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Rethinking Business Processes

Process Mapping is generally seen as a laborious exercise in workflow mapping that is supposed to add value by helping improve business processes. Once the As-Is model has been mapped with sufficient and just enough detail, the analysts are supposed to find ‘obvious’ areas for improvement and can then triumphantly arrive at an obviously improved To-Be process model.

This approach may be adequate for incremental workflow improvement but does not address good design for a business process.

The reason a process exists is because it adds value to the customer. Otherwise the process shouldn’t exist. This is the golden rule for good Business Process Design.

James Martin and Michael Porter have been expounding on the central principle of value creation for the past few years with the Value Steam approaches.  Recently Ralph Whittle reviewed the background and presented Enterprise Business Architecture as the overarching concept to capture the value-driven approach.

Given that (value-driven) process design is the core of any successful organization, I am a little concerned to find Graham Hill bidding good-bye to Process Thinking and welcoming Design Thinking as a replacement.

It may be that his use of the word ‘design’ in this fashion is too generic. A good DESIGN will bring user-centric interface design, user-friendly information architecture and customer-value-driven business processes together into a rewarding experience for the customer - and a profitable transaction for the business. Process thinking (from a customer’s  viewpoint) is key.

Incremental workflow improvements in the guise of process management are ineffective unless they rest on solid business processes built after asking, “Does this add value to the customer?”

Posted in Design, Process. Tagged with , , , , , .

Generating Ideas from ‘Crowds’? Really?

Ever been in one of those brainstorming workshops with lunch provided, staring at a blank whiteboard with a ‘facilitator’ exhorting everyone not to be bashful and to think outside the box.

Thinking ‘outside the box’ is the romantic ideal of creativity, but the brutal truth is that there ALWAYS is a ‘box’ that defines at the very least the goal of creative thought - and in most cases - a variety of constraints that need to be respected on the way to creative nirvana. Asking people to think and to begin with a blank sheet of paper will cause a ‘thinker’s block’ in most cases while the ‘thinker’ works through the goals, constraints and assumptions in his mind. Mark McGuinness has a very interesting experiment on thinking ‘inside the box’. He concludes that

‘Creative freedom’ is usually spoken of as a positive thing - but in this case, having total freedom to write any kind of story they like tends to paralyse people.

So, a successful brainstorming begins with something already on the board. There HAS to be a workshop owner (not just a ‘facilitator’) who brings the framework to the table and has a vested interest in the end-product. All participants should be there for their skills, experience or a ’stakeholder-pass’ - not just to have more ‘heads’ to get to bear on the problem.

The workshop ‘owner’ taps into the entire group - gets them to add more flesh to the framework, validate or repudiate assumptions, extend the concept into the practical execution challenges, push and poke at imagined or defined boundaries and iterate through various cycles of conception to execution to fine tune the solution.

On tools, I prefer mindmaps and structured (lateral) thinking as the two most valuable accelerators for brainstorming.

At the individual level, laying out your ideas on a mindmap is a powerful idea management technique that I can personally attest to as my implementations evolve. It can be scaled up to manage group brainstorming sessions as well  - with similar powerful outputs as Michael Deutch insists.

From a structured thinking perspective, we need to make sure that the discussion has adequate representation of the six color ‘thinking hats’ from Edward de Bono - (Facts, Emotions, Critical-Judgment, Positive-Judgment, Creativity and Big-Picture). I am still trying to digest Jeffrey Phillip’s refreshing new term ‘Elastic Thinking’. More on that later.

Group Brainstorming in itself does not ‘generate ideas’. It helps amplify and sharpen individual thoughts - that need a vehicle for validation and improvement - and an organization framework for implementation.

Posted in People, Process. Tagged with , , , , , .

Dirty Little Secret of Business Rules?

James Taylor is out again revealing secrets. Here is the latest dirty laundry.

