/Tag: eCommerce

Is Enterprise Architecture accountable for improving customer experience?

By |2012-10-02T00:18:15+00:00October 2nd, 2012|Enterprise Architecture|

A recent experience with poor customer service has got me thinking about the role of EA in addressing customer experience issues. 

One of the last things I was working on, while still in Microsoft IT, was working on an initiative to systematically help improve customer experience.  With that experience fresh in mind, I was dealing with an issue with my Tivo DVR today where the Tivo box started to misbehave.  I began a chat with their representative and the experience was less than ideal.  (If someone from Tivo wants to chat, just drop me a line for details).

That got me thinking.  Can EA help?  In general, can EA be part of the solution to problems caused by poor customer experiences? 

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Customer Services is important to the success of any organization

First off, I’d like to say that customer experience is one of the most important elements of the highly competitive online world.  The Web has made it very easy for customers to abandon their existing relationships and switch to new ones.  Even the slightest provocation can send a customer in search of a competitor, and the features of a product are not as “sticky” as they once were.  It is increasingly easy for new small companies to appear that copy all of the key features of a technology and release a competing product, sometimes within a few months of the first one.  The results can be fierce competition that, unfortunately, is often addressed in courtrooms instead of the marketplace (Samsung vs. Apple, Google vs. Microsoft, Apple vs. Microsoft, etc.).

Some companies will not pay proper attention to their customer’s experience.  This is fairly common, especially in manufacturing companies where there are both software and hardware components involved.  For some reason, the fact that two different engineering teams are involved often produces a disjointed experience.  (Apple has been leading the way in addressing these kinds of problems.  The rest of us need to do so as well).

What are the questions you must always be ready to answer?  (The Ten Strategic Questions)

In general, an Enterprise Architect assists with the development of strategic alignment, not by deciding what is important, but making sure that executives don’t miss the important stuff while they are overwhelmed with the mundane.  One way to anchor your analysis to ensure that YOU don’t miss the important stuff is to consider some of the high level tools suggested in traditional strategic analysis… tools like SWOT analysis, Five Forces analysis, and partner accountability mapping.  However, most of those tools do a poor job of considering the importance of customer experience to enterprise success.

The model that I use is the EA metamodel behind business models.  In a prior post, I created a rationalized ontology for the business model canvas that addressed the gaps left by Osterwalder in his analysis.  However, in keeping with the effort to make that kind of model useful, I followed the pattern of Osterwalder and created a visual table that represented the corrected business model ontology.

image

The guidance that you can get from this is to look at each of the blocks in the canvas and consider the possibility that you have not missed anything important in that block.  Therefore, if you use this model, you would ask the following ten questions:

  • Are we targeting the right customers for the growth that we need?  (Customer Profile)
  • Do we have a good understanding of what our customers want and need? (VOC)
  • Do we have a compelling value proposition to address the needs and demands of those customers? (Value Proposition)
  • Are we developing products and services that deliver on our value proposition, or is there a gap in our products and/or services that we need to address? (Products and Services)
  • Have we considered all of the channels we should be using, or are we using too many channels, to distribute our products and services to our customers? (Channels)
  • Do we have a good idea of the resources we need to deliver on our value proposition? (Resources)
  • Do we know how to use our resources sufficiently well to produce the results that customers expect? (Required Competencies)
  • Have we addressed all the cost and revenue implications of the resources, competencies, and channels that we’ve selected? (Cost and Revenue Models)
  • Are we reaching our customers in the geographies and locales in which they live and work, and if not, why not? (Geographies and Locales)
  • Have we relied on partners in the right way, leveraging their strengths and the cost implications of using them without opening ourselves to problems of key dependencies? (partner profiles)

This list of questions includes the core questions that we need to be asking in order to address customer experience issues at the strategic level.  This is a far more comprehensive list that “5 forces” or “SWOT” and will help you to ensure that you are not missing anything. 

How does Enterprise Architecture address customer experience?

The actual experience of a customer is a function of their needs and your products.  If a customer needs to drive a nail, a hammer will do.  If the customer needs to drive their car to an unfamiliar place, then a Global Positioning System with turn-by-turn directions would be more compelling.  If you offer the customer a product that does NOT meet their needs (like a GPS that only shows maps, but doesn’t tell the driver where and when to turn), then they will not be loyal to the product.  Their experience will be poor and they will quickly find better products.

Customers don’t want ten inch drills.  They want ten inch holes.

When doing a strategy workshop, it is best for the Enterprise Architect to walk in to the workshop with all their preparation in place.  Walking in unprepared will produce really poor results.  To be prepared, the Enterprise Architect will have already collected the list of “proposed strategies” for the coming period and will have analyzed those strategies from the standpoint of the organization’s business model(s).  In other words, for each of the questions above, which ones are being answered by strategy.  Now, f
or the kicker, which ones are not? 

