IT and business no longer exist in separate universes. IT is now a direct stakeholder in the creation of business value. The introduction of new IT-powered business-enablers in the enterprise ecosystem, like cloud computing, Big data, Enterprise Mobility, and Social Media, has made the Business–IT correlation more critical, even indispensable. Of course, tools like Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) continue to be part of the IT landscape, but it is these new enablers that have made Business and IT integral to each other. Quite clearly, IT has broken free of the back office, and it is time to redefine it using a new set of constituents.
Much of the technological revolution that we see around us is a result of diverse technologies converging to spawn new products and applications. The smartphone, laptop computer, IP-TV, and Voice-over-IP are some familiar examples of convergence from the IT and telecom world. It is common to use the term ICT (Information and Communication Technology) to refer to converged IT, telecommunication, and media streams. ICT covers any product or service that can store, retrieve, manipulate, transmit, or receive information in digital form. While IT and telecom are primary enablers of ICT, the reach of ICT extends to every industry (Figure 3.1). Trends in ICT enable new developments—sometimes entirely new markets—in banking, health care, education, government, and other industry verticals.
Figure 3.1 ICT ecosystem
Interestingly, there’s an ICT development index (IDI), which is published by the International Telecommunication Union (ITU, A United Nations body). IDI measures and compares ICT performance of various countries on specific parameters based on ICT infrastructure, usage/adoption, and skills available. It’s one of the most valuable tools for benchmarking the important indicators of information society globally. ICT is an indicator of the economic development of nations. Countries with higher ICT development index are in a higher per-capita income bracket, with better quality of life. With the decline in global poverty index, there has been increased ICT adoption.4
It would be beyond the scope of this book to go into all the social, political, economic, and environmental implications of ICT. Suffice it to say that ICT is the principal source of new opportunities to foster economic and social prosperity in developed as well as emerging economies.
The ITU report on Measuring the Information Society4 supports our claim that all the major factors for technology-driven business growth are right in place, and the trends are positive. There was never a more opportune time to leverage the combined power of business and technology to create a positive impact across the economic spectrum.
The proliferation of the Internet and mobile networks is among the most visible consequences of ICT growth. The innovative use of the Internet and mobile technologies as the building blocks of enterprise-centric business solutions is driving the digital economy. This also stresses the need for stronger alignment between Business and IT.
In the remainder of this chapter, let us discuss some of the new technology trends spawned by the growth in Internet and mobile adoption that are making waves in today’s business world, and how they are helping to shape the future of business.
The discourse that follows is meant for non-technologists, which most of us are. The use of terms that would make sense only to experts is, therefore, avoided. If terms like platform, framework, virtualized, abstracted, and protocol do not resonate with you, you are not alone. More importantly, you are in no danger. We have, therefore, avoided these terms here. The digital age has replaced the confusing jargon with new and more relatable concepts, which would be universally understood. Terms like cloud computing and social media, for example, are everyday terms that the average person relates with.
Cloud Computing
Cloud refers to a remote cluster of computing resources (servers, storage, applications, and data) accessed by the user over a secure network or the Internet, as a logical extension of the user’s device. In short, it is the place from where experiences are delivered on-demand via the Internet. The practice of using the cloud, rather than the local device, to store, manage, and process data is called cloud computing. Thus, if your data and applications are on a cloud, you can access them from any device. This allows us to view computing through an entirely new lens, with profound implications on the way information is accessed, retrieved, processed, managed, and stored.
Cloud-based computing resources are typically hosted by a cloud service provider (CSP) and made available to the user on-demand. The user may be charged by the CSP based on usage, quite along the lines of utility services like electricity and water. This is a paradigm shift from the earlier practice where you owned computing resources, and these were dedicated for your use alone. Cloud computing can be a very efficient way of utilizing computing power. One of the reasons cloud computing has gained traction with enterprises is the freedom it allows from having to procure capital equipment and the associated infrastructure (like real estate, power, and cooling), and instead leasing the computing resources as a service. Thus, cloud computing allows you to get what you require without the concomitant worries of support, obsolescence, depreciation, and capacity planning. There are some concerns over privacy and security as most companies are yet to come to terms with the idea of keeping their critical data on a third party’s server. These concerns are being addressed through new security approaches, but caution about the privacy of data is always a good thing. In my view, the cloud is no more or less secure than a private data-center, though the types of security concerns are different here Figure 3.2.
