Showing posts with label Customer-driven. Show all posts
Showing posts with label Customer-driven. Show all posts

January 16, 2010

Customer-driven IT Management

For many years, we have witnessed the failures of excessively product-driven management, where companies focus on the development and sales of products (from automobiles to toaster ovens) to their customers—whether the customers really want those products or not. This was epitomized by the “build it and they will come” mentality.

Numerous companies faltered in this over-the-top product mindset, because they were focused not on satisfying their customer’s needs, but on selling their wares. Think GM versus Toyota or the Days Inn versus The Four Seasons.

Now however, organizations are moving from product- to customer-focused management, with the basic premise that organizations need to engage with their customers and assist them in getting the most value out of whatever products meet their requirements best. In the world of IT, this is the essence of user-centric enterprise architecture, which I created and have been advocating for a number of years.

Harvard Business Review, in January-February 2010, has an article titled “Rethinking Marketing” that asserts that “to compete, companies must shift from pushing individual products to building long-term customer relationships.”

· Product-driven companies—“depend on product managers and one-way mass marketing to push a product to many customers.”

· Customer-driven companies—“engage individual customers…in two-way communications, building long-term relationships.”

The old way of doing business was to focus on the products that the company had to offer and “move inventory” as quickly and profitably as possible. I remember hearing the sales managers yelling: “sell-sell-sell”—even if it’s the proverbial Brooklyn Bridge. And the driver of course, was to earn profits to meet quarterly targets and thereby get bigger bonuses and stock options. We saw where that got us with this last recession.

The new way of doing business is to focus on the customer and their needs, and not any particular product. The customer-driven business aligns itself and it’s products with the needs of its customers and builds a long-term profitable relationship.

“In a sense, the role of customer manager is the ultimate expression of marketing find out what the customer wants and fulfill the need), while the product manager is more aligned with the traditional selling mind-set (have product, find customer).”

The new model for a customer-driven enterprise is the epitome of what social computing and Web 2.0 is really all about. In the move from Web 1.0 to 2.0, we transformed from pushing information to stakeholders to having a lively dialogue with them using various social media tools (like Facebook, Twitter, blogs, discussion boards, and many more)—where customers and others can say what they really think and feel. Similarly, we are now moving from pushing products to actively engaging with our customers so as to genuinely understand and address their needs with whatever solutions are best for them.

In a customer-focused organization, “the traditional marketing department must be reconfigured as a customer department [headed by a chief customer officer] that puts building customer relationships ahead of pushing specific products.”

I think that the new organizational architecture of customer-driven management is superior to a product-focused one, just as a emphasis on people is more potent that a focus on things.

Similar to customer-driven management, in User-centric enterprise architecture, we transform from developing useless “artifacts” to push out from the ivory tower to instead create valuable information products based on the IT governance needs of our customers.

Further, by implementing a customer-focus in information technology management, we can create similar benefits where we are not just pushing the technology of the day at people, but are rather working side-by-side with them to develop the best solutions for the business that there is.


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July 7, 2008

The Virtuous Cycle and Enterprise Architecture

To move the enterprise into the future, organizations need leaders who have the skills and abilities to generate genuine improved results for the organization. These leaders are not afraid of change, embrace new ways of doing things, and are generally speaking, growth oriented.

The Wall Street Journal, 7 July 2008, identifies the effective leadership traits of those who “demonstrate a virtuous cycle of beliefs and behaviors.” Here is my cut at them:

  1. Outlook on change—it starts with their outlook on life; effective leaders see “life as a journey of learning, [and] therefore embrace uncertainty, seek new experiences, [and] broaden [their] repertoire. This is in contrast to managers who follow the “vicious cycle” with an outlook that “life is a test,… [they] fear uncertainty, avoid new experiences, [and] narrow [their] repertoire. Leaders rich in experience often either come up the ranks, having been trained and worked in various diverse jobs internally or having worked in a multitude of external organizations in similar or different industries, but in either case, these leaders have been tested time again and have a developed a history of success in the face of constant or frequent change.
  2. Customer view—effective leaders “understand customers as people” (versus seeing them only as data points), and they are thus, better able to detect new growth opportunities. This reminds me of the user-centric approach in enterprise architecture that I espouse. If we focus on the end-user/customer, and take an thoughtful approach to genuinely satisfying their needs, rather than just trying to make a sale, then we will always be working to do things better, faster, and cheaper. This is a long-term growth approach, rather than a short-term market share or stock price watcher view.
  3. Action-orientation—virtuous leaders manage risk through action instead of through analysis paralysis, and they place “small bets quickly” rather than big bets slowly. One manager at a confectionary company put it this way, “get the products into the marketplace, and then start to understand what works and doesn’t work. If it doesn’t work, either take another shot at it or cut your losses.” That’s the price of learning. While this approach seems a little too loosey goosey; I do see the value of cutting off the analysis phase at a reasonable point, making a decision, and then following through with corrective action as needed.
  4. Agility—great leaders are agile and believe that “abilities are malleable” and with change can come growth, as opposed to believing that “abilities are immutable” and leaders being fixed in their way of doing things. There is a need for entrepreneurial leaders who while not risk seekers, are able to take calculated risks. They change as often as necessary to remain agile, growing their own and their organization’s capabilities in meeting customers’ needs, but they do not change for changes sake alone.

