2. Welcome To The Age Of The Customer!
Eveline Oehrlich, Principal Analyst
February 28, 2013

3. In the Age of the Customer, IT must enable rapid change across the value chain.

4. How Is The Age Of The Customer Redefining Competition?
Agenda
How Is The Age Of The Customer Redefining Competition?
How Do IT Organization's Change in the Age Of The Customer?

5. Digitally-empowered customers redefine competition in the Age of the Customer
Source: June 6, 2011 “Competitive Strategy In The Age Of The Customer”

6. The Age of the Customer impacts all five of Michael Porter’s forces of competition
Source: June 6, 2011 “Competitive Strategy In The Age Of The Customer”

7. The customer is in charge
Bankruptcy
$11B
I was planning to start by telling a story of two companies…one that was obsessed with building and maintaining its vast network of stores, and one that was obsessed with customers and making it convenient to rent videos.
But on Sunday night, that all changed.
So to make my point, I’m going to ask for your help.
Please stand up if you or anyone in your household has ever had one of these and been a Blockbuster customer.
Please remain standing if at any time in the past you switched from Blockbuster to Netflix.
Please remain standing if the reason you switched was mostly for convenience.
Please remain standing if you are disappointed with Netflix announcement to break its service into two business – DVD and streaming.
Source: Blockbuster store closing X
$6.8B

8. Customers’ experiences drive success
Trane empowers distributors to upsell and close deals faster
An iPad app delivers content, sales materials, and documents
The “ring to ching” close rate is 20% faster, 31%+ in revenue
Analytics are built into the platform to monitor, refine, and reward
Bruce Tansy, BI guy at Trane
Cynergy did the app
Source: Trane

9. Services eclipse products
Source:
Voice-over about business outcomes — a couple of data points — is revenue material, customer sat, competitive position

10. Users provision their own business capabilities — devices, apps, XaaS, …
“How are the following technology sourcing functions currently shared between your company’s IT organization and your business group/department?”
Base: 1,004 North American business decision-makers in firms with employees
Source: Forrsights Business Decision-Makers Survey, Q4 2011

11. Change moves to systems of engagement (Forrester estimates)
Source: Forrester’s estimates of the mix of budgets
© 2012 Forrester Research, Inc. Reproduction Prohibited

12. The datacenter’s core skill becomes business — not technology
What are the 3-5 points to make — really accentuate — don’t spend too much time on this chart
What is the “force at work” — what is the issue — overhauling the staff in the data center
Simon — the picture and the title don’t match — can’t even control it anymore — tools, XaaP, — change the headline? Dump the words on top of the arrows — how wrestle this to the ground — become a coordinator of the work of others
use the dev-ops example — where are the investments going (more skills, agility, time- to-benefit, cut higher cost)
Simple chart — not 50-box org chart — shift in capabilities — from-to — amount and type of labor content
Change title to be datacenter
Source: January 18, 2012, “Avoid Tactical, Narrow Service Management And Automation Strategies”

13. Threats and opportunities in the Age of the Customer: It’s IT’s perfect storm
The customer is in charge
Customers’ experiences drive success
Services eclipse products
Users provision their own business capabilities
Change moves to systems of engagement
The datacenter’s core skill becomes business — not technology
. . .
The customer is in charge — empowered by technology and information — Winning firms orient around their customers’ journeys, responding nimbly, flexibly, globally, and smartly
Services eclipse products — following and enabling the customer’s journey
Users provision their own business capabilities — through devices, Web sites, X-as-a-service, . . .
Change moves to systems of engagement — to the edge of the technology stack so that core IT services become standard, automated, & consolidated
The datacenter’s core skill becomes business, not technology — low-level technology capabilities are sourced, not built

14. In the past IT saw serial waves of technology evolutions like mainframes, PCs and the Internet impacting their businesses leaving sufficient time for digestion and refinement

15. Industrialization
Cloud
Smart
Mobile
Social
BYOD
Big Data
Real-time
Agile
Consumerization
Technology evolutions are moving faster, clashing, overlapping and completing each other to create new challenges and opportunities.

