Driving growth through serving empowered customers: The need for an enhanced customer experience

© 2013 IBM Corporation

Driving growth through serving empowered customersThe need for an enhanced customer experience

Shubham Jain, Vijay Pandiarajan, Connie Blauwkamp

September, 2013


To differentiate, COOs need to serve a customer experience that is relevant, consistent everywhere, and served in near real time

In an age of empowered, digitally savvy customers, the COOs are being called upon to help drive top-line growth for their organizations

To do so, COOs must instill customer-centricity within the organization as a way to differentiate in the marketplace.

While efficiency has a critical role to play in achieving a great customer experience, it is not always enough.

COOs must transform processes to provide a simple and flawless customer experience by serving individual customers across diverse markets. The customer experience should be relevant, consistent everywhere, and served in near real time

Many COOs are using emerging technologies, such as mobile, analytics, social, cloud and intelligent business automation, to help drive this reinvention.

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Note: Methodology consisted of 60-minute in-depth telephone interviews with 50 senior Operations executives in selected countries and industries.

Country coverage: US, UK, DE, CN, AU, BR; Industry coverage: Healthcare, Banking/Financial Services, Insurance, Energy/Utilities, Travel/Transportation, Telco, plus a small portion (~20%) from other industries; Company size: Primarily Large Enterprises (1000+ employees) (85%); upper Mid-Market (500-999 employees) (~15%)

Throughout the study, use of the term ‘COO’ refers to senior operations leaders, for example, Senior Vice President of Operations, General Manager of Operations, Chief Operations Officer, Director of Operations, Head of Operations etc.

Source: IBM Center for Applied Insights

Executive Summary


Customers are demanding better experiences. The C-suite knows a superior customer experience is key to driving top-line growth

80% of consumers are more likely to recommend a brand because it provides a simpler experience1

99% of CIOs with mandates to transform the business are looking to drive better processes2

According to a survey of more than 1,700 CEOs, the top leadership trait needed in this period of rapid, disruptive change is customer obsession.3

“In our industry, clients are becoming far more interested in operations. They want to know how things work - not just our investment management style. How we operate is increasingly fundamental to top-line growth.” - Head of Operations, UK, Financial Markets

“The perception of Operations has changed pretty significantly over the past few years. Historically, it was oriented around bottom-line efficiencies. Now, when there's an executive-level discussion about increasing top-line revenue, Operations is always at the table.”- Director of Operations, UK, Financial Markets

Much of this process transformation is falling on the shoulders of the COO. The COO is increasingly involved in driving strategic initiatives to meet the top-line growth objectives

Sources: 1)Global Brand Simplicity Index, 2012, Siegel and Gale; 2)IBM Global CIO study, 2011; 3)IBM Global CEO study, 20123Source: IBM Center for Applied Insights

Findings


For example, in the Financial Markets industry, COOs are increasingly involved in strategic initiatives to meet top-line growth objectives

Insights from a financial markets Operating Model Evolution study

The COO is increasingly involved in strategic initiatives to meet top-line growth objectives– 62% of operations leaders believe the COO is becoming a true business partner in

driving strategic change– 58% of operations leaders strongly agree that the COO is driving benefits beyond cost

savings

The quality of a firm’s operations staff is also critically important– In organizations where the COO drives change, agility and innovation, 73% agree that

operations staff can differentiate the firm in the minds of their customers

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“From an operational perspective, we’re bringing platforms together and building a system that can move as quickly as our clients want to move.”

- Operations Vice-President, Broker-Dealer, UK

"The better/more efficient our operations are, the more customized products can be offered; this will allow us to differentiate. “

- COO, US


Note: To understand how operations within financial markets firms are changing, IBM in collaboration with Broadridge Financial Solutions surveyed 133 operations strategy decision makers across the US, UK, Singapore and Hong Kong in the year 2012

Findings


To differentiate, it's becoming increasingly critical to understand individual customers and serve them with great experiences

“We aim for a perfect customer experience, because it only takes one bad experience to impact a dozen customers, especially in the wealth management area.” -US, VP of IT, Financial Markets, IBM Broadridge Operating Model Evolution Survey

“Consumers are more discerning these days. They compare hospitals; they don't just go where they're told. And if they have a bad experience, they won't come back.”

-COO, US, Healthcare

Differentiating experiences

Depends on understanding and serving individual customers

“In investment banking, operations can be a key client service differentiator. Good architecture, good systems and good levels of automation enable good client service - which, in turn, helps generate revenue further upstream.”

