refreshed ISO standard will continue to propagate an inside-out approach and result in a similar failure” Ian Clayton, Principal, Service Management 101.
COPYRIGHT © 2010 VKSII, All Rights Reserved The Cloud Discussion is a ‘Darwinian Event’ for Traditional ITSM The Cloud discussion polarizes ITSM theorists and differentiates them from pragmatic practitioners Proponents of familiar ‘must-have’ ITSM artifacts, such as service catalogs and configuration management databases (CMDB) are either strangely quiet, or forming committees designed to ensure inter-operability To compound matters, few if any ITSM training classes have adapted their curriculum to include Cloud concepts Some of the most vocal ITSM evangelists are soliciting ideas rather than leading their peers through this latest metamorphosis Have no doubt, the option of Cloud Computing represents a ‘Darwinian Event’, causing management to rethink the value of an ITSM initiative, and to reassess an investment in existing ITSM qualification schemes and inflexible frameworks, such as the IT Infrastructure Library®.
COPYRIGHT © 2010 VKSII, All Rights Reserved What is a Service Management System? The service management system represents all the operational and administrative elements required by a service organization to respond to market opportunities and customer needs The system’s purpose is to enable the cost effective design, development, offering, contracting, provisioning and support of quality assured services The goal of a service management initiative is to establish and sustain a service management system The journey to a service management system requires the transformation of an organization and adaptation of ‘best practices’.
COPYRIGHT © 2010 VKSII, All Rights Reserved Service Management System Fundamentals The service management system should answer a number of question: How the service provider decides which customer communities to serve What governance will be used to ensure the voices of the customer, provider and regulators is heard, and documented properly as service requirements How services will be marketed to each community How an existing or prospective customer can request service How requests for service are fulfilled How the design, development and provision of services is funded What key roles are required to manage the provision of service How performance will be measured and managed from a results achieved, and satisfaction level perspective How the service provider plans will be aligned with those of customer What transformation method will be used and how will the provider continuously improve.
COPYRIGHT © 2010 VKSII, All Rights Reserved The ITIL® Service Management ‘System’ ITIL provides a simplistic four stage ‘lifecycle’ based system The stages are supported by a continual improvement fifth and cyclic ‘stage’ There is no detail or over- arching representation of how requests or incidents journey through the system There are multiple inputs to the ITIL ‘system’, including incidents and service requests. Source: SMBOK™ Service H H L L M M H H L L M M H H H H M M
COPYRIGHT © 2010 VKSII, All Rights Reserved ITIL® ‘Processes’ Impacted by Cloud Source: SMBOK Service ITIL does not provide in core books an overall representation of how processes co-operate The core documentation describes approximately 36 subject areas or ‘process’ candidates The likely impact is based upon ITIL V3.0 descriptions. M M H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H M M M M M M M M M M M M M M M M L L H H M M M M H H M M H H L L H H
COPYRIGHT © 2010 VKSII, All Rights Reserved Key ITIL® Artifacts Impacted by Cloud Application Portfolio Asset Register Authority Matrix (RACI Chart) Availability Plan Back-out Plan Business, IT Service Continuity Plans Capacity Plan Change Record, Schedule, emergency Configuration Management Database Definitive Media Library Incident record, impact statement Operational Level Agreements (OLA) Patterns of Business Activity Problem record, cause statement Release identification, record, unit Requirement Catalog Security Policies and Profiles Service Acceptance Criteria Service Catalog Service Contract and Level Agreements Service Improvement Plan Service Level Packages Service Level requirements, Targets Service Pipeline Service Portfolio Service Request (Request Fulfillment) Underpinning Contracts
COPYRIGHT © 2010 VKSII, All Rights Reserved The ITIL® Roles ITIL does not provide an overall organizational structure or ‘role continuum’ The core documentation describes approximately 47 responsibilities or ‘roles’ These roles include at least two that are implied The likely impact is based upon ITIL V3.0 descriptions. Source: SMBOK Service M M H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H H M M M M M M M M M M M M M M M M M M M M M M L L L L L L L L L L L L L L L L L L L L M M H H
COPYRIGHT © 2010 VKSII, All Rights Reserved The ITIL® Qualification Scheme The ITIL Qualification Scheme (IQS) issues certificates based upon proof of progressive knowledge of ITIL core publications Proof is by examination The IQS is a certificate issuing scheme The likely impact is based upon ITIL V3.0 descriptions. H H M M L L H H H H H H
COPYRIGHT © 2010 VKSII, All Rights Reserved The USMBOK® Service Management System Customer Model Service Model Enterprise Model Request Lifecycle Quality Lifecycle Revision Lifecycle Change Lifecycle Release Lifecycle Event Lifecycle Requirement Lifecycle Asset Lifecycle Support Lifecycle Service Request Service Retire Business Planning Framework Performance Management Framework Governance Framework Provision Lifecycle Operations Lifecycle Policy Framework Service Transaction Engine The Service Lifecycle SYSTEM Knowledge Domains Service Infrastructure Management Service Value Management Service Operations Management Service Delivery Management Service Quality Management Service Fulfillment Management Service Customer Management ORGANIZATION M M L L H H H H H H H H H H H H H H H H H H H H H H H H H H M M M M M M L L L L
