Capto was recently featured in Light Reading discussing the need for making and understanding your business case for virtual reality before jumping on the trend.
Disruption is the new reality for business leaders, extinction the ever-present threat. Unpredictable, abrupt change is obsoleting time-tested companies and long-standing industries and is giving rise to new business models to replace the old. Varying levels of vulnerability and volatility are cycling across industries, fueled by technological (digital), developments. Now it is the telecom, media and entertainment (TME) industry’s turn.
The imperative that Chief Marketing Officers (CMOs) and Chief Information or Technology Officers (CIOs) merge their agendas to collaborate for success of their companies, their CEOs and their futures is at the crux of the TME industry’s fight for customer retention, new skill sets and fresh sources of revenue growth.
Capto has released our latest white paper entitled, “Telecom, Media & Entertainment Companies in the Crucible: CMO-CIO Collaboration Essential for Growth.” The paper, which features our expert analysis and recommendations, details the disruptive forces that are currently shaping the telecom, media and entertainment industries, and how CMO-CIO collaboration is key to surviving – and even thriving!
Featured sections include:
- THREE INTENSE HOT SPOTS
- BRIDGING THE CMO-CIO GAP
- SURVIVAL OF THE FITTEST
- THE TIME IS NO
Creating effective, high-performing and well-governed outsourcing deals was one of the key services Capto offered at our launch in 2009. SYNAPTIC Outsourcing is still a key service we offer our clients. The fundamentals remain solid, but how we help make these deals successful has evolved dramatically. I’ll explain how we’ve applied our SYNAPTIC Sourcing methodology differently over time.
SYNAPTIC Outsourcing was born out of our personal experience supported by extensive research that confirmed our hypothesis at the time: IT outsourcing was broken. Deals were under-performing economically and operationally when compared to other broad business trends such as supply chain management.
“54% of IT Executives report challenges in managing vendors and improving this situation is crucial, because failure to manage vendor relationships effectively can destroy up to 90% of the value expected from the contract” - CIO Executive Board Survey, 2009
Suppliers and their clients complained that most outsourcing relationships failed to meet objectives for many reasons, but we found a few key reasons that profoundly impact outsourcing relationships that are still true today:
- Buyers tend to be over-prescriptive, dictating not just the what, but the how. Resulting in diminished ability of the supplier to innovate – or, as some call it, “outsourcing my mess for less”.
- Suppliers and buyers engage in a zero-sum game where what is good for the buyer must be bad for the supplier rather than invest up front in mutually beneficial, outcomes-based relationships.
- Buyers fail to solicit the ecosystem to properly harvest the best ideas as part of their procurement process through the over-use of RFPs rather than more open-ended RFI’s to refine their requirements prior to formally entering a procurement cycle.
In 2010, we reviewed and found tremendous merit in research done by the University of Tennessee for the US Air Force that resulted in a progressive outcomes-based outsourcing arrangement as initially described by Kate Vitasek, Mike Ledyard, and Karl Manrodt, in the book “Vested Outsourcing: Five Rules That Will Transform Outsourcing”. The guiding principles of Vested Outsourcing are[1]:
- Reciprocity – commitment to fair and balanced exchanges.
- Autonomy – the party with more power will not use that power unfairly to promote a narrow self-interest.
- Honesty – each party must be honest about their intentions and the facts of the relationship.
- Loyalty – being loyal to the relationship and not act in a self-serving way. Through acts and deeds you support and promote the partnership.
- Equity – understand and look critically at the distribution of the rewards in the relationship. This is not always a 50:50 split, for example, one party may be given a reward for taking on additional risk.
- Integrity – acting in a consistent trustworthy fashion.
We agree, and still believe, that these six guidelines provide the fundamental underpinnings of a high-performing, collaborative sourcing relationship. The ways in which we have gotten our clients and their sourcing partners to embody these principles, the sustainment of long term deal performance, and the types of disruptive technology projects we have done are what has evolved over the past seven years.
