Like it or not, the success of your customer experience initiatives depends on business technology.
That’s because the quality of customer interactions with your brand results from a complex system of interdependent people, processes, policies, and technology that we call the “customer experience ecosystem.” And just like a natural ecosystem, when your CX ecosystem gets out of balance, every part of it suffers — especially your customers.
An increasing number of CIOs, enterprise architects, and application developers get this. That surprises many of the marketers and other business people I talk to on a regular basis. But it shouldn’t: Business technology leaders are ideally placed to see the connective technology tissue needed to create a standout omnichannel customer experience.
To help shed insight into the complex interplay of customer experience and business technology, I recently sat down with Stephen Powers, Forrester vice president and research director serving application development and delivery professionals, to record a podcast. You can hear it in its entirety below (episode 1) or choose topic-sized cuts (episodes 2, 3, and 4).
On August 6, 2013, the Indian rupee plunged to a record low of INR61.80 to 1USD. In fact, since January 2013, the Indian rupee has depreciated by 10% against USD and is expected to slide further as India is challenged by political gridlock, serious infrastructure bottlenecks, and decreased investor confidence, all of which are contributing to a slowdown in economic growth. The declining rupee leads directly to increases in the cost of doing business, which has risen by 8-10% over the past year.
The difficult economic landscape has forced Indian firms to look for new and innovative ways to grow their businesses, create efficiencies, and improve responsiveness. This is driving changes in how Indian business leaders view technology – with many increasingly viewing technology as a far more critical means to differentiate their organizations and drive business growth. The pressure is now firmly on CIOs to deliver technology-led business outcomes for their organizations. To exploit this opportunity, CIOs should do the following:
- Develop a ‘business outcomes’ matrix and map existing and planned technology projects against it to build credibility with business leaders: ROI templates are generally developed to gain approvals and are typically limited to cost savings, but very few CIOs actually link their IT spending to clearly defined business outcomes. Define what business outcome means to your organization (e.g., increase in sales, revenue, customer acquisition, customer satisfaction to name few) and map each of your projects against the matrix to prioritize those with greatest business outcomes. This will help CIOs win buy-in from business stakeholders on project funding and priorities, while ensuring that IT is viewed as an equal and capable business partner.
Our research shows that 70% of Indian CIOs or top IT executives will report to CEOs or the senior-most executives in their organizations by the end of 2016. As the boundary between IT and business further blurs, successful CEOs must get more directly involved in business-led technology discussions as a means to differentiate their organization, drive business growth and measure technology success by the business outcomes it delivers. This is driving a fundamental shift in the CIO role as it moves from classic "plan, build, run" cycle management to a business outcome oriented, customer obsessed leadership position. With this backdrop, Forrester holds its second series of CIO summit across Asia Pacific in August and September; the India summit is scheduled for September 3 in Mumbai and the theme of the summit is “Mastering Tomorrow’s Business Outcomes”.
We have an action-packed agenda for the India summit with great mix of Forrester analysts (Dane Anderson, Nigel Fenwick, Bobby Cameron, and Duncan Jones) and industry keynote speakers (Arun Gupta,Chief Information Officer, Cipla; Ram Medury,Vice President, Head of IT, ICICI Lombard; Rajeev Seoni, Chief Information Officer, Ernst & Young). Throughout the day, we will have interactive discussions on how digitally-empowered customers are creating urgency for change by redefining how business is won and what role CIOs can master to digitally disrupt their markets by applying technology to deliver targeted customer value faster, better, and cheaper for potential business outcomes.
In August this year I am heading down to our nation’s capital to take part in the annual itSMF Australia event – LEADit. I have taken part in this event to a greater or lesser extent over the past few years across Australia – Sydney, Perth, the Gold Coast and now Canberra. As an analyst who broadly covers the Service Management space (as well as a previously ITIL qualified practitioner), this event is the mecca for those interested in service management in Australia.
Year after year at this event, I see a fair amount of change in the content and focus, but little change in the thinking, and little real movement in the implementation or improvement of the processes – a recent survey between itSMF-USA and Forrester displays the current maturity levels of processes in organisations:
Here we are – years (decades?) after the first ITIL books were written, and demand management is STILL immature. Even financial management has barely shifted in maturity over the past few years. Why is this the case?
UPDATED 26th June 2013 As you may be aware Microsoft has finally introduced its Office Suite for the iPhone (launched in the US on Friday 14th June, and now available in much of the rest of the world according to my sources). This is great news — it has been one of the real holes in the iOS application store and in high demand in many businesses we speak to (although will be MUCH more valuable when it's available as a native iPad app). Over the next week or so it is likely that many of your senior executives will read this news — as it has already made the consumer press. Soon they'll be knocking down your door asking how to get access to it.
