BP Group recently published a ‘Moments of Truth’ toolkit.  In it, they identify the five steps to winning the Triple Crown [reduced costs, increased revenues and improved customer interactions].

Step 1) Identify your goal.  They point out that the overall goal is to improve customer satisfaction.

Step 2) Identify your target area.  The target is the area that we are seeking to improve.

Step 3) Identify your moments of truth.  Moments of truth happen when your internal processes touch the customer.

Step 4) Blink your analysis.  I am interpreting this as a brain dump of all of your ideas.

Step 5) Describe your actions.  Identify the actions that you need to take to achieve your stated goal.

Their conclusion: Although companies have been investing record amounts of money in traditional process improvement approaches, such as Six Sigma and Lean and in general service quality improvements, most of these initiatives end in disappointment.  What’s regularly missing, in our experience, is the ‘outside-in’ perspective that sparks between the customer and frontline staff members – the spark that helps transform wary or skeptical people into strong and committed customers.

Utilizing moments of truth to identify and reengineer all customer interactions produces immediate and sustainable benefits for all – the customer, the staff and the shareholders.

Our Thoughts…

Several articles have pointed out that satisfied customers are not going to be enough – they claim that you need ecstatic customers.  Their thinking is that a satisfied customer will not necessarily be touting your company to others, but an ecstatic customer will.  A satisfied customer might be taken away from you, but an ecstatic customer will not.  So, how do you create ecstatic customers?

Let’s look at an example we all know - NetFlix.  Blockbuster owned the DVD rental business.  NetFlix decided to provide DVD’s by mail [eventually over the internet].  They paid attention to customer satisfaction – the customer came first.  While Blockbuster is bigger, they got into that market late.  To this day, they still charge late fees.  Today, NetFlix is the leader because they really know how to take care of their customer.  Blockbuster will have a difficult time overtaking NetFlix and likely never will.

Many companies look to improve their internal processes, but how many focus on the processes that interact with their customer?  If one of your goals is to have ecstatic customers, then these processes need some attention.

From the IQPC Customer Experience Summit later this month - ‘A customer experience is an interaction between an organization and a customer’.  It is a blend of an organization’s physical performance (product, price, delivery), the emotions evoked, each intuitively measured against customer expectations across all moments of contact…  Over 50% of a customer experience is how you feel.  It’s not just about the what, it’s the how’.  

In summary, the challenge we all face in today’s economic climate is that some companies will fail, some will just get by and a few will do really well – Where will your company and mine end up?

Your Thoughts…

IBM Global Business Services View

There are more forces pushing on businesses than just the economy.  Businesses are facing more difficult credit issues; the explosion of information; globalization of suppliers and customers; and new customer demands.

Cost Management will not be enough, they will need to:

1) Focus on Value

Do more with less –
Focus on Core Competencies –
Re-align Relationships for Efficiency – Partner extensively and enter new markets

2) Exploit Opportunities

Capture Market Share –
Build Future Capabilities –
Change Your Industry – Double down in growth markets

3) Act with Speed

Risk and Transparency – Make use of business analytics to make decisions
Leadership –
Manage Change – Set targets and measure your success

It is all about Smarter Business Outcomes – Reduced Costs; Increased Revenues; and Improved Customer Service.

Our Thoughts…

This appears to be IBM’s answer to ‘Never Waste a Good Crisis.’

They are using different words to address cutting costs, increasing revenues, and improving customer service [the Triple Crown].  They have put forward elements of a plan and we all need a plan.  This may be a good place to start in building your own plan.

They do make some important points…

Focus on Core Competencies – all too often, companies will spend efforts that are not among their core competencies.  In the past, Sun, HP and IBM all made their own microprocessors [building chips and writing software to run on them] and today they are all moving to Intel.  A bank will have their IT departments write software when there are commercially off the shelf solutions available.  Companies really need to focus on their core competencies and farm out the ‘noise’.

Change Your Industry – they suggest to ‘double down’ in growth markets.  Now is the time to attack growth markets.  This is an example of the all too obvious:  Find out what people want and give it to them.

The common thread through the entire plan is efficiency.  The goal of six sigma programs and lean manufacturing is efficiency.  Your biggest gains in efficiency will be made through business process management.  Process improvements, if done right, can have a big impact on cutting costs.  Process improvements with customer focus can have a big impact on increasing revenues and improving customer service.

The current economy will create some losers, some middle of the road companies and it will create some winners.  The challenge – Companies need a plan to become one of the winners.  They need to throw some innovation at the problem.  And, they need to start becoming that winner.  The sooner the better…

Your thoughts…

See previous blog for the background to this blog...

