16. Business strategy and customer experience drives
the Target Operating Model
Strategy Operating Model
WHAT we do
WHERE to play
HOW it’s done
HOW to win
WHO does what
Capabilities Enablers
Accountability
Products People
Governance
Customers Process
Metrics
Markets Technology
Culture
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18. The company now focuses on business
transformation
Building the Transformation Plan
What are we How can
trying to Where are we What should What should
today? we get Implement the Plan
achieve? we look like? we do? there?
Project Capability Capability/ Analysis Design
Scope Process Priority Design
& Priority
Policy Design
Policy Design
Customer
Project Product
Systems Business Plan
Kickoff Business Case
Metrics Build
Technology Technology
Architecture
Strategy/ Business Risk
Resources Plan Resources Roll-out
Goals Metrics
Governance
Location Structure
Clarify Vision,
Current State Future State Business Design &
Strategy & Roadmap
Assessment Design Case Implementation
Objectives
Stakeholder Engagement / Change Management
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Image Source: iStockPhotoSPEAKER: DerekThis age of the customer power requires a top to bottom transformation. That’s not limited to new servers, or killer applications or even highly efficient processes … For many organizations … it means a change to the way the organization thinks about itself. It means getting at the heart of the brand and working that throughout your business.
Most companiesYou think you are running vibvrant org …. Something goes wrong and you put a bandaid on it. Band aids don’t work on plants … the pressure of blood flow
Our research shows that while the initial focus is on efficiency and cost containment (waste elimination), the longer term opportunity is to use BPM to deliver better and more consistent customer outcomes (value innovation). Eureka Moment – If I improve my customer experience, taking out what the customer doesn’t want … then that will gives me cost reduction. But then I discover that by focusing more on the customer experience, I learn new things that the customer wants, that I wouldn’t have discovered anywhere else. It allows me to innovate that experience and deliver more value, distinguishing my offering from that of the competitors. And hey presto, I realize that the balanced approach is what works. The theme behind it is the learning process – competitive advantage comes from focusing on the needs of the customer. Therefore – the ability to design and deliver compelling customer experience becomes a key objective.
Source: North American Technographics® Customer Experience Online Survey, Q4 2010 (US)
If a $10B company, makes a 10% improvement in their customer experience index … the net result is the additional revenue from Referrals, repeat business and cross selling additional products
Derek – 1 minuteSource: “Built To Love” - Peter Boatwright and Jonathan Cagan, Professors at Carnegie Mellon UniversityA couple of Professors at Carnegie Mellon selected 40 firms that provide high emotion experiences … and looked at how they performed - over a 10 year period, they outperformed the S&P by more than 10 times. And if you subtracted Google and Apple – it’s still 8 times. That’s powerful evidence for why this sort of transformation is necessary (and an important part of the business case).
Image source:istockphoto
Point is that if we took away the small organizations from the higher maturity levels (less than 1000 employees), then this top line becomes 100%
It’s all about the customer and the services you provide to them. Even if you make products, think of it as a service from the customers point of view. At the other end, capabilities are about the things that the business just cannot escape from. Capabilities represent something that the business entity does — describing an outcome — that creates value for other participants. A business capability usually abstracts and encapsulates the people, processes, technology, and information required to create that value. Capability is an encapsulation of purpose. Processes then become how capabilities are packaged to deliver services. TOMs can inform organizational design efforts, process architectures and related governance policies, and the definition of customer engagement strategies to support service offerings; they can also influence financial planning and project phasing. The challenge is to communicate the TOM in a meaningful form that business leaders can understand and use to support their decision-making.
Examples - Medco 2.0, Business Transformation Practices, What is the brand vision all about?Does the current customer experience reinforce the brand?What are organizational skills need to change to deliver the desired experience?How will you envision that experience? How will this service reinforce the corporate brand?What sort of behaviors do employees need to exhibit?What is it about the new experience that customers will really love?How will you deliver that experience every time?How will you measure that delivery?
