Delivering Convergence

 
 
By eweek  |  Posted 2003-12-01 Print this article Print
 
 
 
 
 
 
 


How does this get delivered?

Prahalad: Take General Motors OnStar navigation system. Heres a company that delivers an experience on demand, using technology convergence. Its all about delivering value based on customer context. Say Im a single parent living in Pikes Peak. In winter, wouldnt it be nice if, before I take the kids to school, somebody would call me and say there is going to be a blizzard, and tell me not to take a particular route? Or if I do, asks me to keep OnStar turned on and, if its okay with me, let OnStar tell me what to do and what not to do?

Now that might be a unique experience for me, but Venkat may have an entirely different need. Say hes driving from Ann Arbor to Chicago. He wants to stop and have dinner, and he prefers Italian food. OnStar can tell him the best way to get that. Furthermore, that is Venkats need for an experience at the moment, not mine. My need was for safety information. In other words, what were saying is that customer experiences are driven by events, and its all very contextual, and it is not uniform for all of us—but that with mobility and technology convergence, companies can help to deliver those different types of experiences to their customers on demand. In this case, customers and companies co-create that value by giving each other information about what customer value means at the moment.

Ramaswamy: Theres been a lot of talk about the commoditization of information technology. Now everyone has the same information technology. The differentiator now is not the product but the personalized experience. The value to the customer is in the personalized service—which is sensitive to real-time location and need. The value to the company is its delivering a unique value or service to people that customers cant get elsewhere and are willing to pay for.

What are the implications for IT?

Ramaswamy: Todays CRM is all about what the company wants. But in this new world, value is co-created by both the customer and the company, and part of the "how" of doing this is that a dialogue between customer and company needs to be captured, not just profile data.

Prahalad: There are phenomenal implications for IT in this, in how you create the experience and deliver it quickly. For most companies, their technical infrastructure will have to change from a system thats driven by transactions—I give the company money and it gives me something in exchange—to event-driven or experience-driven IT. They must deliver to customers a service or experience that customers want on-the-fly, specific to where the customer is at a given moment. When companies build these new infrastructures, they will need to develop the level of granularity and the level of assimilation that customers want in their engagement with the company at any given time. These event-sensitive IT infrastructures that we need to build wont be only about business analytics—measuring what just happened. These will need to be built differently, around dynamic events.

Experience cannot happen without events. I must be here or I must talk to you or I must eat breakfast. With no event, there is no experience. What this means is companies will be able to leverage specific events in customers lives within the context of where it happens, which is as important as when it happens—and that will determine what companies can offer in terms of value. My getting a heart problem at 9 oclock in the morning has a different meaning than if I got it at 2 oclock at night. And then where I have my heart problem also matters. If I get it in Ann Arbor, where I know all the doctors, its very different from getting it in New York City or in, say, Costa Rica.

And theres also the question of how engaged I am at the moment, how urgently I think I need something from the company. Now obviously, if Im having a heart attack, Im totally engaged with the hospital thats providing me a service. If Im suffering from tennis elbow, I may not be so totally engaged with that hospital; in fact, I might not reach out to it at all.

The challenge is, how do you get line managers focused on the customer in this new and more dynamic context? They must experience the business like the customer does, in real time. That will mean, at its very basic IT level, real-time alert systems. Traditional archival information, which has been an IT problem for a long time, wont help me now. If a customer is having a problem today but you as a manager wont know that for another week, its not going to help anyone. So how do you build IT systems that are capable of continuous resource reconfiguration, rapid application development and real-time device alerts? That will be the challenge facing CIOs and IT leadership teams in the coming decade.

Next Page: Should companies scrap CRM?


 
 
 
 
 
 
 
 
 
 
 

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