Figure 3.2 The Cloud
A cloud can be Private, Public, or Hybrid (Figure 3.3). As the name suggests, a private cloud is exclusive to an enterprise. All resources within a private cloud operate with the sole purpose of providing a distinct and secure environment to a specific unit only. A private cloud can be the enterprise’s own data center, which is an in-house facility with an organized set of servers, storage, and associated hardware and software components that collectively function as the “IT powerhouse” of the unit. Alternatively, this infrastructure could be hosted by a remote third-party Infrastructure-as-a-Service (IaaS) provider who takes care of the management and routine operational overheads on behalf of the client for a fee. In either event, a private cloud is a single-tenancy cloud computing environment. By contrast, a public cloud is a multi-tenancy cloud computing environment, where each client shares the computing resources with several other clients over the Internet. Many of the personal cloud-based services (like iCloud, OneDrive) that we use are examples of the public cloud. Enterprises usually prefer the hybrid model. A hybrid cloud is a cloud computing environment which makes use of a mix of existing private cloud infrastructure and available public cloud services, such as Salesforce.com, with orchestration between the two cloud environments to render the best of both worlds.
Figure 3.3 Hybrid cloud
Cloud computing plays another very vital, but often ignored, strategic role in promoting Business–IT alignment. This is best explained with a real-life example.
Example 3.1
I once participated in a panel discussion with a rather dark theme: “The Death of the CIO”! As a Chief Information Officer (CIO) myself, it is a no-brainer that I chose to argue against this prophecy. The idea behind the theme was that with the advent of cloud computing, there would be nothing for the CIO (read internal IT function) to do, since all the servers, storage, applications, and data would be managed by a third-party in some unseen location. So, the reasoning went, the CIO and his flock would become a redundant entity (hence dead metaphorically). It was a tricky spot because I am a strong proponent of the cloud but not of the CIO’s death!
I argued that cloud would indeed free the CIO of some of the routine operational issues, but in its place, a more strategic role would evolve. Most CIOs today spend far more time in just keeping the show going than on collaborating with Business. Cloud is, therefore, a boon to the CIO who can now pair shoulders with the business to advise and drive strategic solutions that would be of far greater value to the business than the monitoring of IT servers. Second, migration to enterprise-class cloud is not a fork-lift operation. It is an opportunity to reevaluate, consolidate, and revamp your IT architecture to better suit business needs and save costs in the bargain. This requires elaborate and ongoing planning in consultation with Business. Third, the CIO has a better opportunity than before to qualify and prioritize new business requirements, filter and bundle them consultatively, and interwork with the cloud service provider to deliver on time, cost, and quality targets set by the Business. The whole cloud operation, which is run by a partner, must be systematically managed with high efficiency, throughput, and security which places demands of its own on the CIO.
To conclude, the cloud is perhaps a metamorphosis of the CIO but certainly not the death of the CIO. It is a redefinition of the CIO as a more strategic enabler of business success through better-aligned Business and IT priorities.
Cloud computing requires very close Business and IT interplay. Many of the critical business applications that are used by the internal teams (like Salesforce.com), as well as customer-impacting applications like CRM, are now cloud-hosted. Hosting applications on the cloud and rendering them over the Internet to users on a subscription basis is a popular cloud service, known as Software-as-a-Service, or SaaS. A lot of medium-sized enterprises are now relying on SaaS, even for routine business services like e-mail.
A strong BITA in the cloud-enabled world can bring many differentiated offerings to customers quickly. In a company that I worked for, there was an imminent requirement of the business to launch a mobile payment service. The Business and IT teams worked together to identify and evaluate a cloud service provider for this. The CSP agreed to customize an instance (a version of the mobile payments application) as per my company’s requirements, and we were ready to offer this to the market in four weeks. During this period, IT worked diligently on assuring the right interfaces with backend applications, while Business tested the main functionality iteratively in live scenarios and performed quality audits. As we go forward, such interworking will become the norm to bring cloud-based services quickly to customers and take the lead in the market. This can only happen with strong and sustained Business–IT alignment.
