How is it possible for a local company to defeat global giants like Pepsi, Coca-Cola, and Watsons in your market segment and establish market leadership for more than a decade? The answer is given by Nongfu Spring, a Chinese company in manufacturing and retail industries. In my recent report “Case Study: Technology Innovation Enables Nongfu Spring To Strengthen Market Leadership”, I analyzed the key factors behind their success, and provide related best practice from enterprise architecture perspective. These factors include
Business strategy is enterprise architecture's top priority. EA pros often need to be involved in project-level IT activities to resolve issues and help IT teams put out fires. But it's much more important that architects have a vision, clearly understand the business strategy, and thoroughly consider the appropriate road map that will support it in order to be able to address the root causes of challenges.
Agile infrastructure sets up the foundation for scalable business growth. Infrastructure scalability is the basis of business scalability. Infrastructure experts should consider not only the agility that virtualization and IaaS solutions will provide next-generation infrastructure, but also network-level load balancing among multiple telecom carriers. They should also refine the network topology for enterprise security.
The IT services industry is being challenged on two opposite fronts. At one end, IT organizations need efficient, reliable operations; at the other, business stakeholders increasingly demand new, innovative systems of engagement that enable better customer and partner interactions.
My colleagues Andy Bartels and Craig Le Clair recently published thought provoking reports on an emerging class of software — smart process apps — that enable systems of engagement. In his report, Craig explains that “Smart process apps will package enterprise social platforms, mobility, and dynamic case management (DCM) to serve goals of innovation, collaboration, and workforce productivity.” In other words, smart process apps play a critical role in filling gaping process holes between traditional systems of records and systems of engagement.
Ten years ago, open source software (OSS) was more like a toy for independent software vendors (ISVs) in China: Only the geeks in R&D played around with it. However, the software industry has been developing quickly in China throughout the past decade, and technology trends such as service-oriented architecture (SOA), business process management (BPM), cloud computing, the mobile Internet, and big data are driving much broader adoption of OSS.
OSS has become a widely used element of firms’ enterprise architecture. For front-end application architecture on the client side, various open source frameworks, such as jQuery and ExtJS, have been incorporated into many ISVs’ front-end frameworks. On the server side, OSS like Node.js is becoming popular for ISVs in China for high Web throughput capabilities. From an infrastructure and information architecture perspective, open source offerings like Openstack, Cloudstack, and Eucalyptus have been piloted by major telecom carriers including China Telecom and China Unicom, as well as information and communication solution providers like Huawei and IT service providers like CIeNET. To round this out, many startup companies are developing solutions based on MongoDB, an open source NoSQL database.
Familiarity with OSS is becoming a necessary qualification for software developers and product strategy professionals. Because of the wide usage of OSS among both vendors and end users, working experience and extensive knowledge with OSS is becoming a necessary qualification not only for software engineers, but also an important factors for product strategy professionals to establish appropriate product road maps and support their business initiatives.
I recently finished reading Moneyball, the Michael Lewis bestseller and slightly above-average Hollywood movie. It struck me how great baseball minds could be so off in their focus on the right metrics to win baseball games. And by now you know the story — paying too much for high batting averages with insufficient focus where it counts —metrics that correlate with scoring runs, like on-base percentage. Not nearly as dramatic — but business is having its own “Moneyball” experience with way too much focus on traditional metrics like productivity and quality and not enough on customer experience and, most importantly, agility.
Agility is the ability to execute change without sacrificing customer experience, quality, and productivity and is “the” struggle for mature enterprises and what makes them most vulnerable to digital disruption. Enterprises routinely cite the incredible length of time to get almost any change made. I’ve worked at large companies and it’s just assumed that things move slowly, bureaucratically, and inefficiently. But why do so many just accept this? For one thing, poor agility undermines the value of other collected BPM metrics. Strong customer experience metrics are useless if you can’t respond to them in a timely manner, and so is enhanced productivity if it only results in producing out-of-date products or services faster.
The pace of business change is accelerating. The reason why it is accelerating is the mushrooming of disruptive factors: your customers expecting anytime/everywhere access to you through their mobile devices, competitors leveraging big data technology to rapidly execute on customer-centric value propositions, and new market entrants with lean business models that enable them to outmaneuver your business.
Most companies deal poorly with disruptive change. If they are the “disruptor,” seeking to use these disruptive factors to steal market share, they often run without a plan and only after, for example, a poor mobile app customer experience, realize what they should have changed. If they are the firm being disrupted, the desire for a fast response leads to knee-jerk reactions and a thin veneer of new technology on a fossilized back-office business model.
This is where the value of business architects and business process professionals comes to play: you help your company plan and execute coherent responses to disruptive factors. That’s why your company needs you to attend Forrester’s Business Architecture & Process Forum: Embracing Digital Disruption in London on October 4 and Orlando, FL on October 18–19, 2012.
We’ll start with James McQuivey describing how technology is changing the playing field for disruption in his keynote: The Disruptor’s Handbook: How To Make The Most Of Digital Disruption.
We’ll look at how firms have used technology to rethink their operating models, eliminating low-value activities to focus on what their customers value in Craig Le Clair’s Implementing The Different In The Age Of Digital Disruption.
