I was recently asked about the classic price vs service argument by a consultant who advises on IT outsourcing. I replied that I am surprised there is still a debate over this. You can compare IT supplier based on the quality of what they do and then compare equally competent suppliers on price, but price is not a primary variable that should be used to compare companies.
After all, if the service delivered does not work then how much have you saved? The price debate reminds me of where IT outsourcing was a decade ago – it was surprising to be asked about this in 2015 when most organisations have a far more mature approach to finding expert partners.
I looked at CIO magazine to see what they considered the key trends in IT outsourcing would be this year. They published a good summary at the beginning of the year and never once mentioned that price would be an important comparison point.
Several of the trends they identified are very important though and I don’t feel that they are being given enough focus in the business and technology media:
1. A focus on outcomes: outcome based pricing has been around for years, but is often focused on BPO outsourcing where specific business processes can be priced. A focus on the outcome rather than process of delivering IT will be how many projects are charged in future.
2. The business ordering direct. The CIO used to manage all information systems, but now the business units are doing far more ordering direct because many solutions can be delivered using apps or the cloud, therefore not impacting on the infrastructure managed by the CIO. This means that suppliers need to develop new relationships and change their sales strategy.
3. Analytics taking over. In areas such as CRM and customer service technology systems data is all that matters now. This approach to data-led decision-making is affecting many business functions including the more creative ones such as sales and marketing.
The IT outsourcing trends are changing and developing as the IT services space develops, but sometimes it seems that the advisors cannot escape some of the old debates.
by Irina for IBA Group
Posted on May 4, 2015
Social networks have evolved rapidly over the past few years. In the last decade tools like Myspace were primarily used for sharing pictures and messages with friends – the social aspect of the network was the primary reason to use it. Facebook took over and sharing cat videos remained an extremely popular pastime.
But now companies are using these same networks to interact with customers. Brands got used to watching out for content on blogs and then the review sites, as well as tweets and Facebook. The past half a decade or so has seen an enormous change in the way that corporate and customer relationships work and it looks like Facebook may be about to define the next wave of change.
The Facebook Messenger app has been around for a few years now. It’s a useful tool for keeping in touch with friends and in many ways removes the need to know the phone number of your friends because messages are all relayed through the Facebook system – even though the app functions entirely separately from the main Facebook app.
A new development called “Business on Messenger” is aimed at making the app a hub for customers and companies. Companies will be able to take orders on Messenger, send out order confirmations, send shipping status updates, track deliveries and customers will be able to directly send questions to sellers.
All this functionality will be offered to companies to use in a flexible way that works best for their business. For the customer these developments are welcome. Facebook is encouraging developers to build new apps around the messenger API so it looks like companies will be able to create a complete customer messaging system using the building blocks Facebook makes available.
In some markets the WhatsApp messenger has already become an important tool for brands to talk with customers – and Facebook already owns that app. I fully expect the two messenger services to be blended at some point, with the addition of all these added features that will make this a real hub for customers interacting with companies.
Will companies buy into the service from Facebook? I expect that they will because to build this infrastructure internally is very expensive. The end result is that companies will be able to get a very low cost customer management system, but it will mean that more customers will be tied into using Facebook – whether they want to or not.
by Irina for IBA Group
Posted on April 22, 2015
On April 16, the International Association of Outsourcing Professionals (www.iaop.org) released the second blog article devoted to The Global Outsourcing 100® list. This article recognizes companies for innovation programs.
The Programs for Innovation category of the IAOP’s Global Outsourcing 100 focuses not just on specific examples but on the programs that service providers and advisors have in place to identify and implement innovative solutions.
Today’s customers demand innovation from their providers and the outsourcing industry is looking for new ways to meet this growing demand. IAOP evaluated programs for innovation in The Global Outsourcing 100 for the first time.
IBA Group earned the highest 8 points in this category. The company received a full star recognition and its achievements in innovation were marked as the ‘Highest Rated’. This accomplishment looks especially impressive because the average score for innovation of the participating companies was 3.52.