Big Data
Big data is another new idea that is very relevant to the times and hence making rapid strides into our business world. Big data means precisely that—when data becomes very big in its volume (size), variety (types), and velocity (throughput and speed of processing), it becomes, quite predictably, Big data. The fourth property generally associated with Big data is veracity (certainty and precision). True to this, we define Big data in terms of these four Vs. At the root of Big data is the abundance of data in the digital world, necessitating new methods for extraction of value from data.
The rate at which data is being created and transmitted today is well beyond our capacity to comprehend. There is an exponential growth in social, enterprise, and machine-generated data in the last five years and the rate of growth is expected to only increase from here. It is not just the volume of data that is staggering, but also the variety—from text messages to high-definition video. A lot of information on individual preferences, behaviors, and trends can be gleaned from this stream, but the question is, how to do it given the high volumes, staggering speeds, and wide variety? This is where Big data comes in.
The Vs that we referred to earlier are very briefly defined in Figure 3.4. The best way to understand them would perhaps be to consider the changes in these Vs in our lifetimes:
Figure 3.4 Big data—the 5 Vs
A. Velocity—Batch → Periodic → Near-Real-time → Real-time → Data Hose (e.g., incessant Twitter feeds in a wide survey)
B. Volume—MB → GB → TB → PB → EB
C. Variety—Table → Database → Web, Photos, audio → Video, Unstructured → Social → Mobile → Mix of these
The V in the center of the diagram here represents value, to unleash which we require special techniques that can handle huge volumes, high velocity, and large variety, simultaneously. Big data has spawned many emerging technologies, most notably Machine Learning and Artificial intelligence, which use smart algorithms to extract value from Big data, leading to contextual responses (e.g., facial recognition).
In the enterprise context, data is meaningless if it does not lend itself to analysis, transform into useful information, and generate meaningful insights that support business decision making. While we are creating tons of data, do we have the tools and the skills to process (i.e., read, decipher, and classify) such huge volumes of data in reasonable timeframes? A business can no longer wait for days to get a response to a query on, say, a customer’s proclivity to churn. The way Big data is processed is different from traditional data processing. Techniques are available that allow us to fragment the data across multiple nodes for parallel processing, resulting in a much faster response. Let me explain this with a simple example that surprisingly predates Big data by over a decade, but beautifully captures the essence of how we process Big data today.
In 1999, the University of California at Berkeley conceived of a project that was nicknamed SETI@home.5 SETI stands for Search for Extraterrestrial Intelligence and is an initiative focused on scanning the cosmos for signs of intelligent life. To search for intelligent signals in the vastness of deep space required several giant telescopes that could scan the skies, detect even very weak radio emissions with remarkable sensitivity, and send them to a centralized computer, which could record all of them and analyze them. Hopefully, somewhere amid all the radio noise, there was a signal sent by intelligent beings light years away! Unfortunately, finding this needle of a signal in the enormous haystack of data required almost unlimited processing time (and power) even on the largest and fastest computers in existence. The folks at the UCB stuck upon a rather bold but brilliant idea to solve this problem: Why not turn to a massively underutilized computing resource: the millions of personal computers (like your laptop) sitting on desks the world over, spending much of their time running mindless screensavers. Anyone with a PC could enlist as a participant in SETI@home, and the process was completely unobtrusive. This combined computing power was harnessed to process the mountain of SETI data, thus solving much of SETI’s computing problem at a stroke. That is, they embarked upon the idea of fragmenting the vast received data and assigning it to multiple nodes (the vast number of PCs the world over), processing it in parallel, and finally feeding the processed data back to the centralized computer over the Internet. Brilliant indeed!
This is also how Big data is processed. That is, the largest blocks of data are fragmented into smaller chunks, processed in parallel across multiple nodes (as PCs in the SETI example), and collated. This cuts down the total processing time from weeks to hours! I have run Big data projects and seen this for myself. At first, it almost seems like a miracle.
A fundamental limitation of Big data is its inability to lend itself to relational databases and desktop statistics. Given its size, structure, and speed, generation of meaningful information from Big data requires advanced analytics techniques. Therefore, it is not Big data alone, but its intersection with Advanced Analytics that can give a fresh insight into a completely new worldview. When you cross this intersection, you enter the world of Big data analytics.