KANA Software is acquiring Sword Ciboodle — a Scottish case management and BPM company and a strong performer in Forrester's 2011 Wave™ on dynamic case management. The Ciboodle platform has a strong presence in the service request area of case management and scored particularly well in the application development, automation, and event management criteria. It also proved you can build best-in-class software while headquartered in a Scottish castle.
The acquisition makes a lot of sense. Both companies circle around the customer service area — with KANA focusing on the self-service channel with advanced email and knowledge strategies that leverage the social channel, and Voice of the Customer text analytics. All with the goal to reduce service costs by having customers help themselves — without going crazy in the process. But KANA had very little in contact centers themselves. Sword plugs this gap with over 50 customers in contact centers that use BPM and case management to provide a process layer on top of systems — where green screens are not uncommon. But Sword had virtually nothing for the email and self-service channels.
Together the acquisition will free up KANA's R&D. Instead of beefing up core BPM and case engines, and internal enterprise social capabilities, it can now focus on mobile apps and enhancing overall outside in "listening" capabilities. Geographically the acquisition helps as well. KANA was 70 percent North American, but with the addition of Euro-centric Sword is now closer to a 50/50 split between North America and Europe, the Middle East, and Africa (EMEA).
Customer service managers don’t often realize that data quality projects move the needle on customer satisfaction. In a recent Forrester survey of members of the Association of Business Process Management Professionals (ABPMP), of the 45% who reported that they are working on improving CRM processes, only 38% have evaluated the impact that poor-quality data has on the effectiveness of these processes. And of the 37% of respondents working on customer experience for external-facing processes, only 30% proactively monitor data quality impacts. That’s no good; lack of attention to data quality leads to a set of problems:
Garbage in/garbage out erodes customer satisfaction. Agents need the right data about their customers, purchases, and prior service history at the right point in the service cycle to deliver the right answers. But when their tool sets pull data from low-quality data sources, agents don’t have the right information to answer their customers. An international bank, for example, could not meet its customer satisfaction goals because agents in its 23 contact centers all followed different operational processes, using up to 18 different apps — many of which contained duplicate data — to serve a single customer.
Lack of trust in data negatively affects agent productivity. Agents start to question the validity of the underlying data when data inconsistencies are left unchecked. This means that agents often ask a customer to validate product, service, and customer data during an interaction — increasing handle times and eroding trust.
We all know that the gap between a customer’s expectations and the service they receive is huge. Customers are increasingly knowledgeable about products and demand value-added, personalized service. Businesses struggle with understanding which initiatives will move the needle in a positive direction and are thus worth investing in. Here is the second tip in my 10-part blog series on how to master the service experience.
Step 2: Is your customer service aligned with your company brand?
Meeting the needs of your customers are important. However, it’s just as important to stay true to your brand and design a service experience that supports your value proposition. Customers need to know what your company represents — which is especially important in the message-cluttered social media world that we live in — and have this brand reinforced every time they interact with you during the sales process, and for every interaction after the initial sale.
These companies have aligned their service offering to help reinforce their brand with their customers:
Apple. Its products are high-style and priced at a premium. Apple’s customer service is very much in line with its brand. The firm delivers customer service on the customer’s terms — you can arrange a phone call with an Apple Expert who specializes in your exact question and can talk with them now or later at your convenience. They’ll even call you. You can email Apple or browse its extensive knowledge base.
Development leaders! Project leaders and business analysts! Application and solution architects! Want to move forward on your business technology (BT) journey and be viewed by your business stakeholders as a valuable team member? Take a tip from last week's Forums held in Boston. Embrace Business Process Management (BPM) And Customer Experience. Don't ignore them, embrace them. Why? They're essential to helping you achieve your business outcomes.
I know, I know. You read the above and now think "Gee Kyle, what's next? Going to enlighten me on some new BPM or customer experience management technology that's going to transform my very existence, my company's future?"
Nope. Let me explain....
Last week we hosted more than 250 of your application development and delivery and business process peers in Boston and focused on how to succeed in the new world of customer engagement. The most impactful discussions I heard were the side conversations we held with attendees, sometimes occurring over dinner and cocktails. We didn't discuss technology. We discussed the skills your peers were developing in two fundamental areas:
BPM - no, not the technology but the Lean and Six Sigma based methods, techniques, and tools organizations use to focus on business processes and not functions; to strive for continuous improvement; and to focus on customer value.
Customer experience - defined more eloquently by my peer Harley Manning, but I'll summarize as the methods, techniques, and tools used to understand how customers perceive their interactions with your company.
I recently published a sample business capability map for insurance firms as a way to illustrate many aspects about the description and use of this business architecture methodology. One of the readers of this report commented “It seems the business capability maps provide value as a complement to existing methodologies” and referenced Strategy Maps and Business Process Modeling. This made me realize that I should explain more how Forrester sees capability maps as more than a complement – and why we, along with many of our clients are so ‘jazzed up’ about this methodology.
A bit of background: Forrester views capabilities as stable elements of a business model, where the dynamics of a firm are reflected in the business goals for the capability, and the processes, functions, information and other assets which are how a capability is delivered. A capability map describes all the capabilities, and the relationships between them, which an organization needs to have as part of their business model to achieve outcomes. Think of Sales as a simple example, where there are business goals and associated metrics for Sales, and processes, functions, information and people assets necessary for this capability to be delivered. And Sales has a relationship to Fulfillment, to Customer Service and to Marketing.