16. The Latest Big Disruption (Complexity)
Consumerization
Cloud
Social Media
Manual Ability
Complexity
Virtualization
Theoretical
Real Complexity
Accelerant
2007
2008
2009
2010
2011
2012

17. The Business Hates Volatility

18. The Business Loves If IT Adds Value But …
Predictable
Cost effective
Productive
Few surprises
There are too many surprises in IT!

19. How Is The Age Of The Customer Redefining Competition?
Agenda
How Is The Age Of The Customer Redefining Competition?
How Do IT Organization's Change in the Age Of The Customer?

20. Old Service Management & The New Service Management

21. …focus on customer experience
Stop Pushing The ITIL Kool Aid…
…focus on customer experience

22. Top Performing Companies Set Different Priorities
Flexible
New IT
Smart
Social
Old school IT

23. Welcome to the Industrial Revolution
the next wave of ^
You can industrialize your IT – here’s how:
Put discipline into your processes
Engineer customer experience
Reduce the MOOSE or let others do the “grunt work”
Adapt the people (skills and org)

24. The New Faces Of IT Social IT Dynamic IT Smart IT
Dynamic IT … dynamically supports business needs with internal & external resources and provides seamless access and support to all resources for business users all the time and anywhere.
Social IT … connects business users with internal and external people and products to enable high performance, collaborative business processes.
Smart IT … leverages technology to support business value and provides timely and contextual support to all business users.

25. New Engagement Models Dynamic IT
Source: March 26, 2012, “Mobile Is The New Face Of Engagement”

26. IT (BT) is about systems of engagement — not systems of record
Base: 1,004 North American business decision-makers in firms with employees
Source: Forrsights Business Decision-Makers Survey, Q
Source: May “Forrsights: Business Execs Increase Direct IT Spend To Support Systems Of Engagement”

27. Need To Define “Services”!
Catering
Need To Define “Services”!

28. What Is A Service? Service Service Service Business BRM
Business service
Service
App
Service
I&O
App owner
Infra
Service

29. The service (product) is key to industrialization!
What’s The Service?
Whatever is important to the consumer
How do we define them (including SLAs)?
Pursue service portfolio management
A Service is constructed from sub-services
The service (product) is key to industrialization!

30. The solution: Firms like P&G drive business-service-value
Procter & Gamble is known for its leading consumer products and its marketing prowess — and they yield results: revenue grew 10% for their fourth, ending in June 2011, over Q
P&G is famous for brand management — for knowing its customers and how to bring product to market. In fact, many MBA programs go to school on P&G.
But P&G isn’t standing still — and [CLICK] Filippo Passerini — Group president of P&G’s Global Business Services organization and CIO — is relentlessly pursuing innovation, including collaborating with marketing to drive customer knowledge and responsiveness across the enterprise and the value chain.
One striking example of this is the Virtual Modeling And Simulation Service, part of the “Product Innovation Capabilities” service line.
The challenge for the Virtual Modeling and Simulation Service is to accelerate the speed of innovation-to-market — and key to this is knowing what the customer wants and responding to that knowledge.
Traditional customer testing through physical mockups used to take 6-7 weeks
[CLICK]
Passerini’s photo source: P&G
Filippo Passerini, Group President of
Global Business Services and CIO

31. Customer testing used to take 6-7 weeks — limited by cost and time
When a new product is coming to market, the traditional approach was to do physical mockups of products to test customer reaction to art work, packaging, merchandising, etc. But the 6-7 week cycle time was way to slow and costly.
The cost and time meant less complete testing and slower response to customers
Enter the Virtual Modeling And Simulation Service
[CLICK]
Source:

