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Ubiquity, Volume 2002 Issue August, August 1 - August 31, 2002 | BY Espen Andersen 

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Companies will need to make themselves components of their customers' lives rather than trying to make customers a component of their organizations. To do this, they need to stop kidding themselves when it comes to electronic integration.


Companies will need to make themselves components of their customers' lives rather than trying to make customers a component of their organizations. To do this, they need to stop kidding themselves when it comes to electronic integration.



"He's the kind of person who believes his own press releases."
-- Airline executive, referring to a colleague.

About three years ago, an IT manager in a Fortune 500 industrial firm told me this story:

I went to this conference, given by a large ERP vendor. They did this wonderful presentation of how companies could use their software: On a large stage, they had set up a series of demonstrations, each showing how the ERP system could automate and integrate the various activities. There was a sequence of scenes, from left to right: The first demonstration showed a salesperson, a woman in Spain who just got off the phone with a customer, having sold 500 mobile phones. She entered the sales terms into the ERP system. The next scene showed a logistics manager, who made decisions about stock levels and distribution based on data from the ERP system. Then came a marketing manager tracking sales and planning campaigns, and then a finance manager monitoring liquidity. Finally, a scene showing the board looking at business graphs generated from the ERP system.

The whole thing was very nicely done, with large screen projections so the audience could see what was done and with very convincing, detailed examples. I was very impressed. When I came back to my own company, I suggested to the IT management team that we should invite the ERP vendor in to give the presentation to the Executive Board, to help them understand what we were striving towards. The team looked at me, horrified, and said almost in unison: "We can't do that! Don't you realize top management think it is that way already!"
Somehow I don't think this company is unique. Of course, top management in a global corporation cannot be expected to know the nitty-gritty details of every episode of value creation or destruction in every corner of their corporate world. They will always need to rely on aggregated information from below, but while this may look streamlined and taut, the level of noise and inefficiencies in the system tends to get filtered out as it moves upward. This is particularly true in technology management: It is not uncommon to find top executives who think about technology not from how a large organization will need to do it, but from extrapolations from the executive's own creation of small spreadsheets on his or her portable computer. Installing 10,000 PCs is not the same as installing one PC 10,000 times, but many managers are unaware of this.

This would be just fine and dandy, if it weren't for the fact that the world is opening up and organizations are becoming more transparent, even without the assistance of regulators shutting the stable-door after Enron. CIOs frequently find themselves defending the corporation's technology -- not to the Board, but to outside observers. In a recent study of CIOs I was involved in with The Concours Group, we found that for most CIOs, external presentations took up a large and expanding part of their time. Managing global IT then becomes a tightrope walk between total belief in your own press releases and total disillusion because someone will screw up the technology no matter how much you micro-manage.

Furthermore, customers are getting in on the act. With the Internet and the tightly linked, managed-by-wire corporation, the discrepancy between top management's picture of the world and that of the employees' will more easily pass over to the customers -- and you get into situations where your customers know more about you than you do. To make matters worse, the employees may be powerless to do anything about it.

An example: A couple of years ago I was ordering a laptop computer from a well-known manufacturer (well-known precisely for its ability to let the customers configure online and rapidly receive their systems). The company I was working for had an account with the computer manufacturer. I figured out what I needed, typed in the details and the system told me that I would receive the laptop in two weeks. The two weeks came and went, no laptop, so I accessed the system's Web page again and found that the laptop was "in production". Another week went by, and I did what any self-important intellectual mercenary would do: Called the computer company's account manager. In carefully chosen words I conveyed the importance of my company, my exhalted status within it, and the necessity that they immediately throw their considerable distribution muscle behind my laptop order. The poor woman said she would look into things, typed away in the background, and informed me that the laptop was "in production". She was using the same Web page I was.

Now, in the old days, she could have done this differently. She could have calmed me down with soothing words about how she recognized my importance, hung up, and then legged it down to the shipping dock to see if she could snag a laptop from some other order (presumably to a customer less likely to call and shout) to send to me. As it is, ubiquity of technology and lack of time necessitates an immediate answer, and tight production schedules, outsourcing and external subassembly sourcing make fudging and reprioritization (time-honored business techniques, those) impossible. So you are stuck, as a customer service representative, in a situation where the customer knows as much as you do, if not more, and your main role is to be safety valve for customer apoplexy.