Analytics is the process of deriving information from data. This information can be presented in the form of dashboards, tables, or text depending on the requirements of the end-user. This, in turn, can lead to useful insights that support business decision making. The world of Big data analytics is, however, quite different from our known and familiar world of desktop analytics (Figure 3.5). Traditional algorithms for processing information require the information to be in main memory, accessed through a single central processing unit (CPU). In Big data analytics, the sheer size and diversity of data do not allow it all to be in memory at the same time in a single system, and hence it calls for distributed processing across a host of systems. The entire process of extracting value from data is a specialized discipline, which has given rise to a new branch of study called data science and whose proponents are called, as you guessed, data scientists, a much-coveted discipline today.
Figure 3.5 Big data analytics
Big data is fast becoming a primary lever for gaining a competitive edge in a world that is increasingly dominated by data. It has become very relevant for marketing campaigns to leverage insights uncovered by Big data, which can then effectively personalize communication to individual customers of the brand. In addition to analyzing all the transactional data generated by businesses, it is important for companies to assimilate all the relevant information shared on social media sites, to provide solutions that are tailored to fit individual needs.
If brands want to reach a specific audience, they need to carefully analyze the adoption, usage, payment, and service satisfaction trends of consumers of the brand. This trend and behavior analysis of various customer segments is one of the leading pull factors for the enterprise adoption of Big data analytics as the gateway to smarter marketing campaigns and better management of customer experience.
For successful adoption of Big data, cooperation between leadership teams across Business and IT is crucial. The focus of CIOs today is on identifying opportunities to streamline business processes. The CIO must recognize the importance of managing customer expectations at each stage of the lifecycle, which, in turn, must spur the deployment of data management tools and processes to garner deeper customer insights. Ensuring requisite skill-set in the organization to derive gains from Big data is another critical battle that CIOs need to win.
With the advent of Big data technology, data has become an undisputed business asset as it is now possible to dive wide and deep into the ocean of data and generate useful business insights. Coupled with this is the fact that Big data is emerging concurrently with a host of complementary trends such as cloud computing, social media, enterprise mobility, and in-memory computing. We may see a very new kind of convergence which brings these trends together, to create THE enterprise architecture of the future. When this happens, the need for perfect alignment between Business and IT will be further accentuated. Enterprises on a strong BITA track today would thus be at a distinct competitive advantage.
Enterprise Mobility
Somewhat contrary to popular thinking, mobility is not about movement. It is about freedom. Freedom has a direct impact on an individual’s agility, which makes mobility both liberating and transformational. It is no surprise, therefore, that mobility is making rapid advances into every arena of human endeavor.
In the enterprise context as well, mobility means freedom from devices, platforms, networks, and of course, geography. Simply put, it means that access to what I hold important (e.g., a Document) is not restricted by the device I am holding in my hand, or by the network I am connected to (e.g., office LAN or public Wi-Fi or cellular network ) and certainly not by which part of the globe I happen to be in!
A lot of times, people equate mobility to Bring Your Own Device (BYOD). BYOD enables you to have seamless access to office and personal data without having to switch devices. True, this is mobility but only one of its many use cases. While some organizations disallow BYOD as their security concerns override the anticipated benefits, many are still taking a cautious approach to it, and typically allow e-mail and some employee apps (like leave, travel) only. There are, however, several smarter organizations that have built robust authentication and access control systems to embrace mobility in a much bigger way and reaped considerable benefits in productivity and employee morale.
The proliferation of mobile devices like smartphones and tablets has been a catalyst for mobility. Availability of abundant bandwidth has been another boost. However, the biggest driver for mobility has been the hunger for information anywhere and anytime. With the underlying device and network infrastructure in place, it was only a matter of time before smart business applications arrived on the scene to leverage mobility for business benefit.
