The Customer-Adaptive Imperative - 4it Recruitment...innovation strategy Determine where and how to innovate. Select markets in which to compete/engage. Cast ideation net wide: crowdsourcing,

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© Copyright Ovum 2014. All rights reserved.

The Customer-Adaptive Imperative

BCS Elite Customer Engagement Nottingham 27th November

Jeremy Cox Principal Analyst Ovum

2 © Copyright Ovum 2014. All rights reserved.

Agenda

Common challenges

What’s the answer?

Critical question you must answer

Customer-adaptive enterprise - a coherent approach

Twin engines of growth

Maturity levels

Recommendations

Q&A


Agenda

Common challenges





Maturity levels

Recommendations

Q&A


Accelerating change driving the need for transformation

Legacy systems Disruptive competitors

Ascendant customer


A challenge many of our clients are trying to tackle

Growth

Customer focused

Compliant & secure

At less cost

New products & services

Better processes

Risk management

Better information

Supplier relationships

Sustainability


The need for continuous adaptation is unavoidable

• 87% companies from1955

Fortune 500 list have gone

bankrupt. Source: S.Denning Forbes Magazine

• Life expectancy of a firm

since then reduced from 75

to 15 years Source: S.Denning Forbes Magazine

• CEO tenure has dropped to

6.6 years from 8.1 years in

2003 Source: Booz & Co


The ability to adapt at the right speed, driven by change

in the customer domain, is essential for survival

• ‘’If change is happening on the outside faster than on the inside the end is in sight’’

Jack Welch former CEO of GE

• ''It's not about running the same business model. It's about changing it in flight in order to serve customers in the way that they want to be served in the future.''

Sir Charlie Mayfield CEO John Lewis Partnership

• ''Anticipating the need for change, defining a vision and building commitment towards it.''

Gavin Patterson CEO BT Group

• ‘’It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is

most adaptable to change.’’

Charles Darwin

• ''If you’re not prepared for the future today, you're history tomorrow''

Peter Hasler Chairman Swiss Post


This is a time of huge uncertainty that many

organisations are ill-equipped to face

Pull of

the past


Agenda

Common challenges





Maturity levels

Recommendations

Q&A


There have been lots of answers with varying degrees

of success……..

X

• Promised much - so often delivered little

• More about management control

• Often alienated customers



of success……..

CEM



of success……..

Omni-channel



of success……..

Digital Enterprise


Each answer seems to build on top of its predecessor

CRM

CEM

Omni-channel

Digital enterprise


Digital Industry

Transformation

Hybrid vendor & sourcing management

Adapting IT processes for

agility

IT services-led transformation

Reshaping IT for digital business

Infrastructure & application

platforms

Intelligent IT infrastructure

Architecting the hybrid IT

platform

Continuous modernization

strategies

Collaboration platforms & ecosystems

Unified device & application management

Replatforming the knowledge worker

Enabling next-generation workers

& practices

Data platforms & ecosystems

Managing the data mosaic

Refining data into insight

Pervasive analytics for business

Security platforms & ecosystems

Managing digital identities

Maintaining privacy & trust

Proactive approaches to cybersecurity

Cloud platforms & ecosystems

Strategies for cloud migration

Sourcing & managing

cloud services

The business value of cloud

IoT platforms & ecosystems

From mobile- first to

API-first Context-

aware business processes

Creating business value

from IoT

Customer engagement platforms & ecosystems

Conversational marketing

communications

Realtime customer analytics

Monetizing the customer

experience

Competitor Insight

Innovation

Vertical Strategies

Market Reach

Ecosystems

Delivery Models

Market Sizing

Customer Insight


Agenda

Common challenges





Maturity levels

Recommendations

Q&A


The future of an organisation is assured only if it

can maintain its relevance to its customers


Therefore one question demands an answer

How can we as an

enterprise remain

relevant to our

customers?


Agenda

Common challenges





Maturity levels

Recommendations

Q&A


Enterprises that are persistently relevant orchestrate 8

critical customer-adaptive attributes

Definition of a customer-adaptive

enterprise:

An organisation with the

capabilities to sense, anticipate,

adapt, and respond to rapid

change that influences

customers, their behaviors,

wants, and needs, at the right

frequency to remain persistently

relevant to them.

