Putting the Customer at the Heart of Your Operations
If the last few years have told us anything, it’s that the old adage that the customer is always right still holds true. Indeed, it might be truer than ever. Those organizations that are winning in their markets today are the one that have perfected the customer experience and those that have neglected it are being left behind.
This renewed focus on the customer owes much to advances in technology, access to which is changing all aspects of business – shaping growth, lowering the barriers to entry to new markets and enabling the development of new business models and services. The net result is unprecedented levels of disruption and competition, putting new power in the hands of the customer. If customers don’t like the service they receive, they can simply vote with their feet go elsewhere.
Witness the current trailblazers of the new application-driven economy – companies like Uber, Airbnb, Netflix and Amazon. They are all from different walks of life but have all successfully – and drastically – disrupted their markets and have done so by using technology to put the customer experience at the heart of their operations.
But it’s important to note that it’s not just the new players that are constantly transforming their operations to become more customer-centric; more established organizations are reengineering their business models to better serve the needs of their customers and enable them to consume their services in the ways that they want to.
Unfortunately, the path to becoming more customer-centric for established businesses is not without its challenges, and legacy technology presents a major stumbling block.
The legacy problem
Increasingly, technology and how well it performs is the key determinant of a business’s success or failure, and business leaders have taken note. Take Delta Airlines as a prime example. Following a technical glitch at the airline last August, which led to 2,300 flight cancellations, frustrated passengers and a nosedive in profit forecasts, its CFO, Paul Jacobson, said that it was as much of a “technology company… as an industrial transportation company” and needed to act as such.
That kind of statement several years ago would have been unheard of, but we’ve seen similar statements made from organizations of all sectors, from finance and manufacturing to retail and charity. Every business is a software business and depends upon technology to succeed, even if some business leaders haven’t quite worked that out yet.
The Delta case is an interesting one and one that many IT leaders will be able to sympathize with. The root cause of the airline’s troubles? Legacy IT – a 22-year-old piece of kit that caught fire and knocked out its backups systems, to be precise. And while it is an extreme example of the havoc that legacy IT can wreak, CIOs battle with its effects on a daily basis.
CIOs across the board are trying to reduce costs while delivering more value and a better experience for their customers, but despite their best intentions, many CIOs’ transformation efforts are being stymied by legacy IT. Research by analyst house Forrester in 2013 found that, on average, IT leaders spent almost three quarters (72 per cent) of their budgets simply keeping the lights on, leaving few resources to put towards new initiatives.
Fragmented IT infrastructures, consisting of a hotchpotch of old mainframes, databases, languages and servers are all too common, increasingly costly and difficult to maintain and put the brakes on innovation. How can you focus on the customer experience when most of your time and resources is being spent on keeping things up and running?
Inflexible and burdensome service contracts a further issue. In uncertain times, it’s important that CIOs have the freedom to react to changing market conditions, flexing services up and down as required. But, increasingly, it’s clear that the services offered by some of the incumbent large IT providers, such as Oracle, aren’t compatible with the new ways of working, with many organizations forced to pay over the odds for services and licenses they don’t even need.
The way forward
In this new customer-centric world, agility and flexibility are the orders of the day, and finding a way to embed these attributes in an organization’s technology should be a priority. With the move towards digital transformation speeding up within many organizations looking to achieve business agility, there is a growing realization that it can only be achieved by speeding up the delivery of infrastructure and application services. And in many cases, that means near total data center refreshes. It is the only way to embrace agile deployment models for rapid time to market and to eliminate IT bottlenecks.
What better time is it to consider not just the hardware lying around the data center consuming vast amounts of space and power, but also to really start looking at the total cost of ownership in relation to your software apps as well. And there is no better place than to take a forensic look at the total cost of ownership of your existing, legacy database.