Example 3.2
A communications company in India leveraged a vast countrywide network of distributors and dealers for providing cellular connections to the populace. Traditionally, the company’s territory sales manager (TSM) responsible for a patch routinely visited various distributors and dealers gathering information on sales, channel performance, forecasts, and so on, while assisting them in promotions. The data collected by the TSM was fed into a web-based application back in the main office as and when the TSM could visit, which was not very often given the requirement to be on the street, and the remoteness of some territories from the nearest office. The calculation of sales commissions across the hierarchy of distributors, dealers, sub-dealers (who could even be a grocery shop owner or the village milkman!) were frequently delayed for this reason. It was also not possible to track sales or achievements against sales targets on a regular basis. Management was unable to review territory-wise sales and plan timely interventions. They finally took to mobility as the solution. Each TSM was provided with a tablet that ran the mobile instance of the web-enabled application (earlier available in the office only) so that he could input data on the spot (or from the nearest network zone), and thus track and report sales by distributor, dealer, and sub-dealer. This application instantly presented the territory sales performance to the TSM. It enabled all data to be captured in near real-time and allowed channel commissions and sales information to be available on request. The back-end system could collate the performance of all TSMs in a zone and feed the results to the zonal sales manager, and so on up to the level of regional Chief Operating Officer (COO). The COO now had a report on the previous day’s sales in his mailbox at 9:00 a.m. each morning, which earlier used to be an end-of-month activity. This is a clear instance where a mobility solution not only boosted internal efficiency but also increased the scope for higher penetration into the market, and trade satisfaction (faster commissions). It also allowed the sales managers to do lightweight operations, like travel expense reporting, while on the move using the tablet, avoiding the need to check in at the office. Most importantly, it gave an insight into where he stood with respect to achievements against sales targets at any instant!
Mobility is perhaps the single biggest game changer in the enterprise world today. As we said, mobility is enabled by a dynamic device ecosystem, an abundance of bandwidth, and an array of applications seamlessly coming together to satisfy a growing hunger for information anytime and anywhere. It has changed behaviors across the organization and brought in a new culture—be it the average employee using BYOD, or the territory sales manager with his mobile enabled device and application, or even the company CEO, as the next example shows.
Example 3.3
The CEO of a well-known Indian software services company was on a visit to Japan, where he was to meet one of his most important clients. This meeting was to be with six members of the senior staff of the client company, including their MD. The importance of their time and the need to be up-to-date to make the best use of the 30 minutes allotted for the meeting was not lost on the visiting CEO. While he was on the 45-minute car ride from his earlier meeting to this one, he used a mobile enterprise app to get a complete dossier on his tablet PC, giving the profiles, with photographs, of each client delegate and who from this CEO’s organization met him/her last and when. Some data priming, of course, had already been done by the local office for their CEO’s visit! Next, a quick status of the key projects, billing information, major complaints, and resolution state as of that morning was populated through the app on his tablet. Thus, when the CEO arrived for the meeting, he knew everyone by face, name, function, preferences, and grievances. I imagine the meeting went quite well, as everyone, and not least the Japanese, appreciate a good preparation and astute management of time.
Mobile solutions (like in the examples above) offer better communications, faster and more accurate decision making, and better customer service, all of which lead to a competitive advantage for the business. For example, an employee at the client site may be able to access any required information on the company’s products and solutions from the cloud storage through his device (laptop, tablet, even smartphone) to show what his customer needs, as he is no longer confined to stuff that is on his laptop! He may also connect remote experts through online chat or video to resolve customer complaints while on the site.
Figure 3.6 Enterprise mobility
Enterprise mobility (Figure 3.6) is an intelligent offshoot of the existing mobility ecosystem. You can offer rudimentary (i.e., with limited ability to manage and control what you are rendering) services leveraging the existing wireless network infrastructure, a server somewhere that hosts data, a few mobile applications, and all the available smart handheld devices with the employees. To give it a tinge of robustness, however, you need mobile security management and authentication system for preventing misuse and unauthorized access. To offer these enhanced services to the user base, a Mobile Device Manager (MDM) is required. The MDM is a client–server system, which enables end-users to benefit from plug-and-play data services. The MDM server is a centralized component, hosted by the service provider, which sends out various management commands to the mobile device. The MDM client here is a piece of software running on the end-device itself. How many times have you had to call the service provider’s desk to configure a new device you have acquired? All that the service rep does is to send you a link and ask you to activate it from your device. This essentially installs (downloads) the client on your device, and the MDM takes over from there, insulating you from complex configuration procedures. Some versions of MDM server also take care of accounting and authentication of the user.