Business users don’t want to “maintain rules” any more than they want to “write code”

What they want to do is run their business better……

…..They can’t and don’t want to use the same technology IT does but they can and should be brought into the process. To deliver this requires thought and effort but it will pay off in increased agility, decreased costs and improved precision in decision-making.

I agree with James’ prescriptions on what IT needs to do to make it easier for business users to define business rules that ‘run the business’. The Business Rules Engine interface needs to be intuitive and  familiar;  presented in a business metrics context; allow ‘what-if’ scenario building; and provide audit and governance ‘under the covers’.

The underlying assumption here is that business users do have a reasonably well-defined and agreed-upon decision-making criteria. So when ‘business rules’ need to be built into the ‘business logic’ of a system, the IT team should be able to pick up the binder listing all the rules and start implementing the system. In an Orwellian parallel universe maybe. Not in the real world.

Too frequently the business needs to think through the business processes, objectives, decisions and rules first before any system can be implemented. These rules are again subject to change depending on business direction and market conditions. So IT is increasingly abstracting the business-rules-engine component out of the underlying implementation.

IT can develop and procure Web Services that enable individual business processes - and provide ’switches’ to configure the process and its interaction with other processes. The Business Rules Engine that brings the full value chain together is then the ultimate responsibility for business domain experts within the business.

No matter how dirty, techie, complex or ridiculous the Business Rules Engine is, the business needs to know where the switches are and how to drive. Can the business visualize a Ferrari dashboard or is a Model-T ‘dashboard’ sufficient?

Posted in People, Process. Tagged with , , .

Automating Higher Education ‘Factory’

Kevin Carey has a very thorough review on the state of Higher Education cost structures in the Washington Monthly this month. He showcases innovative uses of technology in lowering costs of lectures - leading to increase in productivity, better grades and lower costs.

The key is letting computers do what they do best—grading multiple-choice tests, providing 24/7 access to text, audio, and video, connecting people to one another at a distance—while retaining the human element when only real people will suffice. The Virginia Tech Math Emporium is staffed twelve hours a day with a combination of upper-division math majors, graduate students, and faculty, each of whom is prepared to help students with any of the Emporium-based courses.

And even when the notoriously nocturnal undergraduate lifestyle puts teachers of any kind out of reach, the Emporium never closes and the computers never sleep. Virginia Tech students always have access to the mind of Michael Williams, the ghost in the Emporium machines.

Kevin goes on to explain why universities are not passing the cost-savings back to students. In fact, tuition costs are rising - with all of the money being spent on ’status-building’ investments in athletics, building, etc in order to boost college ranks on various lists like the one maintained by US News.

Leaving the economics of higher education aside, the technology application is the interesting part. Applying technology in agriculture and manufacturing resulted in phenomenal productivity increases in the past decades. Technology has increased productivity in the so-called Third Wave of Services industry already with communications, collaboration and analytical tools. Even in education, we have plenty of online courses and other technology-enabled initiatives. Moving the boundary well into the hallowed lecture halls on campus is new. Professors are being replaced by intelligent machines! Sounds like a sci-fi movie plot…

You can learn to speak any language you wish on a tape/CD/Computer; Pilots can learn to fly planes using computer simulators; and you can google for any piece of information that you care about on the Internet. So, why do we need Professors for delivery of classes? Let them design new computer courses. They can even design feedback mechanisms into the delivery so that students can provide input for the course to self-correct. Professors can then be free to do original research and expand the frontiers of knowledge.

Machines have taken over the campus. Are you sure your Professor is human?

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Video Games- Beating the Economy

Earlier this year, I discovered that the Gaming industry is well on its way towards overtaking the Movies business.

Video Games are almost 75% the size of the Movies Business! And growing at close to 50% per annum!!……Admittedly, the show biz is a mature industry and is not expected to have a blistering rate of growth - but Gaming almost as large as the entire Movie business?