Simplicity to the rescue

How can organizations do something about this? Well, the short answer is always: Get better managers. Failing that, a culture of simulating the customer experience (as well as that of the employees) is useful.

First, start where it is simple. How many executives today are customers of their own companies? I don't mean the usual kind of internal customer, with free services or products available whenever they need them, provided by employees who know they are serving the boss. Executives should be anonymous customers, having to face the wait for customer service or the inconvenience of daytime delivery -- just like everybody else. (This being said, a friend of mine once did a consulting job for a large airline. During this stint, he had to visit several of the airline's locations, and despite flying first class, found that the service was awful. The food was cold, he was served after all the other passengers, and the stewardesses were reluctant to refill his glass. After a while, he understood why, and found a way to tell the disgruntled cabin crew that he was not a member of the company's management, despite being sent on an employee ticket. The service improved considerably.)

Secondly, I think corporations need to rethink the design of customer service representative jobs, making sure that the employees have more discretion than the system. Failing that, employees will just be an alternative interface for the stupid and the lazy -- anyone else will use the electronic interface with its lower transaction costs and less scope for interpersonal embarrassment. Some of the better mail-order companies do this. In one clothing company, the customer service representative has a certain degree of discretion -- a set dollar amount, rather high, up which they can do whatever it takes to please a customer, all at their own discretion. They can waive shipping charges, give a discount or even send something for free, using their judgement, based on the customer profile and their own interactions with the customers. This is what Shoshana Zuboff, in In the Age of the Smart Machine, called informating (as opposed to automating). She referred to industrial workers, but the point can be still be made for customer service representatives -- or even to the customers themselves -- and has to be taken into account when designing the customer experience.

Thirdly, organizations need to recognize that, information-wise, they are components of a system rather than the system for their customers. Most organizations try to over-control the customer interface, trying to configure the customer to their world rather than the other way around. For example: My telephone and mobile subscription is with a large telecommunications company, with whom I also have quite a bit of business dealings, meaning that I fall between two chairs: Not quite big enough to be a company, and bigger than the average home telephone user. For years, I have told the company that I would love to receive my detailed telephone bill as electronic mail rather than on paper, and that I would like it in Excel format (or something else that can be fed into a spreadsheet). If I had that, I could easily analyze my phone bill, determine what is business use, whether the children are calling too much, etc.

Every time I have suggested this, the company has found the idea really interesting and told me they will come back to me (and they have, with many weird ideas.) Now they have come up with a solution: A Web interface where I can go in and look at my phone bill -- but not download it. The interface is designed for the lowest common denominator customer, and totally useless as a tool. Why not make it simple and send me a file?

Of course, the world is not that simple

Occam's Razor, paraphrased by Einstein, says that everything should be made as simple as possible, but not simpler. I think companies would be well served by having simple systems for advanced customers rather than advanced systems based on a simple view of their customers -- and to think about their whole organization as an interface to their value offering rather than the electronic and "meatware" interfaces as two versions of the same thing. Technologies -- and organizations -- should have problem proportionality -- i.e., things that are easy to ask for should be easy to do. To do this, the organization needs to be configured like a component-based system, with less control, more local intelligence and faster communication paths. And the role of people needs to change, from process followers to instant designers of individual solutions for each customer.

Alternatively, you can maintain the integration illusion by having Mongolian hordes patch the holes in the system, and believe your own press releases. But not much longer.

As for the laptop, I received it six weeks later, delivered in a different country than I had ordered. The company has discontinued the order tracking Web page.

Espen Andersen (self@espen.com) is associate professor with the Department of Strategy at the Norwegian School of Management BI (www.bi.no), and a research affiliate and European research director with The Concours Group (www.concoursgroup.com), an international IT and management research and consulting organization. Based in Oslo, Norway, he has done research on topics such as mobile business, electronic commerce, knowledge management, digital business strategy and CIO-CEO interaction.

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