Customer

Visionary leadership

Engaged workforce

Collaborative

Insight & foresight –

sensing capabilities

Rewarding customer

experience

Continuous innovation

Connected, frictionless processes

Adaptive enterprise

architecture


Truphone generating growth through innovation and

global customer engagement

• Single-minded focus on the

customer

• Fully engaged workforce

• Global collaboration

• Acute sensing capabilities enable it

to be proactive

• High NPS reflects positive CX

• Continuous innovation in service

• Simplified connected processes

• Adaptive architecture by design

Global network – 8 nodes – local call rates

– local data speeds 66/200 countries in

Truphone zone


Agenda

Common challenges





Maturity levels

Recommendations

Q&A


Omni-channel CX & Continuous Innovation are the

twin engines of growth

Omni-channel CX Continuous innovation

One without the other is insufficient to ensure continued relevance


Superb customer experience will become a basic requirement


……and now customers have more communications

channels – increases the complexity of the challenge

Source: Ovum research

25% of

consumers use

1 or 2 channels

52% of

consumers use

3 or 4 channels

22% of

consumers use

5 or more

channels

trend


Seamless continuity of experience across

channels marks out the leaders

Source: Ovum SCI Maturity Model

Smart,

Connected

Interactions

(SCI)


Data, channels and devices come together


Map & understand customer journey and channel preferences

Do you know how your customers like to interact?

Do you offer smart, connected & relevant interactions?


Deeper insights and broader engagement are the

main drivers for CX investments in the UK

2. Customer analytics/ VoC

1.Mobile customer service

3. Proactive service

5. Web collaborative

service

4. Social service


But delivering a great experience alone is like flying

on one engine



Executive summary

The leadership of the enterprise must take control of innovation now, or risk

becoming irrelevant to its customers

Continuous innovation is essential for persistent relevance and growth

Most organisations struggle to innovate at the right frequency, and the biggest barrier is cultural

Ovum has identified 10 attributes shared by successful enterprise innovators

The Ovum innovation maturity model serves as a basis for developing this capability


Successful enterprise innovators have 10 attributes in

common

Leadership

Prioritise and foster innovation –

remove barriers, provide

resources/time, set challenges and

priorities, enable

Deep insight and

foresight

Market-led insights, current voice of the

customer (VoC), and horizon scanning of

emerging technologies

Coherent

innovation

strategy

Determine where and how to innovate.

Select markets in which to compete/engage.

Cast ideation net wide: crowdsourcing, co-

innovation

Balanced

innovation

portfolio

Healthy mix of sustaining and disruptive

innovation – products/services/customer

experience and business models

Adaptive

planning

Continuous versus annual planning cycle.

Rapid allocation of resources for disruptive

innovation

Dedicated

innovation team

Dedicated team to act as catalyst and 100%

focused on innovation

Formal

innovation

management

Coherent process from ideation through to

selection, prototyping and launch, and

product lifecycle management

Culture Foster experimentation; fail fast, succeed

sooner philosophy; agile approach

Highly

collaborative

Across the enterprise, and with customers,

partners, and suppliers

Relevant

ecosystem

Innovation partners, venturing and options,

incubation with entrepreneurial start-ups


Innovation must be embedded in strategic planning

Source: With kind permission from Professor Paul Trott – Innovation Management and NPD 5th edition 2012


Example generic innovation management process

VoC Communities

Workforce

Innovation Team


Techniques such as Design Thinking help foster multi-

disciplinary collaboration for breakthrough concepts


2 examples: Swiss Post and the Otto Group

Otto Group – Innovation team

publishes 6 monthly radar of

potential technologies

• Predictive analytics for

replenishment

• Dynamic pricing

Susanne Ruoff CEO Swiss Post

• 60,000 employees

• 0.15% of turnover

• Swiss innovation

network


Agenda

Common challenges





Maturity levels

Recommendations

Q&A


4 levels of maturity have been identified

Customer-Adaptive

CEO, board level sponsorship, enterprise-wide & ecosystem-wide commitment

Focused on:

• CX

• continuous

innovation

• anticipating

the future

Rele

vance t

o c

usto

mer

Coherence as an organisation

Extracted from Ovum Framework: Harnessing Voice of the Customer for Customer-Driven Transformation 2014

Augmented

CEO, board level sponsorship, enterprise-wide commitment

• Customer

journey’s

mapped

• Integrated

channels

• Context 360

Integrated Connected to back office – Transaction 360

Tactical

Departmental silos,

CRM for pipeline management

Persistent

Transient

Lacking Pervasive

Majority Direction 2015


Majority of organisations are weak in all areas –

disconnected from their customers, putting their futures at risk

Critical areas of weakness identified

Leadership ‒ Slow decision-making, suggesting

command-and-control is still prevalent

Partially engaged workforce ‒ Lack of

empowerment or concern for their aspirations

Weak sensing capabilities ‒ Largely flying blind as

lack both insight and foresight

Fragmented/disjointed customer experience ‒

Insufficient to meet rising customer expectations of

what a good experience should be – a bolt on

approach to technology

Innovation is haphazard ‒ No disciplined broad-

based innovation management capability in place =

hostage to fortune

Poorly aligned, overly complex & disconnected

mission critical processes ‒ Negative impact on

productivity and efficiency & critical information

flows

Lack an adaptive enterprise architecture ‒ Held

back by legacy systems and ad hoc IT approaches.