COPYRIGHT © 2010 VKSII, All Rights Reserved Service Request: The Key Input to Service System Improvement statement is a aggregation of: Customer oriented needs Non-customer needs Idea generation Catalog-driven service enquiries from official ‘service access points’ by authorized persons Problem statement developed from: Service incident records All inputs are consolidated into a common service request format as the primary and singular input to the Service System. Improvement Statement Service Request Customer Interview Problem Statement Service Incidents Service Catalog Idea Generation New Technology Derivative Technology Incremental Service Improvement Derivative Market Non-Customer Oriented Needs Customer Oriented Needs and Wants Service System Source: USMBOK M M L L L L H H H H H H
COPYRIGHT © 2010 VKSII, All Rights Reserved Service Provider Organization: The Role Continuum Represents the specialized roles required to operate and manage a service organization, spanning the customer and infrastructure facing roles Mandatory role taxonomy input to a governance framework Provides context for application and ownership of operational policies, procedures, and ‘best practices’ Customer Facing Service Infrastructure Facing Relationship Requirement Responsibility Regulations Order Fulfillment Marketing Opportunity Partnering Quality Performance Excellence Back Office Delivery Operations and Support Infrastructure and Materials Management The Service Management System The Role Continuum Source: USMBOK
COPYRIGHT © 2010 VKSII, All Rights Reserved USMBOK®: Knowledge Domains & Knowledge Areas The USMBOK contains 40 knowledge areas, corresponding to major competency (practice) Each knowledge area leverages existing information references and in some cases credential programs Supports skill-path, role- based curriculum Leverages proven and universally applicable service industry methods Spans the OI-IO Continuum.
COPYRIGHT © 2010 VKSII, All Rights Reserved Adjusting Your Service Management Initiative Think ‘Outside-In’ Outside-In thinking is not new, with roots in marketing management, and accepted business management theory dating back past Peter Drucker Outside-In thinking puts the interests of the customer first It ensures an explicit customer reason is in every decision, including what services to offer and the makeup of those services Outside-in cares most about successful customer outcomes (SCOs) Observe customers ‘in their own habitat’ to understand their behavior, how they think and act, and what motivates them to behave in certain ways It is in increasing use by the more successful business enterprises Many ‘quality improvement’ such as Lean and Six Sigma lack suitable outside-in thinking and are embracing it now.
COPYRIGHT © 2010 VKSII, All Rights Reserved The Basis of Outside-In Thinking: Customer Experience, Outcomes, Satisfaction The customer, and customer experiences matter most because quality goods and customer satisfaction are commoditized Customer satisfaction leads to loyalty and advocacy Loyalty lowers costs and is increasingly necessary to be competitive. The best way to drive loyalty is to create consistently compelling and authentic experiences for the customer To design these experiences, we need a new skill set, a new way of understanding people, and of understanding our customers This understanding enables us to design things that are meaningful and valuable to people, helping them achieve their desired results, outcomes We must not start by designing products and internal processes, and start designing experiences. We must design services from the outside in.
COPYRIGHT © 2010 VKSII, All Rights Reserved 6-Step Method to Ensure Your Service Management Initiatives Remains (Cloud) Relevant Outside- In Thinking 1. Organize 2. Recognize 3. Manage Experience 4. Personalize 5. Foster Community 6. Innovate & Improve 1.Organize for customer relevant service management 2.Recognize, respect and picture customers and their end customers 3.Manage the customer’s total service experience 4.Deliver personalized service 5.Foster a customer community and manage the entire customer lifecycle, from satisfaction, to loyalty and advocacy 6.Engage in Continuous Innovation and Improvement
COPYRIGHT © 2010 VKSII, All Rights Reserved Summary Remember - Customers are in control in a service economy Cloud Computing remains an emerging and maturing option for a service provider As yet it is not subject to any standard definition or regulation – caveat emptor (buyer beware) reigns Cloud places a significant emphasis and impact on key areas: Security and data governance Understanding your successful customer outcomes and required relationship Managing service provision and the total customer experience There is, and will continue to be a major impact on education and professional qualifications (certificates, certification and credentials) - CHECK.
COPYRIGHT © 2010 VKSII, All Rights Reserved Upcoming Events Outside-In Service Management Foundations™ San Diego, Solana Beach, October USMBOK Foundations™: San Diego, Solana Beach, October Launch of three online website Oct 12: Service Management University™ Service Management Connections™ – professional community, ‘Yahoo:Answers’ Service Management Manifesto™ Certified Service Management Professional (CSMP)™ San Diego, Solana Beach November For classroom training discounts and news on upcoming website services goto and register for freehttp://www.servicemanagement101.net Or call Ian on +1 (858)
COPYRIGHT © 2010 VKSII, All Rights Reserved The Guide to the USMBOK Publication By registering for this webinar you receive a $50 discount off the list price of the Guide to USMBOK book The Guide is a ‘Rosetta Stone’ for service management, codifying and connecting: Universally applicable concepts and methods for any service management initiative Elements of a service management system Key roles in a service organization Your promotion code is ‘GUIDE50’ A companion publication is the USMBOK Lexicon. By registering for this webinar you receive a $50 discount off the list price of the Guide to USMBOK book The Guide is a ‘Rosetta Stone’ for service management, codifying and connecting: Universally applicable concepts and methods for any service management initiative Elements of a service management system Key roles in a service organization Your promotion code is ‘GUIDE50’ A companion publication is the USMBOK Lexicon.