One of the biggest benefits of mobility is the level of engagement it enables with the customer. The availability of information wherever and whenever you want does give you an edge that is hard to beat. Ability to provide better customer service remains a primary driver for adoption of mobility by enterprises.
The enterprise world today seeks increased sales and better customer service, lower expenses, improved productivity, and happier employees. It so happens that mobility provides all of these benefits and more. The earlier you adopt enterprise mobility, the faster you can achieve these benefits. Of course, this adoption is strongly contingent upon close step-locking between Business and IT, and therefore, organizations with strong BITA have a much higher chance of benefitting from mobility.
Social Media
Most of us today are part of some social media network. Social media (SM) has crossed all boundaries of age, race, status, income, and nationality. It has made the world a smaller, better informed, and more connected place. SM, being a vital element of the redefined enterprise ecosystem, is another constituent that depends on a strong BITA to leverage its potential as a driver of business growth.
SM collectively refers to tools, channels, and applications that allow the creation, sharing, and exchange of content—like messages, information, pictures/video, and files—between people over the Internet. More pertinently, SM is a collective term for media that promote online collaboration among communities. Social media is a result of preexisting technology building blocks, like IP-centric networks, webservers, cloud, devices, and applications coming together to fulfill an inherent human need to mix and mingle.
Social media is just about everywhere. Websites and applications dedicated to a wide range of collaborative activities are among the many types of social media that surround us. While all these cannot be listed here, the table in Figure 3.7 depicts some of the more prevalent ones.
Figure 3.7 A sample of the social media universe
Again, this is not the entire social media universe, neither in terms of types of SM nor applications and websites against each type. Further, let’s not forget that it is an expanding universe.
Example 3.4
As CIO, one of my aspirations was to connect, at least every quarter, with the IT users (read all employees, partners) across the organization, dispersed across 70+ offices in the country. For most people, IT, like oxygen, is noticed only by its absence—you feel choked when it is not there but take it for granted while it is! I felt that there was a strong need for open, interactive sessions with all users to deliver an update on new developments in technology, listen to and address user grievances, get a firsthand feel of how things were shaping up on the market front, and take suggestions on how IT could better support the business in the field. The problem was how to simultaneously and interactively cover all employees without going into the elaborate arrangement of video cameras, High-definition (HD) TVs, microphones, speakers, tons of bandwidth, assembly halls, and so on. I also did not want employees to take time away from their work for these sessions. As a solution, the CIO-Online virtual chat room was created—a product of social media. The CIO-Online session projected my audio and visual on all participating employees’ laptops, who could see and hear me, as well as type in their questions and viewpoints for me in the message box. Users could also speak their views with permission (token), in which case their audio and visual could pop-up on everyone’s screen. The token avoided multiple people speaking at once. After the question, I would retrieve control and provide my response for everyone’s benefit. We used a popular version of an enterprise messaging platform, a client of which was embedded in every laptop provided by the company. Thus, we could have a secure interactive session, give the users—particularly the remote ones—direct contact with management, achieve two-way learning, and ensure that any pending grievances were addressed. All this at virtually no cost, achieved without anyone having to leave their workstations! The sessions were immensely popular and went a long way in boosting collaboration between IT and users.
Since SM allows instant communication with many constituents, it is an excellent tool for campaigns and promotions by companies. Many enterprises are talking to their customers on Facebook, Twitter, and other social platforms, both on a collective and individual level. However, a lot more creative instance of SM usage is the reverse communication channel. That is, consumers sharing information on the product or service with the vendor, or among themselves. By using special programs like web crawlers, companies can get crucial data, which offers insights into the sentiments expressed by customers on social media, analyze these, and use the results to make timely course corrections. In fact, sentiments analytics is emerging as a field on its own, given its relevance to companies and consumers alike. It was once said that the voice of one disgruntled customer could reach 10 others. Social media just made it a million others! It is not hard to imagine the profound impact of this on companies’ reputations and revenues.
