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Feature Article
January 2003

Tony Rybczynski photoMaking Business Realities Work For You


Time was, the business world operated like a Monopoly game. Stay on a predictable path that marches around the board, deal with the cards as they fall, grow as big as possible. Do this, and you�re virtually assured of accumulating wealth. Those old rules have changed. Today�s business game is more like �Survivor,� where success rests on the ability to forge close alliances and constantly adapt to new challenges. This isn�t a game where a business can have much success with a prescribed path or a vain prayer for constancy.

The technology advances of the last decade -- particularly the Internet -- have fundamentally reshaped business environments in ways that are simultaneously advantageous and detrimental. In a business climate that is more punishing than ever to the inefficient and the slow moving, businesses are under pressure to manage their information assets more effectively, efficiently, and wisely. The information management framework is no longer an adjunct support structure; it is the essential foundation for corporate performance. How information is obtained, validated, stored, accessed, distributed... these issues are central to organizational survival and profitability. The instantaneous, global communication that fosters new opportunity has also accelerated all the pressures and demands of doing business. Sure, businesses have more tools and infrastructure than ever to create innovation, service, and profitability... but so does the competition.

New business realities bring profound implications for network and information management strategies:

  • The alternative to evolution is extinction.
  • True value is in relationships; not transactions.
  • The map of business geography is more virtual than real.
  • There�s a dark side to the Internet.
  • If you keep doing the same thing, you�ll keep getting the same results.
  • The rules of the game have changed.
  • You have to do more with less.
These require IT executives to reassess ways of managing and using their information infrastructure, and to continually strive for more competitive and proactive information management models.

This article is the first in a seven-part, monthly series, which will look at each of these realities in turn and the technology responses available to IT.

Business Reality: The Alternative To Evolution Is Extinction

�As organizations become more connected with their environment, they become more like living organisms and are governed by the same rules of adaptation and evolution,� wrote Mankin and Srivastava of the Cap Gemini Ernst & Young Center for Business Innovation. �No organization can ignore the reality of permanent economic volatility or the success of nature to overcome constant change.�

By design or by default, corporate information management has already been through massive evolutionary change in the last 50 years. Those that didn�t evolve became extinct. A few decades have witnessed the evolution from manual business machines with carbon forms in the 1950s... to electric business machines and photocopiers in the �60s... to monolithic mainframes in the �70s... then personal computers, fax, and dial-up modems in the �80s... to high-speed global networking in the �90s.

The next critical evolution will reshape how businesses use high-speed global networking. Will they use it to accelerate old ways of doing business? Or will they use it to embrace a new, more efficient, and profitable paradigm? Enterprises can be generally classified into four categories based on their level of operational maturity, reflected in strategies, information management practices and systems, and in the customer experience they deliver.

The Siloed enterprise defines business strategy primarily around cost containment and focuses on unit- and product-level metrics.

The Linked enterprise defines business strategy largely around customer service and focuses on customer satisfaction metrics.

The Integrated enterprise defines business strategy around personalization of products and services and focuses on profit and revenue by customer metrics.

The Engaged enterprise anticipates customer needs and delivers critical and time-sensitive information to customers precisely when, where, and how they want to receive it. Success is measured by indicators of enduring success, namely return on engagement (RoE).

ROE is a measure of a business�s ability to turn customer data into business strategies and customer relationships into equity. ROE can be maximized by:

  • Anticipating the service a customer requires and seamlessly delivering the service, sometimes before the customer even knows there is a need;
  • Initiating more intelligent, timely, and context sensitive services;
  • Providing a consistent and adaptive interface across all touch points, from marketing to sales, fulfillment, installation, and service.
The Engaged enterprise is a business whose customer service strategy is beyond just providing service and is focused on developing relationships with its customers. Providing the level of service necessary to maintain this special relationship is not normally practical or cost-effective for all of the enterprise�s customers. The challenge for the Engaged enterprise is to identify those customers who represent the biggest opportunity for the enterprise; those who will always be transactional; and those high-maintenance customers who do not represent a profitable relationship. The focus is on delivering service capabilities that create a unique bond between a subset of customers and the enterprise, while serving all customers in the most appropriate way.

Technology Response: Evolution To Engaged Application Architecture

What is it that makes an Engaged service different from what we have today and what�s needed to make it happen?


Well first, an engaged service is anticipatory. Based on information on the customer, it anticipates the information, service, or product the customer needs. The norm for service today is to wait for the customer to walk in, call, write, or click before providing customer service. Proactive services offered today take the form of telemarketing provided by an outbound call center, which are often viewed as unwanted, intrusive, and irritating. But Engaged service is not intrusive, because it is permission-based with the customer in control.

