Does your technology plan tied together with your long term strategy?

What's more, a recent Forrester survey found that although 50% of firms say that investing in systems to improve engagement with customers and partners is a high or critical priority, the majority see workforce computing technology as a cost and risk center, instead of an enormous opportunity for competitive advantage. Why? Because there is seldom a clear destination in mind, a rational plan to get there, and a viable system in place to execute the plan. Most of the time, the destination and the means to get there are only vague estimates, and the elements of strategy are rooted in hope.

           

              David Johnson                                       

            4 Key Elements: Strategic IT Plans         

Information Week                                   

Too often, companies view technology as a cost to avoid unless necessary.  This results in multiple systems within the company – each purchased to optimize a particular department or function, but don’t strategically fit together very well.

Before you can have a well define, robust IT strategy, you need a well define long term strategy.  Then you can tie your IT plan to your long term strategy.

Many studies indicate that over 80% of all new technology system investments fail to live up to expectations.  And, as more and more of the IT system spending "exits" the IT department, it will only get worse.

Companies have to hold IT and Marketing systems accountable just like any other part of the operations. So investment upgrades in these systems should focus on:

·         New opportunities in new markets by adding capabilities companies currently don’t have.

·         Increased revenue

·         Decreasing cost

·         Increasing productivity

Five things will help insure that your IT and Marketing system projects come in on time and on budget.

1.        Make sure that you have a well define set of requirements, with critical dates, budgets, and check offs that everyone agrees to before any work starts on the project.  This will prevent scope creep and help keep the current budget under control. In reality, this may take up to 25% of the time for the project implementation if done correctly.

2.       Assign an Executive Management sponsor to oversee the project. Make sure that regular updates are provide to the Executive team and critical deadlines and milestones are hit. 

3.       Put someone in charge of the project that has relevant experience.

4.       Insure extensive testing is done.

5.        Do one let the deadline drive the implementation  schedule.  Especially do not pick a dead and then work backwards to determine the schedule.

Virtually no IT or marketing systems have failed due to a technology issue. It seems that all the systems failures studied fail due to a process implementation issue.

Anywhere else in the organization, this would not be tolerated. Yet again and again, studies indicate that up to 60% of all IT system implementations either fail to deliver the promised results, hit the deadline, or over run the budget by more than 50%.

IT Investment Questions to Consider:

  

·         Has the project requirements truly been scoped out and everyone agreed to these requirements?

·         Do we have the right person leading the project implementation team?

·         Can we live with it if this project goes over budget by 50% or takes 50% longer than plan?

·         Has the opportunity and threat from IT been quantified by business unit and by market?

·         If so, how much?

·         And whose head is on the chopping block to make these numbers (revenue, cost) work?

·         Do our current plans reflect that opportunity?

·         Do our current plans minimize any threat?

·         What are the risks we are taking OR not taking by accepting this level of investment?

·         Do our investments in IT match our strategic plans?

·         How do they match up?

·         What capabilities do this provide that we do not currently have?

·         How can we compete better, stronger, faster, in which new markets due to this investment?

·         How long will it take?

CASE STUDY  - HOW DANGEROUS ARE IT PROJECTS?

Why Your IT Project May Be Riskier Than You Think

An alarming study by Flyvbjerg and Budzier published in the Harvard Business Review has made everyone stand-up and take notice. The coherent advice being that IT projects are much more riskier than we think.

"When we broke down the projects’ cost overruns, what we found surprised us. The average overrun was 27%—but that figure masks a far more alarming one. Graphing the projects’ budget overruns reveals a “fat tail”—a large number of gigantic overages. Fully one in six of the projects we studied was a black swan, with a cost overrun of 200%, on average, and a schedule overrun of almost 70%. 

This highlights the true pitfall of IT change initiatives: It’s not that they’re particularly prone to high cost overruns on average, as management consultants and academic studies have previously suggested. It’s that an unusually large proportion of them incur massive overages—that is, there are a disproportionate number of black swans. 

By focusing on averages instead of the more damaging outliers, most managers and consultants have been missing the real problem."

HBR, Sept, 2011

Customer Expectations - Then and Now

After British Airways lost his father's luggage, Hasan Syed didn't just tweet his complaints at the company. He paid for a "sponsored tweet" to broadcast his frustration directly to British Airways 302,000 Twitter followers.

"Don't fly @BritishAirways,"

                                     Sept 2rd, 2013

Customer expectations change.  And these expectations change as customers experiences change. And today, when a customer experiences bad customer service, he or she can tell everyone in the world about that bad experience.

The term delighting your customer has taken on a cliché.  And everyone seems to agree with that approach.

Forget it.

Consumer's punish companies that provide bad service far more often that they reward companies for exceptional service.  

Customer that receive high mark for great customer service start early.

These companies build the customer expectation in the in the customer's mind.