Given the rising impact of social media on business, many enterprises have implemented distinct social media strategies. A few examples: DELL used SM as a channel for generating sales, perhaps one of the first examples of leveraging the power of social media. Comcast used SM to reach out to customers in need of support. Starbucks used social media to give a voice to their customers to propagate new product ideas. All these (and other) examples ride on the unprecedented reach enabled by SM and the opportunity provided by SM for businesses to interactively embrace their customers at last.
Using SM as part of business strategy makes sound sense given the payback. The two-way engagement path enables you to measure the reach, influence, traffic, and transactions relating to your market audience. This, in turn, allows you to analyze the results for timely insights into preferences, sentiments, views, and ideas relating to your offerings. SM underlines the need for strong integration between Business and IT to derive these insights and use them for enhancing sales and customer experience.
Customer Experience Management
Like social media, customer experience management (CEM) is not a technological evolution by itself. It is a system that uses some of the building blocks of modern technology to fulfill the primary business need to engage, and stay engaged, with customers.
The core premise of CEM is that customers do not buy technology. They buy experiences. Thus, CEM is focused on the management of the complete lifecycle of the customer. The customer’s view about a provider is influenced by various touchpoints that the customer comes across—from the pre-purchasing stage to post-sales support—and CEM views each of these touch points as an opportunity to improve the customer’s experience and build loyalty and advocacy—the ultimate goals of CEM.
The pictorial representation shown in Figure 3.8 is a construction of the CEM workflow across all touch points.
Figure 3.8 Customer experience management
Example 3.5
One of the problems every telecom operator faces is customer churn, especially with the advent of mobile number portability (MNP). An operator typically gets both churning-in (which is good) and churning-out (which is bad) customers in a given month, and the strategy is obviously to increase the in-churners and minimize, if not eliminate, the out-churners. Before CEM, it was not possible to get accurate insights into the reasons for churn. One of the telecom operators in India was particularly perplexed about the churn situation. This company had launched a very compelling customer loyalty and retention program, driven down its call rates to one of the lowest in the market, and improved its customer service levels. But despite all this, it found the churn-out rate still increasing month on month. Curiously, it scored among the highest on the customer satisfaction scores! Then why should customers churn out? The company (let’s call it X) adopted CEM to gain deeper insights into customer behavior to solve this mystery. What it discovered was quite insightful. India has a predominantly (95 percent) prepaid mobile subscriber base. A few years ago, the trend had picked up for many folks to keep two phones instead of one, or two SIMs in one phone. Due to lower on-net (i.e., within the same operator’s network) calling rates, customers preferred their subscriptions (including family members’) to be from the same operator. A substantial part of X’s customers was in this segment. Of late, the price differential of on-net calling rates had diminished to the point of irrelevance, while the need for uninterrupted data connectivity was becoming paramount. Due to this, customers did not see any benefit of two subscriptions from the same operator. It was more compelling for customers to move one SIM to a different operator to safeguard against service interruptions. This led to the higher churn for X. It was indeed an elusive root cause, something that was only stumbled upon through deep probing enabled by CEM. As of writing this story, X is still working on an effective strategy to counter the situation. But knowing the root cause is half the battle won!
In a nutshell, the figure highlights how CEM makes use of IT tools and infrastructure to convert customer data into meaningful insights that can be leveraged to create an effective customer strategy, which is then embedded into the various touch points across the lifecycle. The process is cyclic, enabling continuous improvement, which is quite useful, as customer expectations are always progressive and keep going up a few notches with every positive experience!
There are many examples that demonstrate the relevance of CEM in aligning more closely to customer expectations at different stages of the life cycle, from across industries. A leading bank in India had many customers complaining that the initial passcode provided by the bank with new debit cards was declared invalid by ATMs. It emerged that the validity of the passcode was five days from dispatch, and on average, three were consumed in the parcel delivery. For many customers, who visited the ATM two or more days later, the code was void even before they started! Such insights are far more easily possible with CEM than through traditional means.
