Outsourcing Trends Becoming Important in 2015

IBA Group
Mark Hillary

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.

Are Social Networks Becoming The Infrastructure Of Industry?

IBA Group
Mark Hillary

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.

Will Social Networking Transform Customer Loyalty?

IBA Group
Mark Hillary

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?

Mixing Social Networking with CRM

IBA Group
Mark Hillary

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?

When Will CRM Finally Work Properly?

IBA Group
Mark Hillary

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. A recent article in The Financial Brand magazine 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.

Find Business Everywhere

IBA Gomel
Iryna Zhurava

Keeping log of business relationships is not only the concern of a salesperson but also of everyone who has to work with clients, vendors or suppliers. It is not a newsflash that with the evolved technology there is no more need for long paper forms, notebooks, and business card holders and everything can be stored in a mobile device.

People from different divisions within IBA Group were looking for a mobile application that is easy to use, can store safely business information of a contact person and a summary of the conversation, can get more information about the interlocutor’s company form social media, can be useful in one-on-one meetings and trade fairs, and has other advantages. There are mobile applications that do that stuff, but not all of them together.

Our developers took the challenge and came up with a mobile application for iPhone and iPad called Marketing Application for Leads at Events (IBA.MALE). This application provides a solution for the following requirements:

• Use at events: upload a list of possible persons who will be at that event
• Capture and store interlocutor’s business information:

o by scanning of a business card and recognition of the text on it
o by scanning and recognition of a barcode or QR code and matching these with the person’s data in the pre-uploaded list
o by manual entry of information

• Receive online information on interlocutor’s company. The application allows for retrieving information on the contact person from LinkedIn online. It takes less than a minute
• Log the conversation summary
• Easy search of contacts by name, title, location or interests
• Export of contacts via email or Bluetooth.

With an existing free version of the application IBA.MALE Light you can check most capabilities of the application and decide whether to buy a full version of the application.

The Big Picture on Customer Service, CRM, and Big Data

IBA Group
Mark Hillary

Last month I was in London, invited to speak at an event hosted by the IBA Group. The theme of the event was the resurgence of CRM and how it is being combined with Big Data and becoming an important part of corporate strategy today – particularly for companies planning how to improve their customer service.

The analyst Peter Ryan from Ovum was up before me. He talked about the strategic use of CRM and how the improved use of information feeds into a customer service strategy. Ovum has predicted that improving the customer experience will be even more important than improving revenues for companies in 2015 therefore this theme is taking on a new significance.

The director of Internet Solutions at IBA, Aliaksei Minkevich, was also speaking. He described some case studies and drove home the real importance of thinking about technology projects and how they can improve the way a business uses data. Aliaksei was particularly focused on describing how a technology solution is no longer as simple as it used to be. Much of the business benefit from processes and systems today comes from the opportunities to use information in a smarter way, rather than just reducing cost or aiming for efficiency.

I started talking about the connection – as I see it – between modern day CRM and Big Data. The way customers interact with companies in all industries has changed in the past decade and this wider social change in how people communicate has to be appreciated by corporate executives.

The two big drivers of this change were the launch of the iPhone in 2007 and the explosion in the use of social networks from 2008 – both very recent dates. Of course it was possible to use the mobile Internet before the iPhone, but Apple made it so much easier and easy access became the expectation from consumers.

And, of course, people were using social networks prior to 2008, but this was when it really went mainstream. Facebook started maturing and Twitter became commonly mentioned in broadcast media, such as radio and TV. 2008 was really the tipping point when social networks became normal for everyone.

These developments have changed the way customers interact with companies. It is now fairly normal for any customer to use at least six different channels when interacting with brands – email, voice, chat, Facebook, Twitter, and review or rating websites like Tripadvisor. There are more and this changes all the time, but this is already a very different environment when compared to those days before social networks and the mobile Internet were common.

So companies should no longer be exploring how to improve customer service as an activity, they need to be working harder at Customer Relationship Management – back to CRM again. This is because the real measure of success with customers in this multichannel environment is the quality of the engagement between the brand and the customer.

Getting this right demands the use of some serious technology. Running a customer service team no longer means just answering the phone, it needs data analysts, knowledge of Big Data, and a CRM system that allows the customer to engage and enjoy interacting with the brand.

Companies that can deliver this kind of technology in a way that improves the experience of your customers are going to lead the way. Tech players will become customer service experts as the use of technology underpins how companies interact with their customers.

Underneath all this remains the fact that how we all communicate has changed. If you want any executive to understand why this is important, then just ask them about the last time they needed to select a politician to vote for, a restaurant to eat in, or a hotel to stay in. If all these decisions are now being shaped by data, then don’t you think that the relationship between your own customers and your company are also about to be shaped the same way?

 

Big Data and CRM

We have it all in this London event featuring international speakers

It’s good to explore the future. At IBA we are always looked ahead to what is coming next, this is one of the reasons why we host this blog. It’s also why we have arranged an exciting event in London titled “The Big Picture on Big Data and Customer Relationships: Case Studies and Thoughts for the Future.

We have three great speakers lined up for the event.

Mark Hillary is an IT director who became a writer. His most recent book explores the subject of CEOs who blog, but he has also written about outsourcing and the globalisation of services. Mark is based in Brazil. Mark will talk about how Big Data and the analysis of customer information is changing the way companies are structured.

Peter Ryan is a principal analyst at Ovum. He is one of the best-known global analysts focused on customer service and experience. Peter is based in Canada. Peter will talk about the way that CRM is changing customer interactions and how companies relate to customers.

Aliaksei Minkevich, the director of our Internet Solutions Division will present some case studies of our own work in this area. Aliaksei is based in Belarus.

All three speakers are travelling to London to share their ideas and we are thrilled to host this event. It will take place on November 27 at the Institute of Directors in London.