from Claus Jepsen
This article originally appeared in Forbes
Almost all sectors are talking about the importance of moving at the speed of the customer and customer-centricity, but hardly anyone achieves either. Often this is because they can only move as fast as their legacy systems and have a view on the customer rendered incoherent by fragmented data.
Historically, services and products have been provided to customers based upon the terms and operational capability of the provider. For everyone’s benefit, this rigidity is being replaced by a more flexible model with far greater emphasis on the customer.
There are many trends impacting how companies go about their business — from increased competition, new regulations and the war for talent, to falling productivity rates, a new digital landscape and entirely new business models. The most important, though, is the rapidly changing world of the customer. It impacts every other trend, and this is perhaps why customer-centricity is top of the agenda for most CEOs.
Why Customer-Centricity Matters
“There is only one boss; the customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.” —Sam Walton, Founder of Walmart
The transparency of the internet and the convenience of handheld devices have afforded the customer a multitude of choices for almost any service or product. With just their fingertips, they can get world-class services at any place in the world, at any point in time. Digital working has enabled companies to provide customers variety. And, if a model takes hold, the uptake is incredibly fast and only getting faster.
What Is The Missing Link Between Jobs And People?
For businesses that are using traditional legacy systems on the wrong side of the digital divide, this presents a huge problem. Silos and unyielding processes are not best suited to the needs of diverse customers that demand instant gratification. Is the answer digital technology? Well, it is and it isn’t. I don’t believe there is a single cure-all technology answer. No single vendor can possibly predict the wants and needs of all customers or develop functionality fast enough to react with any meaning to all customer needs.
I believe the optimal route to customer-centricity is developing a digital mindset twinned with a scalable and agile technology environment. This is how you can do it:
1. Build microservices.
Dennis Crowley from Foursquare said, “Stop sketching, start building.” Microservices enable that. They are a collection of applications that are loosely coupled. Rather than implementing vast systems, businesses can take a much faster, modular approach to technology by developing functionality that can be independently deployed and organized around the fast evolution of customers’ requirements.
The proliferation of no-code and visual-code environments gives businesses a means to build their own microservice applications. Currently, citizen developers are taking advantage of the simplicity of visual coding tools, but enterprises are more reluctant. As we saw with the utility of mobile devices, I think this will change because it is now easy and helpful for employees to self-create applications that make their jobs easier. It is inevitable that employees, frustrated by the glacial speed of organizations, will take it upon themselves to use these intuitive environments that deliver on a promise of customer-centricity.
2. Implement flexible ERP.
Microservices provide the flexibility and agility needed to scale to customer demands, but working in isolation, they do not join the data for a holistic view of what is happening in the market. This is where ERP steps in. It can act as the core platform from which microservices can be bolted on and where a single view of data is held. Such ERP must have specific characteristics:
- It must be agnostic to integration, feeding and receiving information with any microservice.
- ERP must be out-of-the-box and free of customization. This means it can be updated to the latest functionality quickly without the need for expensive contractors and without impacting the surrounding microservices.
- It should be vertically-specific with baked-in good practice for your sector.
- Avoid customization but embrace configuration. ERP that is easily configurable can give companies the edge when it comes to adapting to constant change.
3. Use the right data.
From both internal sources that cover mobile devices, the internet of things, or laptops, to external sources like customer feedback or social media, most businesses are certainly generating big data. The problem is, as organizations have evolved and grown, they are generating data faster than their siloed systems can manage. Therefore, this information does not deliver optimal value.
In order to understand customers and provide illuminations that shape business processes (and microservice development) according to their wants and needs, you need the right data. This means looking at data as a science and developing skills internally coupled with analytics, forecasting, machine learning and artificial intelligence, that can identify the trends that drive buying decisions and impact customer loyalty.
Benefits Of Insight And Flexibility
There are multiple benefits to this approach. With these three components acting as one, businesses can understand customers’ changing product and service diets: Microservices to “customize,” ERP to (where possible) standardize processes and identify trends, and the right data to shape the business model around the insights.
Forward-thinking businesses have an opportunity to reverse the business model. Rather than providing services predicated on managing operations from executives’ orders down, they can manage operations based upon customer insight. This is real customer-centricity that will bring with it a virtuous circle of benefits to all.
Customers will enjoy an improved service as their needs are being met faster and on their terms. This can lead to improved customer loyalty, new business and increased revenue. Most importantly, this approach is fast, scalable and relatively inexpensive. Businesses can make things happen by testing product and service ideas. It’s an opportunity for big companies to change their mindset, to become more digital — entrepreneurial even.
We are at a turning point in the relationship between provider and customer; buyer power is rising exponentially. The question for businesses is: Do they embrace it or ignore it? There is, of course, only one answer.