And now, amid the doom and gloom of slowing economy and stagnant consumer electronics business, the market research specialist NPD Group is reporting

In the U.S., third quarter total industry unit sales grew 8 percent versus 2007, even as the economy showed accelerating signs of recession…… Heading into the critical fourth quarter, the U.S. games industry is on solid ground..

One of the largest companies in the industry, Take-Two

….envisions future revenue for the video game industry, …sees microtransactions and downloadable content as the “biggest opportunity” and calls subscription revenue the “holy grail.”

Meanwhile, Television viewing is moving online in a multiple-viewer, social, ‘gaming’ environment. Jenna Wortham writes on Wired -

As television audiences migrate online, media companies are eyeing social networking as a possible killer app for hooking viewers through their laptops. From simple chat rooms to unique games, the race is on to develop content that complements traditional shows — the more creative and addictive the better.

Then, the Wall Street Journal reports on Gaming coming full circle back to a hand-held device - the iPhone

The iPhone and its sister device the iPod touch, which feature big screens and powerful graphics, are emerging as serious competitors to Nintendo’s DS handheld and Sony’s PlayStation Portable….Developers are being lured by Apple’s online method for delivering games, which has lowered distribution costs and made it possible to profit on games that sell for just a few dollars or are given away with advertising…

So, Games are overtaking Movies…both are moving online along with the TV shows…these are all framed in interactive, social settings…all are available via pay-per-use subscription models…and right on your iPhone. All your entertainment is now in the palm of your hands to be consumed at will.

It’s clear that the ‘game format’ has taken over entertainment and online subscription has eroded purchase thresholds. Economic news and debates do not matter in the pastimes anymore.

Update 11/26/08 - Daniel Terdiman at CNET is also writing about the video game industry being recession-proof despite noting some caveats from Wall Street-types.

Posted in Thoughts. Tagged with , , .

Controlling the Corporate Message? The PR Tight-Rope Walk

So, how do we encourage informal collaboration and communications amongst employees - but still retain some control over the corporate image that will get diffuse without the professional touch of Public Relations and Corporate Communications. The Economist reports -

On October 31st Virgin fired 13 of its cabin crew who had posted derogatory comments about its safety standards and some of its passengers on a Facebook forum. Among other things, crew members joked that some Virgin planes were infested with cockroaches and described customers as “chavs”, a disparaging British term for people with flashy bad taste. On November 3rd BA began investigating the behaviour of several employees who had described some passengers as “smelly” and “annoying” in Facebook postings.

Cracking down on employees in this case may have merit, but this highlights a growing uneasiness in the corporate communications and public relations circles. Where does social networking fit in the corporate world?

If such cases are considered aberrations or problems that need to be ’solved’, then a huge opportunity would be squandered - with little or no chance of the problem going away. With the rise of social networking and associated acceleration in communications, it is very easy to share ideas and influence opinions by aggregating preferences. Everyone has already been ‘networking’ in the real world. It is just that the network is now moving online to a virtual world as well. We can legislate and create procedural and legal barriers asking our staff to ’switch off’ their network for work related items - and invest in a thought police to enforce the rules and punish the guilty. It might work in the short run, but it is a losing battle. Thoughts, ideas, communication and collaboration that could be leveraged for everyone’s benefit will now just be driven deeper underground…. These things cannot be switched off in sentient beings.

The other approach is to consider why we need to control the informal communications. Maybe the ‘official’ corporate image does not match with reality; or maybe the corporate vision and goals have not been communicated to the employees - reflected in daily actions, not just an official scroll; or maybe the leadership is not leading from the front in creating a common vision and in getting constant feedback to keep the vision fresh, current and relevant…or a combination of all that..or..or…

The wall between ‘internal’ communications and ‘corporate’ (external) communications is being chipped down. Why spend resources on shoring up the wall and in crafting the pristine external message and in defending against ‘rogue’ messages? Some of those resources are better spent in creating one consistent message for everyone. Employees are the best brand ambassadors besides being customers too!

Posted in Thoughts, Trends. Tagged with , , , , , , .

