IT as the Catalyst of CE Transformation
High-performing IT organizations are 44 percent
more likely to recognize the strategic role IT plays in
increasing customer satisfaction.
—ACCENTURE, 2010
Reza Soudagar, Vinay Iyer, and Dr. Volker G. Hildebrand
AS WE’VE SEEN IN THE LAST TWO CHAPTERS, technology is at the heart of delivering the customer experience edge consistently and profitably. Because of this, customer experience (CE) offers CIOs the opportunity (and the challenge) to secure a spot at the table when the company’s business leaders are setting the customer experience strategy.
The CIO is in a prime position to be a key player in making the customer experience initiative successful. Such an initiative is a crossorganizational pursuit that depends on connected processes and unified goals and strategies. Many IT organizations have already been involved with enterprisewide efforts, such as business process management and application integration, that required coordinating people from multiple departments. As a result, many have acquired the skills, know-how, and cross-organization visibility that are needed for customer experience initiatives.
Business departments all have their own objectives and their own internal processes. IT has the overview perspective that can bring these individual perspectives together, balance their various needs, and bring them into alignment. In the customer service organization, for example, reducing the cost of service is still a big concern. IT is often asked to help with technology projects that enable self-service. When this happens, IT can play an important role in helping the organization keep the bigger customer experience picture in mind by emphasizing the danger of sacrificing customer centricity to achieve short-term efficiency.
A second example is IT’s ability to unify departmental processes. A marketing organization, for instance, might generate high volumes of customer leads, but what if these are not the right leads from a customer profile perspective? Or what if there is no follow-through because of broken processes or disconnected tools? Very often, marketing is using a leadgeneration tool that is disconnected from the sales force’s sales force automation system. The IT organization can bring the two departments together by communicating the benefits to both parties of having a connected and unified solution.
As the organization that manages the business’s systems, applications, and databases, IT owns the data across the organization. Through business intelligence initiatives, it is IT that provides critical insights into data across the enterprise. IT enables process automation and efficiency, as well as rapid change and agility. All that said, IT is in a prime position to also enable the four pillars of customer experience: reliability, convenience, responsiveness, and relevance.
The CIO Challenge
The challenge for CIOs is to adopt behaviors that enable their departments to live up to this type of role. If they don’t, the job may be filled by someone from the business side who has an interest in technology. In a recent Harvard Business Review blog post, Constellation Research’s Wang defines four personas of next-generation CIOs (see Table 9.1).
TABLE 9.1: The Four Personas of the Next-Generation CIO
Source: Constellation Research.
Wang points out that most CIOs today fit squarely into the first category, chief infrastructure officer. It would be fairly easy for many of them to make the transition to the chief integration officer role; however, it would take strong business acumen to evolve into the two higher-level roles, he says. It is these two higher levels of CIO that can look across organizational boundaries, align IT strategy with the business, and use IT as a catalyst for business transformation.
A second challenge is that with software as a service and other cloudbased computing technologies, it’s easy for leaders of business departments to make technology decisions that deal with their immediate needs without involving IT at all. If the head of the sales organization determines that he needs a better view into his weekly pipeline or a better way for sales reps to track their activities, for instance, he can subscribe to a sales force automation tool for his staff, using his credit card. If he went to IT with this request, he might be told to wait until next year’s enterprise resource planning (ERP) upgrade. In some cases, business heads find it easier to go around IT.
Overcoming these challenges means that CIOs need to get out in front of the customer experience initiative and align it with the lines of business. In order to get business leaders on board, IT needs to balance immediate business needs with the fact that customer experience is not something that you achieve overnight, and certainly not through a sales force automation tool that’s totally disconnected from all the other systems that manage all the other processes that ultimately serve the customer.
In order to be a catalyst for change, IT needs to show the lines of business that it can respond to their immediate and tactical needs, but at the same time, show them the path to grow strategically, which at the end of the day offers much more value.
According to a recent survey by Yankee Group, more CIOs are ready for the challenge. In the survey, CIO and CTO respondents agreed that business objectives, rather than the latest and greatest technology offerings, are driving their decisions. The vast majority (91 percent) of largeenterprise respondents (those with more than 10,000 employees) rank “improving customer experience” as their number one corporate goal, according to Yankee Group’s “2010 CIO FastView Survey: CIOs Make Business the Priority.” While reducing costs and increasing employee productivity are important to enterprise CIOs, strategic growth and business goals take top billing among CIO priorities.
And according to a recent Accenture study, high-performing largecompany IT organizations not only manage IT like a business, but also run IT for the business and with the business. CIOs at these organizations are engaged in their company’s business strategies—including CE initiatives— and are able to map out how IT supports those strategies. According to the survey, high-performing IT organizations are also 44 percent more likely to recognize the strategic role that IT plays in increasing customer satisfaction. Accenture defines high performers in IT as those that achieve “excellence in IT execution, IT agility and IT innovation.”
Business executives also appear to recognize that just as technology is essential for the customer experience, so is the IT organization itself. In a recent Cognizant Technology Solutions survey, nearly three-quarters (71 percent) of U.S. business and technology executives and 57 percent of those in Europe said that they expected IT to play a greater role in enhancing the customer experience. Nearly half of all respondents said that IT will help enhance the business’s revenue-generating capabilities.