IBA Group showed in its application that innovation is not a one-shot job for the company. IBA Group set up a Committee for Innovations headed by the IBA Group Chairman and created a company-wide Registry of Innovations. A special procedure on how to apply and approve or reject the ideas was implemented in the IBA intranet and a special venture fund was formed to finance the innovation procedure.
IBA Group implemented many successful initiatives through this procedure, including a mobile version of the IBA’s enterprise content management system and an Automated Fare Collection (AFC) system that earned a European IT & Software Excellence award for IBA Group.
The International Association of Outsourcing Professionals launched a series of blogs devoted to The Global Outsourcing 100® list that recognizes the world’s best outsourcing service providers and advisors. The blog articles are focused on the four judging categories of The Global Outsourcing 100 and on what it takes for companies not only to make the list, but to achieve distinguishing ‘stars’.
“Hip hip hooray…it’s not the New Year but it sure does feel like it around here with the buzz and excitement of IAOP’s 10th edition of The Global Outsourcing 100®!” – This is how IAOP opens its first series of blogs on The Global Outsourcing 100.
Each organization completed a rigorous, opt-in application to compete for inclusion in The Global Outsourcing 100. The achievements were assessed based on the following four distinct areas: Delivery; Programs for Innovation; Corporate Social Responsibility (CSR); and Size & Growth. Those companies that have distinguished themselves receive half or full stars in one or more specific judging category.
IBA Group has been enrolled in the rating, which is actually organized as a contest since 2006. The list has been evolving and the rules have been changing, but IBA and other outsourcing providers keep applying to be among the best 100. It is not only a good chance to receive exposure. It is also an opportunity to see how the company is doing against others and to set targets for improvement.
The first blog article by IAOP is devoted to the Delivery Excellence judging category. The category includes company recognitions, customer references, company certifications, and the number of Certified Outsourcing Professionals on staff.
Delivery Excellence is a strong area for IBA Group. This year, the company received the score 7.25 for delivery excellence of the highest 8 points. It is a distinguishing accomplishment, given that the average score of the participating companies in this category was 5.86. IAOP awarded IBA Group a half star for Delivery Excellence.
Technology is continuously evolving at such a rapid rate – it is impossible to predict with any certainty how it will impact on our lives in coming years. When people make predictions about how technology will evolve, try this exercise. Look back ten years and think of all the technologies you take for granted today: social networks, smart phones, mobile Internet, tablet computing. None of them existed even a decade ago – or were so nascent an elite few were the only users.
Think back a decade more and you will find yourself at the birth of the web. Adverts for major consumer products did not even feature URLs until the late 1990s. Now you see how difficult it is to predict what technologies will be common by 2015.
There will always be winners and losers in the search for new ways to use technology to achieve business success. The downfall of companies such as Nokia, Kodak, and Blackberry illustrate the consequences of not understanding how society is changing and using new technologies.
But one development that is likely to evolve further is technology outsourcing. As the world becomes more complex, it is even more unlikely that companies will retain the right kind of expertise internally. IT services will be outsourced more often because only the IT companies understand the complex technological solutions – rather than some of the drivers we saw a decade ago, such as labour arbitrage.
The globalization of IT is itself becoming more complex anyway. There are still IT service companies all over the world offering their services, but now they don’t always need to directly contract with a customer to provide a specific service. The cloud-based model allows service providers to offer a specific service – storage or computing power – that can be turned on and off as desired. The app store model many people use on their phone can also be used in the enterprise to create an environment where end users on the business front-end (not the IT department) can choose and install technology solutions themselves.
Change is taking place fast in the IT services market and nobody can predict how it will look in ten years, but one thing is for certain, IT experts need to offer a variety of delivery methods because enterprise IT is borrowing many of the ideas that consumers are already familiar with.
Last Wednesday, IBA Group was awarded for implementing the best vertical solution of the year. It happened at a gala reception organized by IT Europa to recognize the winners of the European IT & Software Excellence 2015 Awards.