Customer experience may already be covered by a strategy, and if it is, you have to do very little.  Simply make sure that everyone sees the relative value of that strategy when compared to others (like reducing costs or negotiating new boundaries with existing partners).  That is not simple, but not as difficult as the alternative: no strategy for customer experience.

On the other hand, let’s assume that there are goals, or objectives, or themes (rarely actual strategies) already articulated that address the other areas of business model considerations, like costs, or products, or partners.  Address the lack of customer focus in your interviews PRIOR to the strategic workshop.  Ask your key stakeholders what their customers need.  Specifically don’t ask for how those needs are being met… ask what the needs are!  Make sure that you plant, in the minds of your stakeholders, the seeds of doubt: do we KNOW what our customers want and need?  Is it written down?  Would our customers agree with what we wrote down?

During the workshop, propose an initiative to capture the needs of the customers (of each business model) and to map the products and services to those needs.  This will let you answer the question: are our products and services meeting the needs of customers?  This may involve the development of user personas, scenarios, and competitive surveys.  This initiative, when complete, will provide the ammunition that you will need later to propose initiatives to address customer experience gaps. 

Note that gaps can exist in many places… not just in the products themselves, but also in the customer service experience that occurs when customers are not happy with their products or have an issue with them. 

Conclusion

Enterprise Architecture is a strategic planning function that uses a methodical scientific approach to address the gaps between the goals of a business and the execution of strategy needed to reach them.  Using the TEN STRATEGIC QUESTIONS above, Enterprise Architects can capture opportunities and oversights that senior executives may miss.  One of those key questions addresses customer experience issues. 

Therefore, when an organization fails to deliver good customer experiences, Enterprise Architecture, when used properly, can help to address the situation.

IT is part of the business, but not for the reasons you think

By |2011-06-16T03:52:00+00:00June 16th, 2011|Enterprise Architecture|

A colleague of mine, Gabriel Morgan, pointed out a recent Infoworld article by Bob Lewis called “Why running IT as a business is a train wreck waiting to happen.”  So, I read the article and while I agree with some of Mr. Lewis sentiments, his logical arguments are completely random and his conclusions are therefore without basis.  His article is one giant non-sequitur. 

In the article, Mr. Lewis points out that many IT groups have adopted the mantra of “running IT like a business.”  He goes on to indicate that this is a bad idea and quotes a few folks in interesting ways.  The logic of the argument starts to get really weird from there, completely failing to make connections.

Let’s take a moment to examine the logical argument that he made and see if it holds up.

  • Assertion: Running IT like a business is nonsense.
  • Evidence: CIO complaint that IT cannot deliver competitive services: e.g. a $200 PC to a business customer  (won’t run his apps), or cheap file and print server hosting. 
  • He then goes on to discuss situations where the IT department listened carefully to the customers and created bad solutions that met their needs exactly as described. 

Somewhere along the way, Mr. Lewis has implied something… that these two things are somehow related to one another.  He has assumed that “running IT like a business” is the same as “doing everything your customer asked, even if it is crazy.”

The kernel of the argument finally comes about half-way through.  Mr. Lewis states:

“When IT acts as a separate, stand-alone business, the rest of the enterprise will treat it as a vendor. Other than in dysfunctional, highly political environments, business executives don’t trust vendors to the extent they trust each other.”

Mr. Lewis is not ambiguous in this statement.  If you run IT as a business, he says, you kill trust.  Why?  Because no one trusts a business.  They must be in it for themselves.  They must not be on my side.  Businesses are not to be trusted.  From a logical standpoint, A implies B.  Period.

Unfortunately for Mr. Lewis, it is fairly easy to disprove an implication like that… find a single case where A doesn’t imply B.  One single case is all we need.  With one case, the rule is broken… the argument becomes a fallacy.  That doesn’t mean that the conclusion is wrong.  It just means that the conclusion is not supported by the argument.  The conclusion could be correct, but not caused by the things he says are the cause. 

And this is why I had such a hard time reading this seriously flawed article.  I saw that the argument was a fallacy because I was able to disprove it almost instantly.  And I bet you can too.

Thought experiment:

Is there a business that you trust?  Any business?  Let’s say that you took a loan to buy your car.  You pay a fixed amount of money every month to pay off the loan.  You are doing business with that bank.

Do you trust the bank?  Technically, they could come and repossess your car at any time.  Yet, I’m willing to bet that most of my readers have gone all the way through a car loan without ever being in fear of repossession.  Why?  Because you TRUSTED the bank… as long as you paid your monthly payment on time, you TRUSTED that it was in their best interest not to repossess the car.

Here’s another case. 

