Bhavesh's Tryst

The Future of Corporate IT Looks a Lot Like Google

by Jeanne G. Harris, Allan E. Alter, and Kelly L Dempski | 12:00 PM July 31, 2013

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They tweet. They showroom. They pin and like and yelp. And whenever they do, customers accelerate corporate IT's biggest challenge: to rethink and reinvent itself. The implications stretch beyond any one hot seat in the C-suite.

More than ever, customer experiences are based on a foundation of technology and delivered to a digitally-savvy population. Digital experiences come in many guises: mobile apps, web sites, how-to videos on YouTube, LCD screens on products (think of exercise machines that track calories burned). Some experiences come through channels that companies can influence but not control, such as social networks and review sites.

Digital experiences unleash more ways for companies to influence and satisfy the customer, and differentiate themselves from competitors. But there's a catch for CIOs and other tech-minded executives: to keep creating opportunities, companies must keep changing the experience or fall behind. Each generation of technologies raises customer expectations beyond the last.

In part, this is because customers will keep raising the bar for satisfaction and attention as they use the new technologies and services. But emerging technologies will also enable customer experiences that are far superior to those of today. For example, companies will anticipate customers' future needs, and act like personal advisors. Already, Google Now works on an "anticipate and deliver" basis: the technology delivers information that's needed before it's requested. Companies will assist customers as they cross back and forth between physical stores and the online world. Spanish clothing chain Desigual has moved part of the way there, creating flagship stores in Paris and Barcelona that only stock samples — the customer can try on different looks, then purchase the clothes online.

Tomorrow's digital experiences will offer new kinds of value, solving needs that did not exist before in locations that didn't exist before. When driverless cars roam the freeways, cars are no longer just vehicles. Their interiors will be designed to be whatever passengers want, be it a theatre, office or shopping mall on wheels. And who wants digital gift wrap? An MIT startup called "Delightfully" is betting people who give online gift certificates will appreciate it.

The problem for companies is that once customers see something cool, different or better, they expect to see it everywhere. This puts immense pressure on the organization to keep up with the competition while trying to innovate in its own right. It's a digital arms race, and corporate IT and other functions must be battle-ready.

How can companies exploit digital technologies to deliver compelling customer experiences time and again? Executives across the C-suite will need to work together with corporate IT and F.O.C.U.S.:

       Frame strategy based on a new model of customer interaction. Traditional customer acquisition strategies won't work because the path to purchase is no longer linear. Customers now find, evaluate, discuss and buy products nonstop, bounce from one stage to another. A complaint on Facebook or a recommendation on a fan's web site can hasten or redirect a purchase. This upheaval requires a new way of thinking that spans the physical and digital worlds.

       Optimize marketing efforts to achieve influence at scale. Word of mouth still influences purchasing behavior. Only now, social networks increase that circle from a few trusted friends and family to hundreds of people online. By studying what customers do with social media, and identifying their sharing patterns, companies can provide attractive online social content at the right time to the right people.

       Create new digital experiences by adopting Silicon Valley's approach to innovation. The tech staff at companies like Google, Facebook and LinkedIn use agile, iterative development techniques to deliver improvements fast. They quickly test new services and features with actual customers and data. And by tapping crowdsourcing and open source communities, they bring more ideas to the table and turn them into products fast.

       Use in-depth analytics to understand customers better. Creating digital experiences built on cloud and analytics will rewrite how marketing and sales teams work and break down internal silos. For example, when companies capture and analyze their customers' interests, and integrate it with data from other sources, marketers and developers can better predict and influence consumer behaviors and deliver more personalized experiences. Social media and marketing data can also be integrated with warranty data and post sales and service feedback.

       Set up enterprise IT that can design, build and run digital experiences. The bottom line for CIOs: to serve the accelerating demands of digital customers, IT organizations will have to behave more like Amazon or Google, and less like their traditional competitors. Legacy systems often prevent it. They are unable to manage unstructured or non-numeric data, or too inflexible to develop new features at Valley-like speed. But that won't be acceptable to other executives. They will wonder why their IT organization can't be more like Facebook's "hackers" and make thousands of bug fixes, improvements and new features each week. For corporate IT to remain relevant, it must get its house in order now or risk irrelevance. If rethinking corporate IT leads to a fresh start for corporate IT, so be it. The business side cannot afford to wait while today's customers tweet, like and yelp.

posted by Bhavesh Jhaveri  # 12:27 PM