Gyles Daubeney Brandreth, an English writer, broadcaster, and actor announced the results to the audience of more than 350 contestants and their colleagues, friends and families. Winners were selected from 83 finalists that represented 32 European countries. IBA was honored to be one of the winners.
We nominated one project in two categories. Those were Vertical Solution of the Year, and Public Sector and Utilities Solution of the Year. In both categories, IBA Group competed with six other finalists for an award. The Vertical Solution of the Year category turned out to be award-winning for IBA. Congratulations to the winning IBA team!
The project posed many challenges for the IBA team as they had to find answers to quite a few questions. Minsk has different types of public transport, each with specific features. How should we handle the specifics? Should the AFC be fully automated or use fare collectors? Should it use the internet as a communication channel? Which security technology is most suitable? Passengers prefer to use single paper tickets instead of transport cards. Will they agree to change their habits?
However, all these issues were solved and the system was launched. Today it is easy and comfortable to use. Passengers enjoy tapping their cards on validators and ticket inspectors produce proudly their automatic terminals to check the fares. The city authorities are able to analyze the operation of the public transport. This solution is just one example of how IT can improve people’s life.
The European Software & Solutions Summit that IT Europa conducted right before the Awards focused on the changes that the IT industry should be able to accommodate.
Oracle went on to say that Everything as a Service (XaaS) is becoming the preferred consumption model and every company is becoming a software company. Even cloud computing is no longer the same. It is evolving towards a fully integrated digital platform, argued Interoute.
Those businesses that adopt new technologies quicker than others are more likely to have experienced higher growth, concluded Verizon and IBA Group is looking to work with such customers.
For more information about the Awards, visit http://ibagroupit.com/en/newsroom/news/it-europa30-03-15.html and http://www.iteuropa.com/?q=winners-european-it-software-excellence-awards-2015-announced
by Irina for IBA Group
Posted on March 23, 2015
In my last blog, I mentioned that social networking technologies are changing how many companies use CRM. Opportunities are created to have a much deeper relationship with customers than was ever possible before and this goes far beyond just CRM alone.
But what is it that any company really wants? Why do they invest in all these technologies in the first place? There are many reasons, such as improving the customer experience, but possibly the most important is to generate customer loyalty. It costs far more to attract new customers to your business than to just keep the existing ones happy, so managing loyalty is important.
And as customers we all know about loyalty schemes. You probably have loyalty cards for your favourite hotel chain, airline, coffee store, bookstore, and supermarket. Every type of business tries giving away points and prizes to encourage loyalty.
The problem is that academics now believe that our present focus on loyalty through loyalty programmes doesn’t work very well. Take airlines for example. There are really only three major airline alliances, Star Alliance, One World, and SkyTeam. Serious business travellers just take a membership with all of them so they always collect points regardless of the airline used.
Most people use the supermarket that is closest to their home rather than travelling much further because they have a loyalty card from another store. Most of the time these loyalty cards don’t really create very much brand loyalty.
Smart companies today are looking at their CRM data and using a ‘buzz monitoring’ platform to analyse the social networks and then interacting with customers based on the information they can glean from the customer behaviour data. In effect, what is happening is that companies who know their customers well are able to use the data to create customer loyalty gifts and rewards that are targeted at the individual customer – not just points that every customer earns.
This is a big change in behaviour for many companies and it will be the back office technology that drives the information for this to work, but it is a natural shift. Customers have greater expectations on brands today and the first time a brand responds and rewards you in a unique and individual way will create a ‘wow’ moment for many customers.
It is these interactions based on data that will drive customer loyalty in future, not loyalty cards. Has any major brand ever rewarded you based on their knowledge of behaviour and how did that make you feel?
Social media is maturing and becoming an important part of the supply chain for many businesses. In areas like the media it is clearly a strong communication channel between content creators and their customers, but in other industries there has been an even deeper use of the technologies.