These companies make sure that they build the right expectations. 

Then they deliver on those expectations day in and day out every time they interact with the customer. 

The new rule: 

Customer’s used to compare your customer service to your direct competitors. Now, customers compare your customer service to best in class providers from any industry.

If you do build a great experience, customers tell each other about that. Word of mouth is very powerful.

If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.
                       

                        Jeff Bezos, CEO Amazon

Companies that rank highly for "exceptional customer experience" take care to build customer expectations and then match those customer expectations to what they delivery.

Amazon, Nordstrom, Publix, Apple, FedEx and Costco all rank as "companies providing the best customer experience" year in and year out.

And all make sure they match customer expectations to customer experience.

True customer loyalty centers on how often people will recommend a company to someone else.  And if you ask them why they make this recommendation, most say the same thing - use this company and they won't disappoint you.

So the question  a company should ask is:

 What do customer want, do these match the expectations we have built in our customer's mind, AND can we meet or exceed these expectations day in and day out?

And does the technology we provide allow us to do these things,  or does it hinder us,  or prevent us from doing these things?

Companies' have to listen to customers. 

And customers speak in many different places today.

What do customer want, do these match the expectations we have built in our customer's mind, AND can we meet or exceed these expectations day in and day out?

And does the technology we provide allow us to do these things,  or does it hinder us,  or prevent us from doing these things?

Companies' have to listen to customers.  

Social media gives customers more places to talk to each other, to company, and to the general public than at any time in history.

This means collecting both structured and unstructured data (text messages, video, location, etc). 

The amount of unstructured data created now exceeds the amount of structured data many time over each day.  

Companies have to know what customers are saying about their companies and their products on a wide variety of social media - Facebook, Flickr, websites, Twitter, YouTube and everywhere else.

And this means investing in technology.

 That technology will include:

·         investing in big data, analytics

·         modeling

·         campaign tracking to understand your customers

 You also have to know where your customers are and in what channels. And why they are in those channels.

Customer's expect that a  relationship with them rather than a transaction.  Companies do that by creating:

·         targeted  messages

·         providing a one on one experiences

·         showing that the company knows the customer.

Companies win or lose customers every day by how they interact with the customer. Each time you interact with your customer, you either exceed,  meet or fall short of that customer's expectation.

And these thousands of daily interactions determine whether your company succeeds over the long term. 

Strategy doesn’t do this, management doesn’t do this.

The day to day interactions make or break company’s ability to meet customer expectations.  And the technology a company provides either helps or hurts this ability.

Not meeting customer expectations drives a consumer to using price as the decision point in selecting you. 

Social Media Overview

Controlling the Message

A key fact that companies simply have to deal with - they have lost control of their ability to control their message to the public.

Today, with social media, anyone can become a publisher. broadcaster, critic or advertiser of bad customer experiences.  

And now, anyone can reach literally hundreds of thousands of existing and potentially customers at minimum cost.

For example, movies are made or broken on opening night on Twitter.

Facebook currently has over 1 Billion active members, Flickr  publishes  over 3.6 billion pictures, and Twitter users post over 200 million tweets a day. YouTube's 600 million users upload more content in 45 days than all the TV material created in the first 70 years of TV.

And if someone doesn't like your product, or your company, he or she can let the whole world know why faster than you can respond.

Meeting customer expectations is no longer a criteria for success but for survival. Exceeding customer expectations and creating customer champions in the social media market place is a criteria for growth.

Customer Expectation Questions to Consider:

·         How do we listen to our customers, collect information from our customers, and use this information to make decisions?

·         How does our customer experience compare with that of leaders in other sectors?

·         More importantly, how do our customers compare our experience to their expectations?

·         Unless your comparing yourself to one of the top 10 industry leaders, this represents the minimum bar to measure yourself against.

·         Customer's now operate in an always on, 24/7  environment, how will we handle those non-business hour request?

·         Are customer expectations set by our industry or by experience in other industries?

·         Do you measure customer expectations on a continuous basis? The best do.

·          And are you improving every year? Are you measuring that improvement?

·         What will our customers expect in the future, and what will it take to delight them?

·         What do your customers really say about you?

·         Are they delighted to do business with you?

·         More importantly, are they willing to recommend you to their friends or associates?

·         How do our technology plans support our customer expectations?

·         Does your technology make it easier for your people to meet or exceed your customer expectations?

·         Or is just a cost center where you try to minimize cost and provide just enough?

·         Do we do business with our customers the way they want us to do business with them? Do we communicate with them the right way?

·         In the right channels, with the right information, at the right time, with the right products?

CASE STUDY LL BEAN REAL TIME OPERATIONS

LL Bean

Real Time Operations

LL Bean consistently ranks as the having the best customer service of any company in the world.  Part of the reason for this outstanding customer service centers on the investment in LL Bean's call center technology.