Does your company use a payroll processing vendor to handle the payroll?  Many companies do.  After your company started using the payroll processing company, did a bad relationship result between your company and the payroll processing vendor?  I’m sure that happens sometimes, but given the fact that most companies are extremely loyal to their payroll processing vendor, it doesn’t happen that often.  The payroll processing vendor offers a clear and simple service.  The business buys it.  Everyone is happy.

Mr. Lewis goes on to dispense GOOD advice, but he does it in the name of getting rid of the BAD mantra of “running IT as a business.”  The good advice is good, despite the fact that it had nothing to do with the BAD things he pointed at. 

For example the article states:

Nobody in IT should ever say, “You’re my customer and my job is to make sure you’re satisfied,” or ask, “What do you want me to do?”

Instead, they should say, “My job is to help you and the company succeed,” followed by “Show me how you do things now,” and “Let’s figure out a better way of getting this done.”

This is good advice. 

But the bad practice of “doing whatever a customer asks” is NOT the result of “running IT as a business.”  I don’t know of many businesses who run that way.  Let’s see if you do.  Thought experiment: Please provide an example of a business that you do business with today in your personal life that meets this criteria: you hire them to provide you a custom service.  You tell them how to provide the service, what the service will look like, all the features and aspects of the service, and then you ask them to operate the service indefinitely while you complain about the cost.

Go ahead.  Name a single business in your personal life that runs that way. 

What really happens?  Let’s see.  You go to a car dealership and you say “I want a car.”  The dealer asks some questions and then points you to one of their STANDARD services (one of their five car models) and then tells you how that model will meet your needs.  They don’t offer a car with five wheels or three engines.  They have a set of products and they help you to pick the best one.

Let’s consider another business, a service business.  I pay my cell phone bill every month.  Sometimes it costs more than others.  If I look at my bill, I may see that I downloaded ringtones, or went over my allotted number of minutes.  The service is custom: after all, I got different services than my neighbor, right?  Not really.  I got different Quantities of the same services.  The services were standard.  What varied were the quantities.

Here’s another example: go into a restaurant.  Buy dinner.  When the bill comes, ask the restaurant to break down the costs of the bill.  Let’s say I take my wife to a nice steakhouse.  We spend $100 on a nice dinner.  When the waiter brings me the bill, can I send it back and ask the business to tell me where every dollar went?  Can I decide not to pay for the bathroom (after all, I didn’t use it)?  How about the fees that the restaurant pays for health inspections?  Can I choose not to pay for that?  No… because I got $100 worth of value from my experience.

That is what it means to “run IT as a business.”  It means to make sure that the business gets value out of their experience.

In Microsoft, we have more than one IT group.  We have several.  I watched an excellent example play out that I’d like to share… one which shows the value of “running IT as a business.”

In three separate IT groups, we were doing eCommerce in different ways.  One group (team R) had a single storefront, and they did their billing through an agreement with Cybersource.  In another group, (Team O), there was a nice platform for building eCommerce sites that was used by about 20 different areas of the business.  You could build a front end, shopping basket, and checkout process for a flat price and the team took care of all the backoffice stuff for you.  Your business got all of the revenue minus the service charges that the bank charged.    In a third group, (team C) an independent business unit had created their own eCommerce system that did only the credit card billing but none of the front-end work.  This one charged its customers on a per-transaction basis.

Over the years, these different teams would compete with one another.  Every time a new business need arose for eCommerce, that business could visit each of these three different groups to ask what they did.  Most folks don’t want to create an eCommerce platform so there is a built-in incentive to reuse things.

All this played out over nearly a decade.  Nowadays, one team has become the clear winner.  Nearly all eCommerce in the company goes through it.  The other two still exist, but not for long.  Both are on the way out. 

Did the survivor have the best platform?  Nope.  It was not the most reliable.  It was not the one that handled the most currencies, or ran in the most countries.  It was not the easiest one to build to.  So why did it succeed?

I believe it was because that IT team had a very simple model for offering themselves as a service to their business customers. 

Basically, any business in the company could use that particular platform for a transaction fee.  But it wasn’t an accounting nightmare.  There are no bean counters.  No complex charge-back schemes.  It is much simpler than that. 

Each business unit answers two simple questions at the beginning of the budget cycle: (a) which of the three standard eCommerce services do you want to buy, and (b) how many transactions do you estimate you will incur?  That’s it.  With these two variables and a little simple math, each team would PREPAY for all of their eCommerce services for the year.  Easy to budget.  All the “rules” fit on a single page.  Nothing complex.  Estimates were based on last year’s numbers, so it was pretty tough to “intentionally underestimate” the transactions.  All the differences ended up simply washing out. 

But what if you are a business customer of the eCommerce service and you want some changes?  You want the eCommerce team to add a feature?  Go ahead and ask.  It’s a software project, and you will still pay for the changes, but the interesting thing is this: the changes ended up being subsidized.  You see, the program made a small profit on the sale of per-transaction fees.  They used that profit to subsidize the change requests, so that each change request ended up costing far less than a typical IT organization would charge. 