COPYRIGHT © 2010 VKSII, All Rights Reserved A Manifesto for Cloud-relevant Service Management Thank You – Any Questions? Universal Service Management Body of Knowledge: My Blog at The Consequence of Hybrid Cloud Computing on Service Management Practices Ian Clayton Principal Service Management 101 LLC
COPYRIGHT © 2010 VKSII, All Rights Reserved Step 1: Organize for Customer Relevant Service Management Empower and motivate your organization to think customer first by linking compensation to customer outcomes Create a culture where an explicit customer reason drives every decision Focus on who you do work for, why you do what you do for them, before you look at what work you do Use customer perceptions of your products not your own Inspect customer interactions (moments of truth/ touch points) & reengineer Design practices using customer scenarios (service requests) and engage customers in co-designing ideal scenarios Service management means managing the total customer experience Practices should be designed and streamlined using customer scenarios Measure what matters - defines customer relevant measures then internal measures and assess degree of alignment and synchronization.
COPYRIGHT © 2010 VKSII, All Rights Reserved Understanding the Customer A customer (perhaps unknowingly) uses a combination of the three vital service equations and are focused on: Achieving their desired results Receiving personalized service that leaves them satisfied they are relevant, and that service is ‘delivered as promised’ Consequently: A quality process is irrelevant to the customer unless it directly effects value by helping achieve results (easier, more consistently), lowers the cost of providing the service Process maturity is irrelevant unless the level of maturity can be aligned with the minimum, or optimum capability needed to satisfy the agreed service level objectives – or customer expectations.
COPYRIGHT © 2010 VKSII, All Rights Reserved Step 2: Recognize, Respect and Picture Customers & their End Customers Develop a deep understanding of how your customers do their jobs and value their time Ground your success in knowing your customers and their successful customer outcomes (SCO) Who is the customer? What is the scenario? What are the desired outcomes? What are the conditions of satisfaction? What are the moments of truth and metrics? What are the related and/or supporting customer scenarios? Remember everything your organization knows about the customer Ensure everyone in your organization has access to a 360-degree view of the customer ‘picture’, their SCOs, service encounters and moments of truth.
COPYRIGHT © 2010 VKSII, All Rights Reserved Step 3: Manage the Customer’s Total Service Experience Manage service encounter and moments of truth – the customer experience Remember, its all about customer ’DNA’ Do not assume, alienate, abuse, annoy, abdicate Eliminate the creation of unplanned customer interactions Deliver a seamless customer experience across channels and touch points In deciding what to put on your portal first, start with the most commonly requested information or transaction Redesign your customer facing processes from a customer’s point of view Give customers control over their experience, place requests, check status, view history, optionally trouble shoot their own problems Make it easy for customers to do business with you.
COPYRIGHT © 2010 VKSII, All Rights Reserved Step 4: Deliver Personalized Service Personalize interactions with customers – walk in your customer’s shoes Customers will... Buy before they try, buy by the piece, mix and match Want to reshape and repurpose goods and services, to share and co-brand Observe people in their own habitat to understand their behavior, how they think and act, and what motivates them to behave in certain ways Tune service encounters, touch points and moments of truth Maintain a list of top scenarios for each customer Custom-fit information presented and offers Give customers the ability to design their own products Personalized service may lead to a need for community Recruit lead customers to co-design with you and map the ideal state
COPYRIGHT © 2010 VKSII, All Rights Reserved Step 5: Foster a Customer Community and Manage the Customer Lifecycle Relate and group customers with common interests and needs Common needs foster community, build a community around each set of needs, line of service or service or set of successful customer outcomes Introduce and reinforce common terminology and values Help customers support other customers Design community based and relevant customer support Reward customers for being ‘sticky’, loyal and advocates Remember, customers want to be consulted about the community Communities create added value and support the satisfaction-loyalty- advocacy customer lifecycle.
COPYRIGHT © 2010 VKSII, All Rights Reserved Step 6: Engage in Continuous Innovation and Improvement Respect the management imperatives Establish a continuous improvement program (not service, not process) Continuously refine your work to make it easier for customers to do their jobs Defines customer relevant measures then internal measures and assess whether existing practices are aligned to deliver SCOs Experiment on a small-scale to help improve your customer understanding of your strategy Continuously improve processes based upon customer feedback Start the transformation with simple steps, one customer, one SCO. Ask customers what they want, be vigilant of customer cues Identify and address the high inertia elements of your strategy Move from process/product centric to customer centric
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