Reducing Complexity to Manage Better

Emma Stewart writes today in a Harvard Business Publishing blog about the futility of Scenario Planning exercises, saying that

.. if you want to avoid fixes that fail and move towards sustainability in today’s complex operating environment, I invite you to resist the instinct to resort to scenario exercises, or only do so in conjunction with systems thinking approaches.

I can see her point, but the elaborate systems thinking approach she is referring to does exist already - generally embedded deep into the fabric of any successful organization. The organizational processes and systems are designed and maintained to weather the ‘normal’ levels of complexity. Scenario Planning, on the other hand, tries to peer into the future in order to develop some decision making criteria as and when needed.

Complexity in business and its operating environment is a given constraint in management. Management challenges exist along two completely opposite paradigms.

At one end we need to delve deep into existing complexity - define it and automate the processes and decisions there - so that we are ’shielded’ from the known complexity or the static view. The system or the model works just fine within the frame of its original assumptions. Taken to an extreme, all possible complexity can be modeled given enough time and data.

On the other end is the unknown complexity introduced as soon as we recognize that we live in a real world of dynamic, moving components that can interact with each other in unpredictable ways to create new scenarios. This is where we need to abstract the complexity into simple models like the famous (or infamous) 2×2 matrices. We need to make empirical decisions quickly because the environment is changing at the same time. Decision models need to be simple and adequate - a criteria difficult to achieve, but still better than trying to stop the world while we analyze our way into paralysis.

Good management needs to manage complexity by instituting structure - enough to be affordable - and by developing abstracted, simple decision models - enough to be useful.

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Business Processes and CRM Systems

Ann All is pointing out the convergence between Customer Relationship Management (CRM) systems and Business Process Management (BPM). She writes

Too often CRM is a disjointed mishmash of departmental or divisional activities. CRM touches a number of enterprise systems, including operations, accounting and e-commerce, so companies must make a better effort to integrate their CRM data with these other systems….

Business processes across the enterprise are either directly or tangentially concerned with customer interactions. Since a 360 degree view of the customer is key for managing the relationship, it follows that all processes need to be considered and relevant customer data lined up for the CRM system to be effective.

For organizations used to working with enterprise-class systems like SAP, an integrated process-based approach is easier to visualize and execute. It is the organization with departmental silos that gets attracted to ‘partial’ solutions that address the contact management functions of CRM. Despite the customer being so central to the modern enterprise, customer relationship management questions quickly devolve into the basic question of, “who owns the customer?” Very rarely do all business departments sit together and design a common integrated process focused on the common customer.

A true customer focused organization will need to take an enterprise-wide process view in implementing CRM.

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How to Document & Collaborate with Visual Thinking?

Dan Roam’s new book, ‘The Back of the Napkin’ illustrates the power of visual thinking to solve any problem - individual or organizational, including so-called business problems. The companion website has a very compelling whiteboard presentation on the four steps of visual thinking, the five focusing questions and the six ways we see and show.

Seeing the art of visual thinking framed in a ’scientific’ context is a relief. This is the second big validation I have come across - the first (for me) was Bill Buxton’s book on ‘Sketching User Experiences’. I am a white board junkie and have been known to start arranging paper-clips, coffee-cups and pens in a drawing representation if paper and pen are not handy. I have written about my awe of sketching…and look for ways in which this individual tool can be scaled up beyond a small team into corporate settings. How do you take sketches enterprise wide? Not just as pictures of the whiteboard or screenshots of your doodling on a TabletPC…..but as business documents similar to ones created in  Microsoft Word, Excel, etc…or even Google Documents..where dispersed teams can review, comment and collaborate.

My experiments with Microsoft OneNote, Mindjet MindManager, Google Sketchup and Evernote’s Evernote have been great personal tools and I continue to use them in varying degrees depending on the problem at hand. Some of these tools do allow collaboration and team review….but they are not mainstream yet. I have not been able to scale up the experiments to a point where I can say with confidence that the tool itself will not distract from the goal of visual collaboration.

