Add More Value To Your Customers!

Date:   Thursday , August 04, 2011

Coanrad Hilton at one of the meeting was once asked, what was the most important lesson you've learned in your long and distinguished career? His immediate answer was “to tuck the shower curtain inside the bathtub”. It doesn’t matter, what or where the lesson is, but the value-add it brings to the table, is more important today!

In my last two decades of IT services experience, many times, while working with customers, vendors often quote this “we will meet or exceed the expectations”, least they know that it is not just the expectations, its right expectations that need to be delivered. If I have to quote an example in layman’s words, if the current situation is being a warm soda, so as a provider you work to make it cold and exceed the expectations. So what if the market does not require a soda but need a flavored soda instead? Even though, the customer’s expectations have met, it’s no use to him! A strategy needs to be born, born to explore the boundaries beyond the needs, but to make use of change to make use of it, not just meet it!

In the world that we work today, business results are still controlled by the three reactors, Technology, Processes and People. How do we catalyze the change, enable innovation and establish a world without boundaries that provides high quality inputs to the decisions the CxO make. In the last twenty odd years, there has been more than 1000 percent growth in Information Technology (IT), from banks to retail chains, telecoms to aerospace, the rise and fall of dot-coms or how the financial markets played musical chair since Sep ’08. We have seen a 150-year-old company failing, a company with market value of more than billions, being sold over for less than 1/100 of the price.

Again, not moving away from the topic, value-add, and strategy to offer becomes even more important working around costly staffing, storage sprawl, isolated tools and environments or disconnected messaging systems that become extremely inflexible and more challenging to end-customers today. The answer we look for is the sweet spot amongst the customer needs, the organization capability and what a provider that can offer the value-add. If we go by the books, it’s straightforward - reduce or eliminate cost / raise or create value. If it were that simple, we wouldn’t need half the masterminds today.

So how do we create value-add through strategic outsourcing/partnering? Strategic sourcing is not just about outsourcing business or IT services. A main task when designing a sourcing strategy is to monitor the needs of each business unit and clearly identify the enterprise's strategic goals with yours. The Governance model as per Gartner - it is the sum of management capabilities, methods and processes, organizational roles and responsibilities, and rules and agreements that support the dynamic delivery of services in a mixed (internal and external) environment. I truly believe that Governance is a key aspect of the sourcing strategy and needs to be continuously reviewed and reinforced during the on-going sourcing life cycle. A sound governance model should also allow the offshore service provider to deal with short time frames, manage resources according to any changes in the project planning, and ensure that the necessary skills and technical capabilities are made available to the service recipient during the life of the relationship.

Ultimately, customer satisfaction is only the run-of-the-mill entry point. It is the degree to which customers perceive their rational needs are being met and the relative value to them of what is delivered. Increase customers response rates time to customer and Service levels and the two most important bonds in the retention of customers in the IT services Industry. By creating historical statistics by analyst, including graphing of raw data and customer comments and feedback, it becomes important to benchmark the performance of your work against established goals. These measures will not only result in analyzing the various satisfaction positions from time to time, but also help you to understand the need of customer as you grow along with them. As a provider, your value propositions must meet the customer need to understand the external effects over a period of time, while making the internal changes at customer end and hence become more agile.

As per report from Forrester, in a non-outsourced environment managements operational time spend is about 75 percent, and when this is partnered/outsourced it moves to about 30 percent, this also means that the customer is willing to part their day-to-day IT work to its partner and expect trust and loyalty in return. As companies become increasingly commoditized keeping and expanding vendor-customer relationships depends on their ability to create loyalty programs by delivering a customer experience tailored to changing customer needs. Today there are relationship manager role that had come forward over period of time to act liaison between the customer and the delivery teams. It has become one of the keys to success in acquiring and retention of customers’ trust and loyalty. The role created is not to cater to the needs of the customer post sale, but even before the beginning of the pitch in the sale cycle. There are Tier-1 IT companies who claim to be “customer-centric” and I truly believe in what they say, but over a period of time, the “customer and centric” drift apart. Talking to various CxO in the past, most of them had similar feedback or so; the simple reason being Know Your Customer (KYC) is no longer in play. There could be many reasons for the same, but personally I feel that customers are growing in a more diverse and specialized manner with the needs of the market changes and requirements, and they expect providers to understand their changing needs and interests and cater to those needs.

In the past, corporate floors had questions like, “how do we keep customers from going away from us?” which has now become, “how do we want them to want us more”? The fact is that all customers are not equal in society, which means they are differences in businesses, size, goals etc. and hence being customer centric becomes even more challenging in nature. This does not mean that every provider needs to build loyalty and improve retention by doing everything for everyone all the time. It just means that, providers must understand the customer experiences, cater to specific business goals and interests and value their on-going interest in providers.

To survive and even thrive is one thing, but growing from here is another. Today, CIO/CFO are the agents of business, taking growth from one to another level, from want of technology to spend on it, comes hand-in-hand. The conditions today that will drive increased business and IT collaboration will depend on the business that will drive the technology in the organization. But in the end what still matters is at what value.

The author is the Managing Director of iPrimitus Consultancy Services