The gap between the modern business model and the way we try to manage it grows every day.
In many industries, customers can directly access systems within the companies they do business with. Think of Internet banking or online check-in for air travel. Processes like these save the organization money, while ensuring high data quality. They also strengthen the value proposition for many customers. Some companies combine this model of customer self-service with mass customization so that every transaction is tailored to the buyer's specific needs.
Recently, a $3,000 customer self-service transaction via my company's online shopping cart was questioned by the Fraud Dept. of National Processing Company (NPC) of Houston, TX our merchant services firm. NPC was told by our company that the transaction was valid and yet their Fraud Dept. representative telephoned the customer in China, at 3AM local time, and received confirmation from the customer that the transaction was valid. Then NPC requested that our company fax them a copy of the invoice for this transaction. We told the NPC representative that this was a self-service online transaction via our shopping cart and therefore there was no invoice...only a computer produced acceptance of the order via the shopping cart. NPC then requested that our company credit the customer for this online order...requiring the customer to resubmit the order a few days later. This is an excellent example of how third-generation strategies can't thrive in second-generation organizations like NPC with first-generation management.
The intent is that customers are effectively running my organization's processes. They choose which contact channel is used, and they take advantage of that channel at whatever moment is most convenient for them. There is no longer any difference between the front office and the back office; systems are meant to be integrated and transparent to the customer. Doing business is a process of continuous interaction and collaboration.
Within transactional relationships, transparency consists of the exchange of operational and financial information, derived from the flow of transactions. Operational information typically comprises data on the status of transactions--for instance, tracking within logistical environments or monitoring the approval status of transactions with the back office. Financial information typically consists of ordering and payment information.
Many decisions that significantly impact business performance are made outside the organization's walls. Insurance policies are often sold via associated banks or intermediaries; these organizations drive the insurer's sales. Likewise, customer service is often outsourced to contractors, who have a large impact on customer satisfaction. And the challenge of improving process efficiency to drive margins spans the complete value chain. Performance management initiatives that concentrate on performance within the corporate entity, based on an old-fashioned notion of the organization, usually come up short.
In today's global economy, business success is achieved through communication and collaboration. Information is an asset that a company must deploy and optimize within its relationships in the same way it uses assets like capital and materials. Collaboration is impossible without information exchange. Therefore, business partners must share information to optimize relationships, knowledge transfer, and traffic of their other assets. The efficient sharing of information in a performance network enables stakeholders to identify opportunities and bottlenecks in the network and to move from suboptimization to optimization.
Source: Business Performance Management, www.bpmmag.net March 2009