For driving customer loyalty, operational efficiency, and new revenue streams in an environment characterized by evolving technology, changing expectations, and hypercompetition, customer experience management plays a pivotal role. Customers are justifiably demanding more of their service providers today and managing customer experience as a discipline goes a long way in improving every interaction through the lifecycle. Most customer-focused organizations achieve this through the deployment of tools and processes to garner deeper customer insights. But more importantly, this environment requires a responsive customer service organization and a dynamic information technology ecosystem working seamlessly together to implement the CEM strategy.
CEM is focused on understanding customers’ preferences and expectations based on their behavior through the lifecycle and using these to calibrate the customer service strategy. Its focus extends much beyond problem resolution or incident management.
Big data is expected to play an increasingly important role in the institutionalization of CEM. Big data enables us to reach the bottom of the pyramid and target the right group of customers for, say, a new campaign or service. Today the focus of every service organization is on customer loyalty and retention. And retaining a customer requires you to be able to differentiate your offering from the rest. Which, in turn, means providing an individualized and special experience to each customer tailored to his or her preferences. A strong alignment between Business and IT is thus at the core of CEM and organizations with a stronger BITA have a clear edge in attaining a loyal customer base, indisputably the biggest asset for any business.
In this chapter, we have introduced some of the new technological developments that are already well-entrenched in modern business and are expected to play an increasingly dominant role in the business of the future. These are the building blocks using which the technology-driven business edifices of the future will be constructed. As this happens, technology will play an enhanced role in driving business success, creating an environment in which technology and business will be inseparable from each other. Figure 3.9 depicts the gradual convergence of Business and Technology over the ages until they fuse in the digital age.
Figure 3.9 Convergence of business and technology
There are, of course, many other trends emerging, or have already emerged, which we have not touched upon here. These include the Internet of Things, Artificial Intelligence, Machine Learning, Merged Reality, and Blockchain on one level, and advanced encryption and data privacy, packaged applications, mass outreach programs (like education, health, governance, location-based services, etc.) on another, all driven by the intersection of existing technologies with each other and with business.
The sun will soon set on some of the established systems, especially the proprietary or bespoke ones. Stand-alone (not interoperable or networkable) and special-purpose devices among others do not appear to have a bright future. Hardware will be increasingly commoditized with software bringing in the needed differentiation. Consumption devices like smartphones, tablets, book readers will be distinct from and more prolific than creation devices like laptops, stand-alone cameras, and 3-Dimensional (3-D) printers.
Telecom companies, being key players in the ICT game, will no longer be content with being providers of dumb pipes (a euphemism for communication channel). They will migrate from being connectivity providers to service providers. Thus, there will be an increased collaboration with the so-called over-the-top invaders to create a more seamless ecosystem and smarter telecom networks. The performance of optical communication networks will continue to grow by a factor of 8 to 10 times every three years, making bandwidth more abundant. On the wireless side, new generations of technology—both cellular and Wi-Fi—will continue to evolve. While they may not catch up with optical networks in the bandwidth department, they will more than makeup for this by enabling even more seamless mobility.
On the IT software side, we can expect a higher prevalence of object-oriented technology (like Java), which enables the development of self-contained units of software that can be shared. Nonstandard software interfaces, architectures, and applications will be set aside, as standardization will become the norm since it ensures portability.
On the infrastructure segment, alongside increasing dominance of cloud computing, particularly SaaS and IaaS, we should witness the phasing out of dedicated machines and the new architectures will be increasingly based on virtual machines, which are emulations of (real) servers for hosting applications dynamically. This virtualization will lead to far more efficient utilization of IT resources.
With the sun rising on a host of new technologies while setting on others, it is clear that the future is going to be more different from the present than the present is from the past. The boundaries of technological growth will be drawn only by human imagination.
IT has come a long way from centralized mainframes, batch-processing minicomputers, and Y2K. So has Business. Established systems have been demolished to pave the way for a new order. Figure 3.9 depicts the journey of Business and IT through the ages to a final state of full convergence, heralding the dawn of the digital age. Here, your speed determines your survival. If trends are anything to go by, the advent of each transformative technology will emphasize the need for stronger BITA. The core principles of BITA, which we discussed in Chapter 2, will, however, continue to hold in the altered Business–IT landscape. Companies and individuals who are strong on BITA through its early infusion in their belief systems will have far higher growth—and survival—prospects in the digital economy, which is what we shall discuss next.