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Integrating systems of record and systems of engagement

As cloud, mobile, social and big data technologies continue to make their way into businesses both big and small, CIOs are looking to business process management principles to improve customer-facing processes, first by understanding which of three value disciplines -- operational excellence, product leadership or customer intimacy -- is most important to a company and then setting a plan to reflect that value in business operations.

In this webcast presentation, Ken Lewis, ITIL consultant at PA Consulting, suggested that companies can straddle two of the three value disciplines at the same time. And he discussed how value discipline choice impacts a company's IT systems and points toward a cloud-based future in which systems of record are integrated with systems of engagement.

See other excerpts from this webcast presentation

Part 1: Value disciplines; operational excellence

Part 2: Second value discipline: Product/service leadership

Part 3: Third value discipline: Customer intimacy

Editor's note: The following is a transcript of the fourth of four excerpts of Lewis' webcast presentation on business process management for business outcomes. It has been edited for clarity and length.

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Transcript - Integrating systems of record and systems of engagement

Ken Lewis: There's a trend where market leaders typically excel in one [value discipline]. … There are a few companies now, I think, that are starting to do two of the three [value disciplines] at a high level. … I'm not sure anybody out there is [doing] all three … at a high level.

I mentioned Apple. It used to be [focused only on] product leadership. But the fact is they introduced the Apple Store and … at the back of it, you have the expert desk, where you go to an Apple Store, they have one on one, face to face [service, where they] walk you through it and try a solution to your problem. It tends to be one of the busiest stores. I can say, again, from personal experience, walking into a store on a Tuesday afternoon in the mall in the remote area of the United States and you'd think it would be kind of empty like the rest of the place. Well, it was the busiest store in the whole mall. There were people in there talking to other users at the same time.

They created a space [where] not only [were] they intimate with the customer, but other customers [brought] that kind of collective intimacy. Apple, I think, is moving from that product leadership side where design and flare is [where] they lead; they're bringing in now the customer intimate space.

Toyota … was [a classic example of] operational excellence. They used the lean principles and they have a book called "The Toyota [Way]." But they're now driving ahead with the Prius and other vehicles, so they're becoming a product leader company as well. Now I'll remind you that these two different vectors have slightly different process goals.

So, it is a challenge. It just comes down to setting what the particular process discipline or, I should say, proposition is somewhere along the lines of your marketing circle. Where do you want to have operational excellence versus customer intimacy? I think you could pick along that lifecycle one or two that could be a little bit more intimate versus being a little bit more excellent and efficient with less friction. That's where you see companies start to tailor these three different propositions, specifically to the process they're looking for.

For IT, as I speak to CIOs and senior managers, what does this mean to the IT systems? In the past, we have had systems of record -- ERP systems, MRP systems, collections of application portfolios that support the business in its business-as-usual environment: general ledger and the like.

On the other side, there has always been the systems of engagement, the customer-facing spaces, the catalog, the intake … how do you take orders? As we said before, the means of delivering technology or the engagement of people … tends to lag behind the technology that's out there. But as things start to catch up -- the customer is now demanding much more of a say [in] what they want to see and how they want to engage -- I see these particular systems and the data that's between them [are] becoming more and more integrated and [have] to flow with each other [and] go back and forth with less friction.

I see in the future, using the cloud … will now support the fact that you have to integrate those back-end systems of record with the systems of engagement to start to integrate informational delivery, setup,  pay, sales, CRM product, product design, marketing and ledgers, renewals and contracts and service management -- dealing with product returns and complaints and feedback.

You will be putting in systems. It may be doing dual purpose. One firm I know of, when they went out to purchase a service management product for the internal use of their IT organization, looked at the product and said, "Gee, we could use this for external help desk for our servicing of our product."

In other words, they leveraged the purchase of that product for outward facing as well as inward facing. In the world of digital products, the management of digital products now almost has to become the domain of the internal IT organization to make sure it is protected and it has integrity before it gets delivered to the customer, anything from electronic maps or photos to music or even movies, for that matter.

This integration, the utility computing and using the cloud -- the utility out there to help integrate these processes -- is going to be very important in the future, especially with these value propositions that are starting to change.

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