However, the licensing model that Microsoft has chosen is one to encourage the uptake of the Office 365 Suite. ONLY those users with a MS Office 365 license will be able to activate the apps on their iPhone. This may mean a significant licensing impact for you. If, like many companies, you have not yet made the move to Office 365, your company’s employees will not be able to use the Office apps on their iPhone. There is a big risk here that you will see employees activate the license themselves and charge it back through the traditional expenses channel. And if senior management are doing it, it is hard for them to say no to the more junior ranks.
I reached out to Duncan Jones, one of our resident sourcing pros and Microsoft licensing experts to get his analysis of the situation. Here are his thoughts:
I recently analyzed 60 companies in India to understand the CIO reporting structure and the key projects that these organizations are focused on. Some interesting findings from this exercise:
Currently, 40% of Indian CIOs or top IT executives report to CEOs or the senior-most person (president, managing director, etc.) in their organization. Among the other 60%, most report to CFOs (35%), followed by COOs, group CIOs, and chief sales officers.
CIOs who report to CEOs tend to have a 30% higher IT budget than CIOs who report to CFOs, COOs, or group CIOs.
Projects led by CIOs not reporting directly to the CEO focus primarily on reducing IT costs and aligning IT to the business; these projects are typically measured in terms of cost savings.
Projects led by CIOs reporting directly to the CEO are more likely to focus on customer acquisition and retention and measured more in terms of business outcomes for the organization.
Last week, Forrester hosted a breakfast roundtable in Sydney for approximately 20 tech vendors seeking to capitalize on current IT spending trends in Australia and New Zealand. With expected IT spending growth of nearly 4% in 2013, the A/NZ market is still going strong. However, this good health hides major shifts, including the increased role that business decision-makers (BDMs) are taking in direct IT purchasing in areas like staff, products, and services. As a matter of fact, Forrester expects the percentage of IT budgets that IT directly owns or controls to decrease by 2% to 5% between 2012 and 2014 in most A/NZ organizations.
Data from the Forrsights Budgets and Priorities Tracker Survey, Q4 2012 highlights the increasing gap between CIOs and business decision-makers (BDMs) in India — a gap that originates in misaligned perspectives. The rapid rise of social media, cloud computing, and mobility in India has started to significantly affect how organizations do business in the country. Business leaders’ use of consumer technology has changed their expectations of how enterprise IT should be harnessed. They increasingly seek to use technology in innovative ways in order to gain a competitive edge and drive business growth. However, most CIOs are still caught in the old world of focusing exclusively on IT budgets and project delivery performance issues:
I recently spoke with a few CIOs in India to explore their views on the reasons behind this misalignment. When I shared data from the chart above and asked their opinions on the insights, some interesting findings that came out:
There are many “heads of IT” and few “business technology (BT) CIOs” in India. One CIO from a large auto manufacturing firm mentioned that a majority of CIOs in India are actually “IT heads” who think and act mainly from an IT perspective. Even worse, their thinking is generally very hardware-centric. This CIO’s opinion is in sync with my recent report highlighting the fact that Indian CIOs are at risk of losing business credibility (and eventually their jobs) if they do not improve their understanding of BT.
The rapid rise of social media, cloud computing, and mobility in India has started to affect how organizations do business in the country. This is driving a fundamental shift in the CIO role as it moves from classic “plan, build, run” cycle management to a business-oriented, leadership-focused position. To gauge systems integrators’ (SIs’) readiness to support the changing CIO role, Forrester interviewed CIOs at 30 Indian companies and has just published a report on the same. For the purposes of this report, “Indian SIs” includes SIs headquartered in India and multinational SIs doing business in the country. We conducted interviews with CIOs in the form of open discussions; our aim was to determine CIOs’ opinions about their SIs, including how effectively those SIs are shifting to a more value-added, business-oriented engagement model. These interviews yielded some grim findings, as CIOs believe that SIs:
Don’t understand the business requirements of the CIO role. Only 28% of CIOs think that SIs understand their changing business requirements, while 70% of CIOs think that SIs focus too much on technology delivery.
Focus too much on upselling or cross-selling their products and solutions. SI teams, including account managers and consultants, usually focus more on promoting products and services; they have very little knowledge of what CIO and client organizations are looking for and don’t care to learn.
Lack the tools and templates to define the business value of emerging technologies. Most of the CIOs indicated that they believe that SIs are not able to define the business value of emerging technologies.