Take retail as a good example. For decades retailers have combined loyalty cards with CRM technologies to try predicting customer behaviour and to drive loyalty to certain products. There are many examples of retailers knowing individual customers better than their own family because of the data collected during their shopping trips.
A famous example is the US retailer Target sending discount coupons for products a new mother might want to a teenage girl. Her father was outraged, but he apologised to the retailer when his daughter confessed that she was in fact pregnant. The CRM system knew it before the father.
But traditional CRM has always relied on actual purchases and visits to the store. There had to be an actual interaction with a retailer to generate data that could then be analysed. With social networks and social media uploads customers provide information on their likes, desires, and preferences without even visiting the store.
This is a fantastic opportunity for retailers who can integrate social channels into their existing CRM. In addition to actual purchases, discounts and offers can be tailored to include preferences and the general sentiment of an entire group of customers.
It does require a different approach. Some kind of community management is usually needed for the retailer areas – such as the corporate Facebook page – and new software capable of ‘buzz monitoring’ other areas of the Internet has to be applied. But the opportunity for retailers of knowing their customers even better through the use of better technology systems is clear.
The same opportunity exists across all sectors – try searching for online discussions about your company name or products today. I’m sure you will find people talking about them. Now the question is, are they saying good things and if not, what do you do next to engage those customers?
Are you engaging with customers using social networking and how different is this data-driven approach to the old idea of a customer service team?
Companies such as banks have complained for years that their Customer Relationship Management (CRM) system doesn’t really work. The systems are expensive and yet they rarely return what was promised when the sales team demonstrated what could be achieved.
But I think that often, the real point of CRM has been lost somewhere between the software company sales pitch, the implementation, and the end user trying to make sense of how the system operates. Take a look at this article in The Financial Brand magazine… it lists 6 important reasons why you should be reconsidering CRM. The first reason asks these questions:
“How will the data in the CRM benefit my customer?”
“How can I use this to speed up our process, to benefit my customer?”
“What events could be triggered using this data to help my customer?”
“Is there info that can be gained from the data that would help me do what is best for my customer.”
“How can my sales team best use the data to identify opportunities to help my customer?”
I entirely support this view. If the CRM system is not entirely focused on planning how processes and data can benefit the customer then there is no value in the system.
I would go further and argue that with the abilities we now have, CRM expectations should be much higher. Think of your mobile phone company as a good example. They probably offer you a monthly tariff on a fixed contract that offers a certain amount of minutes talk-time, texts, and Internet access.
But if you use too much Internet time or talk too much the customer usually gets hit with penalties – or very high per minute costs.
Yet, why would any company want to do this to a customer? You want to help the customer, not hit them with penalties surely? Why not use the data that you have on how this customer behaves – how many minutes they use on average each month, how much Internet data they use – and offer a special tariff designed just for that individual customer?
We have the Big Data expertise to do this and the CRM systems, but there has rarely been a connection between the data and how it can truly help the customer. For companies that want to succeed today, this has to change.
Could Big Data help the buses in New York run on time? That’s what one city politician is hoping for. New York City Council Member Ben Kallos has campaigned for the Metropolitan Transit Authority (MTA) to openly release all their data on bus arrival and departure times.
Kallos is convinced that the buses never run on time. When he has complained in the past to the MTA they have always suggested that he is wrong. He managed to obtain three months worth of bus data and with the help of some data analysts he proved that the buses only ran on time 58% of the time.
The MTA has pleaded that the data is in a difficult format for it to be quickly released to the public so his project has not moved further than this pilot stage, but this demonstrates the power of citizens and politicians understanding how much data is available from public bodies.
London has released live position data for their buses for several years now. Anyone can create a Google map like this, showing the real-time position of all the buses in the city.
Some of these online maps may appear to have no purpose other than to astonish the viewer – look at how much data is available! However, when politicians start using Big Data projects to help citizens then the value of Big Data is clearly going mainstream and being understood by the general public.