What interesting is that each and every trait identified here for effective leadership centers around change—embracing it, acting on it, managing it, and remaining nimble in the face of ever changing circumstance. This is highly consistent with the enterprise architecture view of identifying the baseline, target, and transition plan and moving the enterprise ever forward in the face of constant change.


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April 30, 2008

Customer Experience Management and Enterprise Architecture

Customer service is so important. We need to architect it in every fiber of the organization. Good customer service is a critical differentiator for organizations and it offers a strategic competitive advantage to those enterprises that embrace it and make it central to their product offering.

DM Review, 25 April 2008, reports that “companies are under unprecedented pressure to optimize the customer experience.”

Customer Experience Management (CEM) is emerging as an increasingly important tool. CEM is the practice of actively listening to customers, analyzing what they are saying to make better business decisions and measuring the impact of those decisions to drive organizational performance and loyalty.”

CEM information should be considered an essential component of the business perspective of the enterprise architecture. CEM should be incorporated into EA planning and governance to accelerate and improve enterprise decision making such as “tailoring products to customer desires to save investment in unwanted innovations.” The overall goal is to provide the customer with world-class service and an overall high satisfaction interaction.

How are organizations achieving CEM?

  1. Chief Customer Officer (CCO)—establishing executive positions that are focused on the customer experience and on earning high marks for customer satisfaction.
  2. Measurement—“putting tools in place that measure the customer experience” and provide feedback to the organization. These tools include customer satisfactions surveys, focus groups, blogs, point-of-sale data/trends, and customer relationship management (CRM) systems that “hold valuable comments from emails, support cases, and online conversations between contact centers and customers.”
  3. Process improvement—using customer feedback and measurement to tune processes, streamline them, and eliminate defects.

Unfortunately, “still at many companies today, the potential of CEM remains untapped.” It behooves the enterprise architects to help drive CEM as a major source of business intelligence and for use in enterprise architecture planning and governance for new investments.

Ultimately, just like the EA end-user is the final arbiter for driving the development of the EA information products (so they are useful and usable), so too the customer is king when it comes to influencing the organizations’ future direction for product, process, technology, and service. If we’re not satisfying our customers, they will find a better supplier to give their business to.


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February 14, 2008

Craigslist and Enterprise Architecture

Craigslist is a centralized network of online communities, featuring free classified advertisements (with jobs, internships, housing, personals, for sale/barter/wanted, services, community, gigs, resume, and pets categories) and forums on various topics.”

Here’s some basic stats on Craigslist:
  • Founded in 1995 by Craig Newmark for the San Francisco Bay Area.
  • Incorporated as a private for-profit company in 1999.
  • Operates in approximately 450 cities in 50 countries.
  • Operates with a staff of 24 people.
  • Estimated annual revenue as high as $150 million in 2007.
  • Sole source of revenue is paid job ads in [11] select cities [and apartment listing in NYC].
  • Over nine billion page views per month, putting it in 56th place overall among web sites worldwide, ninth place overall among web sites in the United States, to over thirty million unique visitors.
  • Over thirty million new classified advertisements each month, Craigslist is the leading classifieds service in any medium. The site receives over two million new job listings each month, making it one of the top job boards in the world. (Adapted from Wikipedia)
Craig has taken basic website technology and revolutionized the business of classified advertising, and for the most part making it free of charge!

Why is Craigslist such a success?

I believe it is because of Craig Newmark’s almost complete adherence to user-centric enterprise architecture principles.

Here are some examples of this:
  • User Focus-- “In December 2006…Craigslist CEO Jim Buckmaster told Wall Street analysts that Craigslist has little interest in maximizing profit, instead preferring to help users find cars, apartments, jobs, and dates.” (Wikipedia)
  • Customer-driven—“People suggest stuff to us, we do what makes sense, and then we ask for more feedback,” says Craig Newmark.
  • Customer-service—Craig Newmark’s official title is founder and customer service representative. When asked where Craig sees Craiglist in five years, he states: We always need to improve customer service. For example, we need better tools to detect and remove spam listings.”
  • Rejected annoying banner ads—“At the end of 1997, [we] hit a million page views a month. Then the folks at Microsoft Sidewalk wanted to run banner ads on the side, and at market rates, that would be all the money I needed to live. [But] I figured…I don’t need the money, and many banner ads are pretty dumb.”
  • Technology-enabled—“We’re just starting. We have to improve technologies, like multicity search.”
  • Culture of service—“We think we have a really good culture of trust and that’s because…we have stood by some core shared values. The fundamental value is that we feel you should treat people like you want to be treated.”

The only non-user-centric EA aspect of Craigslist is the quirky look and feel of the site, which is white, mostly text-based. As Craig acknowledged, “someone said our site has the visual appeal of a pipe wrench.”

(Adapted from ComputerWorld Magazine, 4 February 2008)

If Craigslist would take the leap and make the site more visually appealing, I believe we have a User-centric EA winner!


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