So, all of my electronic sketches get distributed via PDF to the team…who can mark up a paper-copy and we sit down in a conference room with my electronic sketch displayed on the wall and make changes for everyone. While we are making do with this level of tool sophistication, I am focused now on getting to animated sketches so that a story can be told with higher fidelity….cutting down on misunderstandings and sharpening the follow-up questions that can actually take the analysis or the solution or the execution further along. Animating pictures is now taking me to our Graphic Designers and their Adobe Flash tools, etc. Fun stuff and I like messing around with that when I have time.

But the nagging doubt remains - how do I get visual thinking and sketching into the mainstream?

Posted in Design, Uncategorized.

The ‘Science’ behind Changing Jobs for Better Pay

Leonard Mlodinow writes in a recent article in Forbes about the paradox of Meritocracy.

..one can imagine a more realistic utopia, where people are treated fairly and are compensated according to their skills. A true meritocracy. But there is a lingering problem–How can we tell what a person is really worth?

In today’s economy where knowledge work has overtaken traditional physical work, there is no easy way to count the number of widgets being cranked out to measure worth. For a truly fair world, compensation should be directly tied to value-added. This concept compounds the problem even further because value of an enterprise is not the assets and ‘goodwill’ anymore, but a complex series of judgments made by investors regarding competitive ability, industry positioning, branding, etc. Unfair in some sense but very much real, especially in large businesses where direct contribution to ‘value’ is buried way deep under all the financial consolidations and investor hysteria that makes up the stock market ticker symbol.

So, how does one draw a relationship between an individual’s contribution to the enterprise and the corresponding value-added? One does not even try it! Mlodinov continues to point out that

In business, merit supposedly determines pay. But in fact, it’s often the other way around, with pay determining merit. In controlled studies in which people were assigned random tasks with random pay, psychologists discovered people behave as if the higher-paid individuals have superior ability. And they do so even if they know that the pay scale was arbitrary.

Although Mlodinov does not reach the obvious conclusion in his article, the inescapable message to knowledge workers is that they will be recognized for their pay-scale first and merit second. The incentive for advancement is tied to boosting their pay-scales and not necessarily on adding value to the business. And if the climb through pay scale ladders is slow at the current company, move to another for a ‘fresh start’. Or if the risk is worthwhile, participate in the open market yourself by turning into an independent consultant. We are conditioned to value the recommendation from a $500/hr consultant even though the same recommendation from a $50/hr employee has bounced around without gaining any traction.

The message for businesses is equally clear. To add the greatest value to the business we need a robust and fair mechanism to recognize and reward merit through a visible tie to company performance. The alternate is to try and add value with a mix of (a) pay-scale focussed, unmotivated employees, (b) new employees who have joined to get that pay-scale jump they could not in their old companies, and (c) high-priced, short-term consultants brought in to try and add value using the unmotivated employees mentioned above….or by bringing in even more high-priced, short-term consultants.

Businesses need a core of meritocracy in its Utopian sense, and that core can drive value-addition in the most efficient and sustained fashion.

Posted in Design, Thoughts. Tagged with .

Tales from Two Worlds - On the Same Planet

The Transportation Security Administration (TSA) holds back a passenger carrying the new MacBook Air laptop….not able to believe that it has ‘no hard-drive’.

A Freshman trying to use Facebook for homework study group is facing expulsion.

All these students are scared ….about using Facebook to talk about schoolwork, when actually it’s no different than any study group working together on homework in a library….students argue Facebook groups are simply the new study hall for the wired generation.

But you can interact with a system using touch and gestures on a tabletop rather than keyboard and clicks. Microsoft’s new Surface Technology is coming to Harrah’s Rio Casino in Las Vegas this Spring.

You can also control your iPod with your eyelids now.