A response from Terry Schurter, Director of International Process and Performance Institute…

The opportunity here is far greater than even your insightful (but modest) article presents...
It all starts with one basic premise. Process improvement, when done right, Reduces Costs, Enhances Service (to the customer) and these two things combine to Increase Revenues.
Let's look at that again. Regardless of what our motivation is to improve our business processes, when we do so by eliminating the very causes of work (the right way to improve process), we eliminate internal hand-offs, non value-add work, and extraneous customer touch points that are such a huge source of customer dissatisfaction.

That means it costs less for us to do the work we normally do and there are fewer places for deviations to occur that negatively affect our customers.

So if we can decrease our costs and increase our customer satisfaction level by doing so - why wouldn't we do that? Why wouldn't we do that every place we can, regardless of economic conditions? Why wouldn't we do that when our competitors aren't doing it, and give ourselves significant competitive differentiation?

What the economic conditions should be telling us is that what we are investing in now is not what we should be investing in (its why we are here), that keeping our customers is more important now than ever, and that taking steps to improve our customers' satisfaction level while reducing our costs of doing business (at the same time, with the same actions/investment) is the one thing we can't afford not to do.

Or we can crush budgets, make everyone miserable with restrictive policies, trigger widespread frustration by dumping the burden on employees already over-worked, and moan and groan about the wicked trick fate has played on us.

Not a hard decision from where I'm sitting...

Our Thoughts…

I think that this response takes my ‘Ideas’ for cost cutting from last week to its logical conclusion.

I think this says it all and says it simply – ‘Process improvement, when done right, Reduces Costs, Enhances Service (to the customer) and these two things combine to Increase Revenues’.

Your Thoughts…

I would really like to see your thoughts on this topic.

You are looking to solve a business problem. You have determined that there are software alternatives that will reduce or solve the problem. Often, you will discover a couple different approaches to solving that problem - Software Suites/Platforms vs. a Complete Solution.

An enterprise BPM suite or platform will be sold in modules. The most common modules include: Process modeling, Process [business rule] engine, Process analysis tools, Process simulation and an Integration server [or toolkit, or…]. Each of these modules are sold separately and may require some integration to get them all to work together.

A complete solution is just that – you purchase one piece of software that has some or all of the elements of each of the modules [identified above] built in.

Our Thoughts...

The enterprise BPM suite or platform approach…

The decision to sell the software by modules is a marketing decision. They hope to gather more revenue from their customer by selling the software in pieces. These more expensive suites or platforms may have more features than the alternative – as a matter of fact; they may have features that you will never need to use. Often, getting all of these modules to work together will require some software services.

If you haven’t noticed, the companies selling modules will also have a large professional services organization.

A complete solution…

Selling a complete solution is also a marketing decision – they target a specific market. They intend to service their specific market particularly well so that they can dominate their space. Their software will include all of the features necessary to create an application that will put them on top.

So, you have to decide…

You could go with SAP or Oracle, for example, and spend big bucks now to solve a not so expensive problem. The upside - this may enable you to solve other business problems in the future; The downside – it does lock you into purchasing lots of software services.
Or, you can go with a complete solution today that will solve your problems rather inexpensively. The upside – the solution is less expensive and the solution will be implemented sooner; The downside – you may have to buy more software in the future.

Your Thoughts...

Since we made a marketing decision to be a complete solution, I am very interested in your thoughts…

Forrester recently interviewed 164 IT Architects – some of the results follow…

13% said that they had no plans for implementing BPM. The primary reasons were: high project costs; lack of proven benefits; lack of technical resources; and the complexity of the project.

The 87% that are implementing BPM expected: increased productivity for process workers; real time visibility into key processes; consistent process execution across business units; and optimization of their business processes.

As a result of their interviews, Forrester noticed a strong correlation between a BPM Center of Excellence and BPM project success. The premise – if senior management is willing to support a BPM Center of Excellence, then they are definitely supporting this BPM effort.

Our Thoughts…

Regarding those not implementing BPM – I have talked with many companies that have reflected those same findings. I have seen project costs and lack of technical resources as the biggest obstacles.

Regarding expectations – I see these expectations as the reasons companies buy into BPM to begin with. If you didn’t believe your process cycles take too long, you wouldn’t be looking into BPM. The 2 biggest elements of shortening cycle times are to control how long process steps take and to have visibility into the process to see that it is on time. If the process is late, you will be able to quickly see that fact and make resource adjustments.

A key requirement for the success of any large enterprise solution is management support. I am not convinced that a BPM Center of Excellence is the way to go, but I am convinced that you need management support. So, you know your company – choose a path that will garner management support.

Your Thoughts…