The company's contact center system is “geared around bringing as much information to the rep as possible, so they don’t have to spend a lot of time memorizing things.”  This includes the customer's past order history, payment history, and preferences.  The goal is simple - make LL Bean easy to do business with and maintain as helpful approach as possible.

Bean’s customers frequently say things like, “‘I bought this really lovely jacket two years ago and I would really love another one. And they might not be able to find it in the catalog they have. So we have access to their ordering history so we can find it pretty quickly – which makes it easier to give them what they need.”

The cataloger has also made its order entry system more visual, she adds. “The images we use on the Web are now available on the order entry system, so the rep is looking at the same thing that the customer is, whether it’s in the catalog or on the Website.”

LL Bean trains it's agents extensively, and relies on a pool of people around it's call centers for temporary staffing that has worked their for years during holiday seasons.  But it also believes that using technology, on a real time or near real time basis, eliminates the "tribal knowledge" requirement, increase effectiveness, and allows more flexible staffing.

Multi-Channel Merchant

Survey Shows LL Bean Top in Customer Service

Technology’s value depends on what it can deliver to a company or the customer

The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.

 Bill Gates            

New technology, by itself, has no value to a company. The company must determine what value it brings to either the company or to the company's customers.

Today, digital technology, and more importantly, the combination of digital technology, database

technology, and new communications methods represents a disruptive threat to many industries. 

Understanding and correctly using these technologies means  the key to growing in the future.

So how does Executive Management make these decision on what technology to focus resources on developing and implementing? 

Each company has to create a specific strategy and develop answers for itself.

And the first question to ask centers on:

How has digital technology change the competitive landscape?

We know that digital technology has already changed the landscape in the following ways:

1)       Barriers to entry have declined across most industries

2)      Traditional competition represents the tip of the spear; new competitors, using new

technology, can literally turn an industry upside down. Consider Amazon and retail.

3)      Mobile devices, once a novelty, are now the norm.  More people access the internet with mobile devices than PCs today.

The right question isn’t - how can we use this new technology?

There are literally thousands of new technologies that can be used in today's business world.

The correct question is – how can technology be use to make our company more efficient?

Or, how can this technology be used by us to allow us to generate new revenue in our existing market

OR a new market?

OR how does this or increase speed to service or increase customer service for our company?

OR how does this position us for doing one of these things in the future?

If  you don't have an answer to one of these questions, then it may be an interesting technology, but not one you should focus on today.

Like it or not, more companies fail on the technology front by focusing on too much, rather than on a doing a few things extremely well.

"People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I'm actually as proud of the things we haven't done as the things I have done. Innovation is saying no to 1,000 things." 

(Apple Worldwide Developers' Conference, 1997)

Steve Jobs   

Some Questions to ask:

·         Who are our current competitors?

·         How does our current technology stack up against them?

·         Are we as good as them, better than them, or worse than them?

·         Are we growing, stagnate or losing customers  to them? Why?

·         Who are emerging competitors?  And why?

·         What are they doing differently than us?

·         What new capabilities do they bring to the table?

·         What are their strengths versus ours?

·         Who are our future potential competitors?

·         Who could be our competitors in a few years?

·         What will allow them to play in our market?

·         How is technology helping us win against traditional and new competitors?

·         What does the new technology allow us to do that we could never do before, or do better than ever before?

·         What can someone else do that we can do because of technology?

·         Are we missing opportunities to expand our marketplace, keep our customers, or expand our customer base?

·         Could we use our technology to provide new value to other customers that aren't using it and why?

·         Can we combine technologies to provide new value?

The Amazon Story

CASE STUDY NEW TECHNOLOGY AMAZON: Predictive Analytics

Predictive Analytics is one of the hottest topics in marketing today. But the concept isn't new. It started in 1956.

Every credit card and mortgage application process uses it as part of FICO Credit Score to determine the default risk.

Amazon took this "old concept" and sometime in the late 1990s, and applied it to retail.  Combining predicative analytics with e commerce,  Amazon created recommended product purchases for its customers.

At its basics, it takes what a customer has bought in the past, what they have in their cart, items that they have rated and liked, and what other similar customers have rated and liked.  It then makes recommendations for additional sales.

Amazon calls this homegrown math "item-to-item collaborative filtering," and it's used this algorithm to heavily customize the browsing experience for returning customers.

In 2012, Amazon's  reported a 29% sales increase to $12.83 billion during its second fiscal quarter, up from $9.9 billion during the same time last year.

The company remains tight-lipped about how effective recommendations are. ("Our mission is to delight our customers by allowing them to serendipitously discover great products," an Amazon spokesperson told Fortune. "We believe this happens every single day and that's our biggest metric of success.")

The results - the fastest growing retail business in the world.

Forbes, Sept, 2012

Forbes, Sept, 2012