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This is the third installment of a three-part series on IT business services development and the business value of IT. In this tip, Niel Nickolaisen, CIO and vice president of strategic planning at Headwaters Inc., talks about his misfires and direct hits when he develops new services for the business -- talking to customers is among the critical success factors in the process.
In the first installment of this series, CIOs shared their IT business services development strategies, and the ways these services boosted revenue and built stronger relationships with customers. In the series' second installment, CIOs tackled the services creation stage with a mix of old and new development techniques.
Even though I'm an "IT guy," I sometimes have what I think are great business service ideas.
Admittedly, some of these business service ideas don't turn out quite the way I think they should. For example, many years ago, I worked as CIO for a consumer packaged-goods company. One of this company's struggling segments was the "high-income male" category. I had the brilliant idea to replicate Willy Wonka's Golden Ticket promotion by slipping invitations to the Masters Golf Tournament inside a few packages containing a product for a high-income male. My less-enlightened marketing counterparts scoffed at the idea, but I persisted. It took some doing, but they finally came around to thinking giving out Golden Tickets to the Masters was actually a good idea. We printed up six Golden Tickets, put each one into a package containing a product designed for a high-income male, and waited for sales to climb. And waited. And waited . . .
The promotion never caught on, and the Golden Tickets had absolutely no effect on sales. Of the six packages with the Golden Tickets inside, only one was sold. A couple of years later, the company abandoned the "high-income male" category.
To balance such failures, some of my great business service ideas actually panned out. A few years ago, I had what I thought was a guaranteed way to boost market share in our business that provides materials to the commercial construction industry. During one of my visits, I saw how difficult it was for our commercial construction customers to schedule what they needed from us. Because their schedules were so fluid -- a job might be delayed because of rain, or might be accelerated when a permit came through early or might change due to a ripple effect from a subcontractor -- they were constantly canceling and replacing their orders to us. Without these changes, our shipments might arrive too early to be used, or so late that their crews were wasting their time waiting.
My business service idea was to design, develop and deploy a customer self-scheduling system that would allow our customers to separate ordering from scheduling. Once they placed an order, they could adjust the delivery date merely by updating their schedule using the new system. I figured this approach would make it so easy and simple for our customers to do business with us that they would decide to do business with only us. This new IT business services system would let us take market share from our less-brilliant competitors. My less-enlightened business counterparts scoffed at my idea, but I persisted and they finally came around.
We worked with a pilot customer to design, develop and test the self-scheduling system. The result? It worked as advertised, the pilot customer was ecstatic, and we quickly rolled out the system to our other customers and gained remarkable market share.
As I think back to what made the difference between the business service ideas that succeeded and those that failed, I detect at least three critical success factors:
Listen to the voice of the customer. The idea for the self-scheduling system grew out of an effort to solve a customer problem. I learned about the problem by spending time in our customers' world. I walked about 100 yards in their shoes. Once I understood their process issues, potential business service solutions became clear. I have found that listening works equally well for internal and external customers. I like to send my staff to spend "days in the life" of our internal business customers. There is astonishing value in working in the distribution center, participating in the financial close process, taking a few shifts in a retail store and working on the customer service line. The context we get from these experiences allows our really smart IT people to create brilliant business -- not technology -- ideas.
More from The Real Niel
Be a credible business leader. Imagine the following scenario: I go to the controller with an unbelievably good idea for optimizing the financial close process. As I explain my idea, the controller recalls that our business systems are down for an average of eight hours a month. Not only that, the email system has been up and down all day. Do you think the controller will give my idea much attention? He'll probably think I should first make sure that my technology works before I begin considering how to improve one of his processes.
As IT leaders, we must get our IT house in order before we can hope to share our good business service ideas with others. A friend of mine is the CIO at a large e-tailer. During the past few years, she has delivered great idea after great idea about using technology to improve operations, customer service and sales. When she was first hired, however, she inherited a poorly performing IT department. So, she spent a year improving IT processes and developing internal credibility before she strayed outside IT and shared her ideas.
Remember, it's not about the technology. Technology is an enabler; it should not be the primary objective of our business service ideas. In my example, the self-scheduling system was a technology means to a business end -- giving our customers the ability to revise their schedules easily. As technologists, often our first reaction is to think in terms of technologies. I have found our ideas are much better if we first think in terms of customers, adding value and improving processes.
IT leaders are uniquely qualified to generate great business service ideas because the nature of our job is to think horizontally about business and customer processes. This horizontal perspective allows us to understand cause-and-effect relationships and think of ways to make them better. By looking at the world through the eyes of our customers, gaining credibility and choosing process over technology, we become fully participating members of the leadership team.
Niel Nickolaisen is CIO at Western Governors University in Salt Lake City. He is a frequent speaker, presenter and writer on IT's dual role enabling strategy and delivering operational excellence. Write to him at email@example.com.
This was first published in August 2010