It is easy to compete when you do a little creative cost-shifting.  That is how businesses actually run:  Standard services at Reasonable prices.  Solid value that is clearly articulated.  Understandable billing.  Good customer service.  Oodles of cost shifting. 

Successful businesses run that way.  Apparently, so do successful IT services.

The per-transaction fees were easy to understand and, like the $100 dinner, were not cheap but were worth the cost.  More importantly, that IT team did not divulge every detail of the costs to their business customers.  There was no need to account for the cost of architecture and the cost of project management and the cost of hardware as separate line items.  The customer never saw any of that.  Customers saw the cost of something they could perceive as valuable: the cost of the transaction.  Everything else was hidden.  Just like I may pay for the steak dinner, and the restaurant would pay for the cook and the electric bill, the customer of the eCommerce service paid for the transaction and the IT team would use that money to pay for the architect and the ESB bus.

That is what it means to “Run IT as a Business.” 

All I need is one case to disprove the logical argument that Bob Lewis presented in his InfoWorld article, and I had found it… many times over.  Mr. Lewis’ argument is flawed because Mr. Lewis seems to ignore the way businesses actually run.

Kudos to Cambridge for refusing to cover up security holes in “Chip and PIN”

By |2010-12-26T01:51:09+00:00December 26th, 2010|Enterprise Architecture|

One challenge with long-running news stories is that it is often difficult to keep track of the “current” bits.  Even important news can seem like “old” news because the problem is taking so long to be resolved, or even addressed.  What worries me is that many folks, especially here in the USA, are completely unaware of this story. 

I’m talking about the flaws in the Chip-and-PIN system for credit card validation and in the “Verified by Visa” ecommerce validation systems.  It turns out that both systems, heavily invested attempts by the credit card industry to reduce fraud, have not had the intended effect.  Fraud has increased, despite both changes.  Security researchers at Cambridge University have pointed out these flaws for years, in paper after paper, in the open.

Here’s the kicker.  On December 1, 2010, the UK credit card industry sent a letter to Cambridge to ask them to take a research paper off of their website.  Effectively, they asked the University of Sir Isaac Newton and Charles Darwin to censor the valid (yet embarrassing) research of one of their own scholars because he pointed out serious flaws in the Chip-and-PIN system.  I am not surprised by their request, nor by the response of the University… they refused

On the other hand, at the first sign of censorship, I encourage all of us to Read Dangerous Works, Think Dangerous Thoughts, and Embrace Dangerous Ideas.  Only through the consumption of dangerous ideas can they survive.  And survive they must, because all truly innovative ideas were, at one time or another, dangerous. 

What makes an idea dangerous?  When a powerful person seeks to censor it, it is dangerous.  This goes for burned books, blasphemous websites, and, yes, for dry technical white papers that point out that the banks are pushing for a massive shift in liability, hoping to move liability for fraud from the banks to the banking customers, to the tune of hundreds of millions of dollars, by “selling” us on a security system that is not secure.

The researchers at Cambridge have been getting the media to notice.  I encourage folks to watch this YouTube video, part of a BBC news broadcast:

 

Now, my regular readers may be surprised to see me take a stand against censorship.  After all, just a few weeks ago, I expressed strong concern over the publication, by Wikileaks, of a list of potentially valuable targets for terrorists.  Was I not asking for censorship then?  What changed?

I walk a fine line here.  After all, what is the principle that I am following that says “Cambridge is right to publish instructions for thieves while Wikileaks is bad for publishing instructions for terrorists.”  The principle is simple: value for human life.  If information, widely shared, has the opportunity to lead directly to the loss of human life, it should not be widely shared.  If, on the other hand, information widely shared can drive good behavior on the part of powerful people without endangering human life, it should be shared. 

Falsely yelling “Fire” in a crowded theater is not “protected free speech” because people can be injured or killed.  On the other hand, publishing a list of theatres that have inadequate fire safety protections is protected free speech, because the theatre owners now have a reason to improve their safety records or face the loss of business to competing (safer) theatres.  (If this example seems a bit antiquated, especially to those folks from outside the USA, I’m referring to a case in the US Supreme Court in 1919). 

The publication of imperfections in the security scheme of credit cards is similar to my example of publishing a list of theatres with poor fire-safety protections.  Customers who frequent merchants using the Chip-and-PIN system, and the Verified by Visa system, are not safer as a result and may, in fact, be LESS secure.  As consumers, and free citizens, we have the right to not only vote with our wallets, but also demand regulations that will drive good behavior on the part of credit card companies.  Now that the USA has a branch of the government specifically chartered with Consumer Protection, perhaps this is an issue that they can take up.