The Business Environment - What Has Changed and How Capto Has Responded
The technology executives we talk with initially try to convince us that they have “been doing outsourcing for a long time; we know how it is done”. However, when we do an evaluation, we typically find that the deal is underperforming and sometimes is actually failing. Usually for the same reasons found seven years ago.
If the past seven years of putting progressive, outcomes-based sourcing deals together has taught us anything, it is that this approach isn’t just theory. It works. And it works really well for those open-minded enough to try a new approach to outsourcing. It requires a shift from short-term tactical thinking to using outsourcing as a longer-term strategic tool focused on outcomes and innovations[2].
Disruptive technologies such as robotics, Internet of Things (IoT), and cognitive process automation continue to unsettle existing businesses. We believe outsourcing can assist forward-thinking enterprises to more quickly and successfully harness these technologies and processes.
The workforce skills deficit in fields such as healthcare informatics[3] , data scientists[4], and technical staffing in general provides a strong rationale for the use of outsourcing and “as-a-service” models to meet staffing requirements. Getting the most from your partner relationships takes on new urgency with these new challenges.
Initially, we focused more on the strength of the client/partner relationship and the partner’s ability to bring a strong staffing mix to the deal. While these two areas continue to be of importance, over the last seven years we have had additional focus on the following areas as the rate of business innovation and change has escalated:
- New Technologies, Business Disrupters and Innovation – Use of outsourcing to harness new technologies and processes with a focus on time to market, that affect the foundation of our client’s business enterprise. Outsourcing can be used to boot strap implementations of Internet of Things (IoT), advanced analytics and big data, and cognitive process automaton efforts.
- Governance - Instituting a well-focused governance process has been shown in practice and research[5] to facilitate a successful win:win relationship – we have therefore focused significant efforts on implementing a strong governance process for all our deals.
- Organizational Change Management (OCM) – Spending more time and effort on OCM has become a priority. Additional training is needed so both parties understand the deal and don’t revert to old habits. We provide training in the tools included with the deal to influence behavior, for example: new metrics, dashboards, governance, as well as contractual items like hold backs and the use of incentives.
- eSCM (eSourcing Capability Model) – We have integrated the sourcing framework – eSCM - created by Carnegie Mellon University, into the Capto methodology. We do not require that our clients adhere to eSCM as it a relatively complicated framework. However, it provides a strong industry standard methodology, which ensures we cover all avenues in our analysis and implementations.
- Business Case Focused– Our background in M&A (merger and acquisition) work makes us more financial and business case focused. Building and using a business case is occasionally something clients have to be trained to do so it becomes integral to our OCM efforts.
Having now implemented and governed numerous deals using SYNAPTIC Outsourcing the importance of -- strong governance, implementing and adhering to a transition strategy that is phased and based on success metrics, and putting in place a comprehensive OCM program – is clear. We continue to be optimistic about the future of outcomes-based outsourcing to meet the innovation goals and objectives required for business success.
[1] http://www.vestedway.com/step-3-establishing-the-six-essential-relationship-principles/
[2] “Global Outsourcing Survey 2016” http://www2.deloitte.com/us/en/pages/operations/articles/global-outsourcing-survey.html
[3] “Missed Opportunities? The Labor Market in Health Informatics, 2014” http://burning-glass.com/research/health-informatics-2014/
[4] “Help Wanted: Black Belts in Data” http://www.bloomberg.com/news/articles/2015-06-04/help-wanted-black-belts-in-data
[5] “Theorizing the IT Governance Role in IT Sourcing Research” Association for Information Systems 2016: http://aisel.aisnet.org/amcis2016/SCU/Presentations/15/
Telecom and entertainment companies are facing this question right now: Do you launch a pioneering, bleeding edge virtual reality (VR) experience if you know the customer experience (CX) is going to be lacking?