32. Virtual reality now allows more customers to review more options in days — not weeks
This team have changed all this, using virtual reality to provide marketing with end-to-end business capabilities that are integrated into P&G’s overall go-to-market processes.
When brand managers want to do testing, they request the services from the Virtual Modeling And Simulation Service team — resulting in a virtual testing environment within hours
The speed is a result of Virtual Modeling And Simulation Service team’s work across the product marketing organizations to build a library of virtual tools that enable rapid delivery
The testing isn’t limited to P&G’s direct marketing. Virtual Modeling And Simulation Service team also involves retail channel partners like Wal-Mart and Target — to assure that customer responsiveness reaches across channels and across the customer life cycle.
And to assure technology innovation is at the edge, Virtual Modeling And Simulation Serviceteam focuses on the business while technology partner Accenture delivers new capabilities.
80% of products going to market use the virtual testing — 100% of the tier 1 products.
And the virtual consumer testing is integrated across the enterprise and across the value chain
The result? [CLICK]
Higher product success rates due to broader testing
Faster time-to-decision
A greater number of alternatives reviewed
And a broader number of products tested
Source: P&G
Better insights and higher success rates when P&G engages more with the consumer.

33. Dynamic through automationIT
Dynamic through automation
Tools that perform functions otherwise done by humans
Task Execution
Individual tasks
Repetitive tasks are candidates
Process Flow
Connects tasks and decisions
Workload automation and RBA
Decision Trigger
Analytics (not just monitoring)
When and why to take action
© 2013 Forrester Research, Inc. Reproduction Prohibited

34. Turbo Charge Your Service Processes
Social IT

35. Some clients still don’t realize the importance of service support, field support, business enablement…
Image source:

36. Turbo Charge Your Service Support Processes
Social IT
Social
Web
Service Catalog
Service Desk
Mobile Device
Browse
Community Forum, Facebook, etc.
Chat with service agent
Resolve/
Request/Troubleshoot issue
Transfer
to service desk agent.
Browse enterprise service catalog.
Receive details via SMS
service desk agent.
Navigate support via smart device
Source: August 2011 “Turbocharge Customer Service Process With Social Technologies”

37. The Number Of Tablets x10 In 5 Years
Source: April 23, 2012, “Tablets Will Rule The Future Personal Computing Landscape”

38. Tablets Are Cannibalizing Pcs
Source: April 23, 2012, “Tablets Will Rule The Future Personal Computing Landscape”

39. IT Industrialization Is Changing The People
Smart IT
IT, as we’ve known it, is dead
Many skills are diminishing
New skills are emerging as highly desirable
New sourcing models — don’t do it all yourself
Organization structure will be in constant flux
IT Industrialization Is Changing The People

40. New Talent, Organizations, And Processes
Smart IT
New Talent, Organizations, And Processes
August 2011 “How To Become A BT Leader — And Leave IT Order-Taking Behind”

41. Hire, rewire, or redeploy to fill the needs
Hot New Roles Emerge
Business relationship manager
Automation architect
Service designer
Service manager
Service brokers
Vendor manager
Hire, rewire, or redeploy to fill the needs

42. Conclusion!

43. IT’s actions in the Age of the Customer
Focus from the customer in — on understanding and responding to customers – use automation when possible.
Concentrate on systems of engagement — minimizing changes to the systems of record.
Refine service management processes to meet your customers expectations and industrialize your value chain.

44. Eveline Oehrlich, Principal Analyst

45. Reference reports from Forrester
“Forrsights: Business Execs Increase Direct IT Spend To Support Systems Of Engagement” May
“Mobile Is The New Face Of Engagement: An Executive Summary” March 2012
“Empowered BT Redefines The Traditional IT Archetypes” February
“Avoid Tactical, Narrow Service Management And Automation Strategies” January 18, 2012
“Empowered Business Technology Defined” July 18,
“Competitive Strategy In The Age Of The Customer” June 6, 2011