The task of identifying anticipatory triggers is the task of data mining of the large amount of customer and demographic information held by an enterprise. The role of the CRM system is to capture all customer interaction information in a single logical database, acquired across all customer-facing activities including marketing, sales, service, and support, whether in the field, face to face, via contact centers, or self-serve applications. The CRM system has the capability to link activities to outcomes across all interactions, and gives a total cost-benefit analysis for the customer relationship. It applies consistent rules based on this analysis to every person and every system that interfaces with the customer. It also measures the performance of people and systems in terms of relationship outcomes, rather than in terms of activities -- for example rating people on their success rate in completing up-sells, rather than on the time spent with the customer.

Time Criticality

The second differentiator is that Engaged service is time-critical. Today the main concern with time is usually �wait-time� -- don�t keep customers waiting on the line too long when they call. But time is of essence. It�s important that information is provided just-in-time or it may be of little use. The key technology in dealing with time-critical environments is the contact center, which has as its central role the customer-facing �front-end� to the enterprise�s CRM and data mining system. It brings together agent and self-serve applications, supporting notification, transactions, interaction and collaboration. The contact center interfaces into the CRM environment over a highly reliable, application-optimized network infrastructure, which itself is part of a highly integrated IT application environment.

Media Adaptiveness

The third differentiator is that Engaged service is media-adaptive. It adapts to the media and device the customer happens to be using. The problem today is that services are media-specific. For example, notification services send the customer a media-specific message, so there�s no guarantee the customer will get the message. Alternatively, many notification services are additive, resulting in three or more messages (cell phone, voice mail, e-mail) for the same information, instead of one message that is guaranteed to be delivered to the customer. But Engaged applications go out and find the user device being used and formats the message for that device. If the customer is on a PDA, a text message is sent. If the user switches to a cell-phone, a voice message is sent. And if logged on to a PC, then a text message with added graphics and URLs is sent. With Engaged applications, the customer receives consistent, fast, effective, 24-hour information -- whether via telephone, e-mail, fax, instant messaging, cell phones, personal digital assistants, or the Web.

An example may be the best way of illustrating the time-criticality and media-adaptiveness of Engaged applications. Imagine you are an airline�s premier customer. After hours getting through airport procedures, you get on the airplane, just in time to hear the announcement that the flight has been canceled. Normally, you would have to gather your belongings, get off the plane, and try to beat the rush back to the ticket counter, only to line up for rebooking on another flight.

But if this was an Engaged enterprise, when the Airline Reservation System is advised your flight is canceled, the system anticipates you will need to be re-booked quickly. Information on your current situation is sent to the front of the queue at the contact center, your file pops up on the agent�s screen and you are rebooked on the next flight. The reservation system sends your new itinerary to the Engaged application and the Media-Adaptive locator goes out and finds the device you�re using. It comes back and says you have a PDA, so the system formats the new itinerary for that device, and sends you the message. If you wish to speak with an agent you can press that option on your PDA and the Engaged Application will make all the connections: Your cell phone rings, you answer it, and you�re speaking to an agent.

In this example, the airline proactively turns a negative event into a positive service experience, rerouting you and eliminating a frustrating part of the overall travel experience: Waiting for service.

This Engaged Applications Architecture also enables the airline to better utilize its resources -- human and automated resources alike. For example, agents in the reservation area who aren�t busy can help out and reduce the load on the gate agents: resources in any location are available network-wide. Also, because the rebooking is started immediately, more passengers are sent on their way quicker and can fill flights that aren�t full. Ultimately, the architecture significantly increases business effectiveness, improving flexibility, manageability, and agility, and enabling a business to respond much more quickly to customers -- while gaining more effective use of resources.

Every business has the potential to engage their customers and propel customer service to superior levels. A finance company could detect a purchase that indicates suspicious activity on a customer�s platinum card, notify the card owner and take proactive action, before the card owner tries to make his next purchase. A healthcare organization can notify a wait-listed patient that they can be looked at, because a previous appointment has been cleared.

An increasingly commoditized world leads to extinction of all but the lowest cost provider. Where technology once removed the personal nature of the community-level, country-store experience, now technology is restoring it. Evolving to an engaged enterprise can make the difference -- for your business and for your customer.

Tony Rybczynski is director of strategic enterprise technologies for Nortel Networks with 30 years experience in networking. For more information, visit the company�s Web site at www.nortelnetworks.com.

[ Return To The January 2003 Table Of Contents ]

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