Bat an eyelid to replay your favorite iPod tune with a new Japanese remote control that works in the blink of an eye. When a user winks, movement in their skin is detected by sensors clipped to their glasses or headphones…

You can get high-tech from vending machines now. Doug Amath stuck at Dallas Airport ended up taking pictures of vending machines for iPods, Sony, Proactiv and Rent-a-Laptop that dot the airport terminal. We have come a long way from the soda and the chips….

Posted in Thoughts, Travel Tech. Tagged with .

Learning from History

The Economist has a story on why Japan lost the mobile-phone wars to Scandinavia, Korea and others despite having been a pioneer in technology and usage of mobile devices. Japanese players are doing alright within Japan and still provide high-value components like the hard drives and screens from Toshiba - but the mobile world has moved on with other global players in hardware, software and usage.

The analysis on why the Japanese failed has an uncanny correspondence to trends and challenges in Enterprise Business Systems today.

“First, too many Japanese companies make phones. All major electronics firms sell them, mainly as a matter of corporate pride: not to do so would be a sign of weakness. As a result, 11 different domestic makers compete, most of them at a loss.”

Well, too many businesses try to write their own systems from scratch instead of reusing the globs of code written already all over the world. Standards and technology have existed for quite some time now that help put an ‘envelope’ around the code you want to reuse. This allows a black-box approach to ‘composing’ new arrangements of business-models. The value is in how the components are put together - and not always on the individual component.

“Second, Japanese manufacturers concentrated on the domestic market at the expense of global growth. Yet the national business model is unique: mobile operators design the features of the phone, and the manufacturers must comply. So the makers do not have a good understanding of what users want…” 

“Third, the manufacturers designed products around home-grown technical standards and special features that are not used elsewhere. “

This reminds me of IT shops in companies faithfully implementing every single enhancement request from business users without asking the additional questions, “Is this the standard way the industry operates? If not, then does this enhancement give you a unique competitive advantage?” The discussion should focus on reducing total cost of operations of industry-standard ‘utility’ processes and on investing resources in processes that create a competitive edge.

“Fourth, high-end customers who want sophisticated phones drive the Japanese market, but the main growth in the wireless industry overall is in emerging markets, which need cheap phones. The world’s top three makers—Nokia, Samsung and Motorola—focus on this segment.”

This is where the IT groups spend their annual budgets on high-end enterprise systems - ERP’s, CRM’s, SCM’s and similar ‘will fix everything and the kitchen sink’-initiatives. No money left over to analyze and improve the typical users’ workday  -better and more flexible productivity, collaboration and organization tools. No wonder the IT groups within business organizations are facing challenges from ‘mass-market’ technologies like Google Apps, Wordpress blogs, Linked-In Contacts and a variety of desktop and mobile gadgets that help with balancing work and home lives. The tech-savvy, gadget-laden, knowledge-worker - with an equivalent of an IT shop at home - is the new ‘emerging market’.

IT groups supporting business enterprises can add this chapter to their ‘Learning Book’…yet another set of rationale justifying the need to reinvent.

Posted in Thoughts, Trends. Tagged with .

Gamers make the Best Employees

Brent Hutchison John Seely Brown and Douglas Thomas recently wrote on a Harvard Business Review blog about the Gamer Disposition - an attitude and set of traits that are ideal for today’s employees. He writes that

Today’s multiplayer online games are large, complex, constantly evolving social systems. Their perpetual newness is what makes them enticing to players.

The gamers have bottom-line orientation, understand the power of diversity, thrive on change, see learning as fun and pride themselves on discovering radical and innovative solutions. All these together are the perfect buzzwords for a resume or a cover-letter that I want to receive for everyone on my team. In this age of accelerating change, we cannot afford static structures and certainly no team that cannot be nimble and quick at the draw.

After establishing that Gamers have the best traits for being the best employee today, it will be interesting to ponder why that might be so. Interactive games provide a compressed timeline, a clear goal but unstructured and unknown environment - requiring rapid learning, environment scan, evaluation of options and decision making…in order to get rewarded by immediate feedback and hopefully a promotion to the next level!