User experience is not consumer-grade level

Source: Ovum research 103 respondents


Decision cycles are too slow

Leadership attributes

Analysis & recommendations

Positives:

The customer is considered

central

Negatives:

Rapid adaptation is hampered

by traditional planning + slow to

re-allocate resources to exploit

new opportunities or to fix

pressing issues.

Recommendations:

Move to adaptive planning

methods for speed and greater

flexibility.


Workforce engagement levels need attention


Positives:

Gallup, in recent research, showed

engagement levels at 30% in US, IBM

Kenexa globally 54% ‒ this research

shows higher levels, averaging 60%.

Negatives:

The prevalence of silos has a negative

impact on collaboration and the

customer experience.

Recommendations:

Leaders must empower the workforce

more, pay attention to employee

aspirations, monitor morale, and

encourage wider collaboration.

Workforce engagement


More determined ESN adoption required


Positives:

Collaboration is seen as essential.

Negatives:

Cross-enterprise collaboration is still

patchy.

Hosting of external customer

communities is rare.

Recommendations:

Foster greater collaboration. Use ESN

and focus on practical use cases. Use

Ovum’s checklist as a starter.

Collaboration


Majority of organisations are flying blind

Sensing capabilities


Positives:

Top 5% are using realtime analytic

tools extensively.

Negatives:

• 95% of organisations have little

customer insight let alone foresight

and are flying blind.

• Predictive analytics are not yet

mainstream.

Recommendations:

Develop a holistic, coordinated

approach, covering both operational

and external data to drive insight and

foresight.



Positives:

Top 5% recognise and have taken steps

to create a seamless and positive

customer experience.

Negatives:

• Most organisations offer a

fragmented customer experience

• Siloed VoC

Recommendations:

• Map customer journeys

• Design CX

• Embed voice of the customer (VoC)

into the organisation with realtime

reporting and develop rapid reaction

capabilities.

• Measure the right things

Organisations deliver fragmented experience

Customer experience (CX)


Organisations too reliant on luck

Innovation management


Positives:

Top 3% led by CEO using broad-based

innovation management to innovate

continuously

Negatives:

• Majority of organisations invest too

much in cash cows

• Lack any innovation process beyond

the product or service teams

Recommendations:

• CEO must lead and encourage

• Widen the scope

• Adopt innovation management

platform to foster collaboration


Sub-optimized mission-critical processes

Mission-critical processes


Positives:

Top 5% have highly optimised and

connected mission-critical processes.

Negatives:

• Majority of organisations have

processes developed in departmental

isolation.

Recommendations:

• Map the value chain to identify

mission-critical processes

• Appoint senior-level owners with a

clear mandate to optimise and work

collaboratively to connect.

• Use VoC to drive continuous

improvement


Enterprise architecture (EA) is poorly understood

Adaptive enterprise architecture


Positives:

Unsurprisingly, the top 5% also scored

well on adaptive enterprise architecture

attributes.

Negatives:

• Most organisations don’t have one

Recommendations:

Get an Ovum briefing on EA if this is not

well understood within the organisation.


Agenda

Common challenges





Maturity levels

Recommendations

Q&A


Use the maturity model as a high-level enterprise

health check to identify weaknesses to address

1. Score yourselves on each criterion individually, using a

figure from one to four to denote maturity level

2. Aggregate the scores, identify any major differences,

and discuss them

3. Develop consensus on current maturity state and

critical gaps

4. Develop a consensus on their goals and priorities

5. Re-prioritise any existing projects in the light of this

consensus

6. Develop a realistic road map

7. Test assumptions on current state with a robust voice

of the customer program to gain input from customers

and workforce

8. Adjust priorities and road maps in the light of this

customer input

9. Resource it

10. Communicate frequently and involve the workforce

11. Monitor progress frequently.


Concluding thoughts

Become customer-adaptive to ensure continued customer relevance

Assess your own maturity and identify major gaps to fill

Don’t fly on one engine!

Take the test!


Thank you and any questions?

[email protected]

#jeremycoxCAE

mailto:[email protected]


Disclaimer

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The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Ovum delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Ovum can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Documents

The Customer-Adaptive Imperative - 4it Recruitment...innovation strategy Determine where and how to innovate. Select markets in which to compete/engage. Cast ideation net wide: crowdsourcing,