Focus on Customer Outcomes for Long-term Profitability

Firms competing in mature markets usually apply two broad strategies to secure growth and profitability. The first strategy centers around aggressive pricing. This strategy is particularly tempting in downturns or to force competitors out of the market. But overall, it is a shortsighted strategy and hurts long-term profitability despite apparent initial success in terms of growth. The cut in margins is usually the start of a downward spiral followed soon by some cost cutting in its various forms, which is the ultimate goal of most Business Process Management (BPM) projects and the only justification for oversimplifying customer-facing processes with flowcharts. The result is poorer service and product quality, the outsourcing or even complete elimination of services with all its dire consequences but without bringing back margins to sound levels.

The other strategy is about focusing on customer outcomes. This requires a shift from the notion of products and services as a commodity to that of shaping the perception of the customer in terms of value received. In this setting the customer judges about the successful outcome of a business process instead of a bureaucratic system. In most cases this is a substantial differentiator from the competition. However easy it sounds this shift is not something that can be achieved overnight and it is certainly no one-off procedure.

Starting with the focus on customer outcomes requires goal-orientation, transparency and empowerment in process planning and execution. It considers knowledge and an organization’s adaptive capabilities to put it into action for accommodating different customer preferences. Giving participants the means to create a value perception interactively instead of mere exception handling along a sequence of predefined steps builds the cornerstones of long-term customer relationships which result in increased loyalty and revenue.

Efficiency in High-Level Expert Performance

As high-level and high-value interactive work becomes more and more prevalent in customer-facing and service-oriented organizations so does the question of how IT can improve the efficiency of such work. It is clear that most related activity is closely tied to human perception, knowledge, and interaction and therefore a solution must be centered around human issues rather than abstract concepts such as process models or workflow charts.

A key to it lies in determining how experts perform in real-world situations with an urgent need for decision-making under severe limitations like tight time frames for resolution. It has been ascertained that the recognition of certain patterns based on prior knowledge plays a major part in such tasks and way sidelines strategies like planning ahead. This is yet another indicator that IT has to support businesses and users in different ways than the commonly prevailing command-and-control logic.

This is exactly why the technology concept and the vision behind the Papyrus Adaptive Case Management Platform focus on the human aspects of IT. Instead of forcing users into predefined process flows Papyrus ACM gives them full transparency to see why they need to do certain things to meet specific targets and provides them with the flexibility to adapt their processes during execution according to their expertise. The ability to make instant decisions based on real-time access to data and communications is a prerequisite for both efficient and effective interaction and collaboration. Businesses in turn profit from this sort of empowerment because they save on bureaucratic control overhead and gain on customer outcomes as ultimate benchmark for business value.

Using Technology as Innovation Driver

While innovation is rightfully widely hailed as a key element of business success the widespread day-to-day practice in many organizations seems to confirm that there is no real commitment to innovative efforts other than paying lip service. Yet most good managers are aware of of this dilemma but the current bureaucratic business and IT environment is usually too rigid to allow them swift responses when opportunities arise. It is therefore essential that managers become technology savvy and understand the immense power of change potential that IT can create. To ensure that their businesses remain competitive they ultimately need to consider how they want to use IT to enable knowledge and innovation.

Only businesses that manage to use technology as an innovation enabler are shooting past those that control IT and/or processes by using excessive bureaucracy in terms of governance, centers of excellence and best practices. Each day a business does not innovate it falls behind because the economy is a six-lane highway and the speed limits are going up each year. If they stop to execute lengthy innovation processes to figure out whether you need to go straight or exit, they will get run over. Missing the right exit will cost time and money. Businesses take thousands of those decisions each day and the more of these are automated, the less does a business consider direction in relationship to outside conditions. Evolutionary change can’t be encoded into innovative processes. The long-term impact of suppressing tacit knowledge and change through optimization is dramatic.

The only way to enable the business to improve innovative processes and emerging practices through transparency, flexibility and adaptability of business operations is an embedded Business Architecture including strategy, capabilities, relationships, business entities, and processes. This in turn requires that the interaction is driven by users and not by some predefined process. All that is needed instead is collaborative information sharing and free-flow execution between many possible service and resolution tasks while management can intervene for guidance and advice. Instead of bureaucracy and methodology to tie them down technology must empower the actors and provide the means to achieve a specified goal and create true business value.