Looks like getting Gamers to be employees is a great idea, but be prepared to create a challenging and exciting environment for them…or watch them switch to another game.

Posted in Design, Uncategorized. Tagged with .

The New Heroes -The Adaptables

‘Being adaptable’ is one of those backhanded compliments. It can have negative connotations associated with being wishy-washy, spineless, impressionable, naive, crafty, calculating, opportunistic and similar. Despite this the history of civilizations is full of examples where adaptation was critical for survival and for growth.

Adapting and evolving to exploit changes in the environment has now become a business buzzword - being Agile. Definitions of agility can range across the continuum from operational agility to business-model agility. I agree with the latter definition that James Taylor clarified recently.

Agility to us, I think, is a measure of responsiveness to change rather than responsiveness to customers or to orders. It is not the time it takes a company to, for instance, restock a product. While that’s an interesting thing to measure, it is not agility to me. The time it takes a company to change its reorder approach or a specific product/vendor is, however, a measure of agility. 

Being an agile organization requires it to be able to rearrange its people, processes and systems into new configurations at short notice. ‘Composing’ new value chains and business models using existing processes as components is the new competency that sets organizations apart. The new generation systems need to support these process-components in Service Oriented Architectures (SOA). And, we need many more of those ‘multiple-hat’ people who morph among roles like architects, business-analysts, project-managers, designers and customer-advocates.

Those video-game playing, text-messaging, social-networking, hyperactive, mobile, multi-tasking kids - and adults - are perfect for this paradigm. Systems are now available as Services that you plug into as and when needed. Businessweek claimed recently that  you may never buy software (or hardware) again.

No longer do small companies have to spring for servers and IT staff just to get the basics. With software services, you don’t install programs on your own computers or server. Instead, you sign up online for software and use it while you’re connected to the Internet.  

This agile, anything-can-change-at-any-time world needs ‘being adaptable’ in spades. The pace of change is accelerating and business-ecologies are constantly forming, dissolving, splitting, aggregating and reforming in a kaladeoscopic blur.

The Adaptables are center-stage now - as always leading the charge for survival and growth.

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Follow thy Customer

ShopRite grocery stores have just started beaming customized ads to shoppers through their computerized shopping carts - as part of a Microsoft Atlas technology roll-out.

Microsoft will deliver the ads based on data obtained from ShopRite’s customer loyalty cards, according to the companies. When shoppers scan their cards on the computerized shopping carts, they will see ads and promotional offers on the screen based on their purchasing histories.. 

Most retail stores track customers’ path through the store to gauge effectiveness of various displays and product placements - mostly as passive observation to help with merchandising and advertising - and not for personalized sales and advertising. So, this is a proactive move at influencing customer behavior while shopping and not the usual attempt made with discount coupons spewing out of the printer at the checkout lane.

This story reminded me of the sophistication that some Casinos had put into place almost two years ago. At Harrah’s

Gamblers don’t just win money when they play at one of Harrah’s 26 casinos. When they swipe their loyalty cards, they’re also eligible to win a variety of perks, from appetizers to Swedish massages, depending on their level of spending and the information Harrah’s has collected about them. …..Data from low-rollers also convinced Harrah’s to redesign its casino floors to include, for example, a higher percentage of lower denomination slot machines and video poker games—for a 12 percent hike in slot revenues.

Loyalty programs of various kinds need not be just a mechanism to track and reward repeat customers. If technology is used appropriately, a loyal customer can now be tracked through the shopping experience and also through the service delivery experience. A very comprehensive set of data can then be collected at that micro-level of interaction - analyzed at an aggregate - allowing new products, services, marketing and attention to be delivered seamlessly back to the customer at the individual level.

Customer and Seller can now be engaged in a longer relationship, learning from each other and helping each other be more efficient, effective and profitable.

Posted in Design, Uncategorized. Tagged with .


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