CIOs in Action
A case in point is the Verizon Wireless CIO, Ajay Waghray. For Waghray, “Everything and anything we do is all about the customer. That is really the backbone of our thinking.” There are two drivers behind any technology implementation, he says: to provide customer value and to create enablers to move the business forward.
An example that he cites is creating an online experience that could scale to the levels required following the launch of the Apple iPhone. With more than 60 percent of the company’s orders coming over the Web, Waghray knew that online volumes would explode after the iPhone introduction. With scalability in mind, he simplified the steps required for conducting online transactions and ensured that customers would get consistent information across channels when checking on phone upgrade pricing and eligibility. It was key, he says, for them to get the same answer regardless of the channel they used.
As it turned out, in the first two hours of the launch, between 3:00 and 5:00 a.m., he says, “We had higher volumes than any of our previous launches. It was historic, and IT enabled it—we handled it in a flawless way.”
Despite its many acquisitions, Verizon Wireless had previously consolidated its billing systems, from 30 different systems down to 1, over a period of seven years. This provides numerous benefits, such as consistent customer processes and procedures. “The customer benefits tremendously,” Waghray says. “Whether you walk into our store in Orlando, Chicago, or California, you will get the same service results consistently at all times.” Customers can also view balances, change plans, upgrade devices, or change their address from either their phone, their PC, or an in-store kiosk. “They all have the exact same look, feel, and flow,” he says.
Collaboration and teamwork across business departments, he says, is key. “We bring forth the ideas, and we have a partnership with the marketing arm and the operations arm. This is a journey, and it takes a lot of time to build.”
As for business drivers, while self-service capabilities do save costs, that is not the main focus, Waghray says. “Saving costs is just a byproduct,” he says. “If you improve the customer experience, it generally is a win-win all the way around.”
Gil Katz is another CIO who has played a key role in leading the customer experience initiative of his employer, Israeli automobile importer Colmobil Corp. When Colmobil made the strategic decision to transform itself from a product-centric to a customer-centric company, Katz not only helped drive the decision-making process, but also felt that it was his duty to present the various strategy and technology options to the business leaders. “When management decided to take this road, it was my assignment to fulfill the promise,” he says. “You first need to have the right infrastructure and tools, and only then go through the additional organizational changes.” (For the full story of Colmobil’s customer experience transformation, see the case study in Chapter 7, page 129.)
IT’s Role in a Profitable CE
As part of the CE leadership team or centralized CE organization, CIOs and their staffs will need to be involved in building a lot of bridges internally. Traditionally, this may not have been a big part of the IT organization’s portfolio of skills. But CIOs need to ensure that the IT organization forms collaborative, strategic relationships with enterprise departments to help the company develop effective and measurable ways to target, acquire, and stay intimately connected with its customers. Partnerships need to be formed with product development, marketing, sales, customer service and support, brand management, and customer-facing roles. Employee empowerment is also an IT/business collaborative concern. New metrics need to be developed, in tandem with the business, to measure the right things, using the right data. (For a fuller discussion of the new metrics of customer experience, see "Measures of Success", “Measures of Success.”)
According to Forrester Research, Inc., the leaders of a centralized customer experience organization need to have a strong network of relationships with other groups in the company from the start, as well as a natural ability to read people, sense resistance, and encourage collaboration across multiple groups. These abilities will play a big role in the CE initiative’s success.
Looking outward, CIOs have a major role to play in ensuring a highvalue customer experience via technology. The customer experience involves the entire enterprise, and therefore it is an initiative that many people in many departments will want to be involved with. We’re not advocating that CE become yet another political battlefield in which the winner gets to “own” the initiative. What we do know is that if customer experience is to be profitable, it needs to be guided by a centralized crossorganizational team. And who is better positioned to provide guidance on the technology decisions that could make or break CE success than IT?
Notes
Quoted material that is not referenced is from personal interviews.
1. Ray Wang, “The Four Personas of the Next-Generation CIO,” The Conversation blog, Harvard Business Review, March 3, 2011,
http://blogs.hbr.org/cs/2011/03/the_four_personas_of_the_next-.html.
2. “2010 CIO FastView Survey: CIOs Make Business the Priority,” Yankee Group, March 2010,
http://web.yankeegroup.com/rs/yankeegroup/images/2011CIOPriorities_ Fastview_Snapshot.pdf.
3. “Accenture Survey Finds that High-Performing IT Organizations Hit the Ground Running Following the Economic Downturn,” Accenture,
November 2010, http://newsroom.accenture.com/article_display.cfm?article_id=5102.
4. “The Future of Work Has Arrived: Time to Re-Focus IT,” Cognizant Business Consulting, February 2011,
http://www.cognizant.com/RecentHighlights/CBC_FoW_Refocus_on_IT.pdf.
5. “What Makes a Centralized Customer Experience Team Successful?” Megan Burns’ Blog for Customer Experience Professionals, Forrester Research, Inc., May 14, 2010,
http://blogs.forrester.com/megan_burns/10-05-14-what_makes_centralized_customer _experience_team_successful.
Bibliography
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