- Director of Operations, UK, Financial Markets

“Putting the customer at the center of our operations is causing a cultural shift. We used to talk about 'internal' and 'external' customers, but now we all focus on the person with the wallet.”

- Manager, Quality Assurance, AU, Financial Markets

5 Source: IBM Center for Applied Insights

Findings


Efficiency has a critical role to play in improving the customer experience, but it is not always enough.

6 Source: IBM Center for Applied Insights

Customer-centric business operations can help achieve much needed top-line growth

Efficiency helps drive quality and continuous improvement, but customer acquisition and retention are not possible through efficiency alone

“It’s really a combination of trying to grow business, trying to do it with service excellence and quality, and trying to reduce costs where you can.” - COO, US, Healthcare

“If you look at only one side of the business - claims or underwriting - or only efficiency or just processes, there is a danger that you lose the holistic approach.” -COO, Germany, Insurance

Findings


Processes should provide a customer experience that is relevant, consistent everywhere, and served in near real time

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Operations need to simplify the end to end customer experience and deliver customized products and services across a variety of channels that leverage mobile, social, cloud and big data


Findings


Instant – Processes need higher levels of automation to serve customers in near real time

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• “Occurrence of service issues don't necessarily determine customer loyalty. It’s how fast and how well you fix the problem.” (Director of Operations, UK, Financial Markets)

• “Innovation is often about agility and speed. We have clients that want everything to be confirmed within 20 minutes of trade completion.” (SG, Chief Customer Officer, Financial Markets, IBM Broadridge Operating Model Evolution Survey)

• “There's a growing recognition among senior management that Operations can make a significant difference in how we deliver products. For example, streamlining the consumer loan application and underwriting process means it's faster for someone to apply, be approved and actually close on a loan.” (Director of Operations, US, Financial Markets)


Findings


Seamless – Processes, data and systems need better integration to provide consistent, high-quality experiences across channels

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• “We're working to improve the bill and pay component of the customer experience. Presenting one consistent face to the customer includes producing a single bill, rather than billing from three or four different systems. Customers also expect cross-product discounting. But when you don’t bill in a single system, that’s hard to provide.” (SVP/VP of Operations, US, Telco)

• “Customers expect every company to offer services like Amazon and Google. They say ‘I want to know where my order is' and 'I want to see my bill in real time,’ which puts pressure on our systems and operations. Even though we’re in a very regulated, controlled market, our objective is to provide the same service level as these companies - because that’s what we get compared with, both by internal staff and customers.” (Head of IT and Business Solutions, UK, Energy/Utility)

• “Think about how integrated your credit report is - information from various credit cards, your bank, mortgage, all in one location. It's somewhat shameful that we can’t do the same thing with your health information - but we're moving in that direction.” (COO, US, Healthcare)


Findings


Insightful – Processes need analytics-driven insights put in context to engage individual customers in relevant ways

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• “With the right visibility - having the full set of customer information on the screen in front of us - we could cross sell or provide that customer with the services he's missing. But we don't have that view right now.” (Manager Quality Assurance, AU, Financial Markets)

• “Through speech analytics software, we can pick up key themes in the conversations between our agents and our customers. This provides intelligent customer feedback we can use.” (Head of Business Services and Strategy, UK, Energy/Utility)

• “We’re doing quite a lot on big data management at the moment. We are trying to understand our customer data, its value and where it is, so that we can use it to serve the customer better.” (Head of IT and Business Solutions, UK, Energy/Utility)


Findings


Conclusions and call to action

COOs and other operations leaders are being challenged by both their organization and by customers. They are causing an evolution in the role of operations leaders – one that is focused not only on efficiency, but also on growth and customer-centricity. One that uses a variety of advanced technologies to provide processes at the speed, quality and the level of personalization needed for competitive advantage

Ask yourself the following questions:– Is the perception of Operations and its responsibilities changing in your organization?– Is your COO and other operations leaders being called upon to help drive top-line growth by other

members of the C-suite?– Are your customers expecting and demanding faster, consistent, tailored services? How are you

responding?– Do you approach efficiency only as a means to an end, or more holistically? – How customer-centric are your current processes? If they aren’t, why not? If so, do you think they

are customer-centric enough?– How is your COO and other operations leaders working to enhance the customer experience and

transform the processes that deliver it? – Are you currently using, or exploring using technologies, such as mobile, analytics, social business,

cloud and intelligent business automation to improve operations?

Conclusions



For more information

ContactShubham Jain

Consultant, IBM Center for Applied [email protected]

http://www.ibm.com/ibmcai

http://www.ibm.com/ibmcai

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Driving growth through serving empowered customers: The need for an enhanced customer experience