NBC and Samsung took a leap with their VR coverage of the Summer Olympics in Brazil. Was it cool that they could offer the experience? Absolutely. Was the experience a good one? Yes and no. Acknowledging the novelty cool factor and the sheer courage at testing it on an event as big as the Olympics, the picture quality and timeliness of content was lacking making the experience just ok.
Early adopters of technology tend to see beyond initial limitations to the potential of a technology. Just look to the evolution of VCRs to DVDs to HD streaming; or the brick phone to the flip phone to the smart phone as examples. Think of the NBC/Samsung Summer Olympics effort as the VCR of VR, with opportunity watching VR’s growth trajectory on its smart watch from the horizon.
The biggest CX issues included time delay (opening ceremonies available the next day) and picture quality. The VR coverage was delivered using recorded footage from many (but for a superior CX experience not enough) 3-D cameras to show the events from many vantage points. All provided via the Samsung Gear VR headset (another ding on CX for those with gear outside of the Samsung brand).
Moore’s Law will steady march us toward new, better wearable, VR and augmented reality devices, giving companies increasing opportunity to innovate around content and customer experience. Many VR ventures are overcoming device exclusivity and increasing mobility by offering mobile applications that do not require headgear. Disney, Lionsgate and Lucasfilm have expressed interest in implementing VR to attract an early adopter audience of thrill-seekers and adventurers beyond gaming platforms. Netflix and The New York Times, too. The projected growth estimate is around $18 billion by 2018 and $80 billion by 2025, with tech giants Google and Facebook fully on-board.
Companies are already being creative in their attempts to leverage VR. Universities are using it for campus visits for students that can’t travel. Retailers can provide in-home ‘dressing rooms’. Broadcasters can literally put you courtside, ringside, fieldside sporting events and movie makers and advertisers can put the audience in the middle of a video experience.
Success in leveraging VR’s positive impact on customer experience, now and down the road, will need significant investment and commitment from the content producers, as well as partnerships with device makers like Oculus Rift and their Samsung Gear VR, PlayStation VR, HTC Vive, or Google Cardboard. Not to mention much faster Internet speeds; better battery life; smaller, better headsets (or no headsets); and better 360-degree camera equipment with higher resolution picture quality.
The decision to pursue now or later is one that Capto always returns to – what is your business case? Is it first-mover advantage to get the kinks out while early adopters are still forgiving? Can you increase advertising ‘stickiness’ by a factor large enough to entice new advertisers? Does the C Suite simply want to be at the bleeding edge of technology? Whatever the reason, a business case supported by both money and talent, are needed to create the best customer experience.
Journey mapping is a disciplined approach to understanding how your customers experience your organization so that organizations can make necessary adjustments to improve the overall experience. No journey map is the same from organization to organization or even from service to service within a single organization. An organization may have a “master” customer experience map with many subset experience maps for an online purchasing experience, or the service journey or the post-service journey.
Capto specifically works with the telecom, media and entertainment (TME) and healthcare industries on mapping customer journeys. While the industries vary greatly, the same process can be used to guide our client organizations through a journey mapping process.
Telecom, Media and Entertainment Journey Mapping
The TME industry is currently amid massive disruption to how people are consuming their media services. Content is no longer the domain of network or cable television. Now everyone from YouTube to Amazon to Netflix is generating content with wild success. This turns the customer journey on its head in many cases and telecoms are using journey maps to understand how the shift is happening currently and anticipating where it heads in the future.
Healthcare Journey Mapping
It is increasingly important for both payers and providers to understand their customers’ journey before they ever have a health issue. Consumers are at the beginning stages of shopping for both health plans and subsequent healthcare services the way they comparison shop for books, mechanics, and travel. How best for health care providers and payers to proceed in this new environment? The first step is to understand the customer at this very early stage of interaction – who are they, what do they care about, what friction points are they encountering, what do they want, and how do they want to receive care and information?
Overlay this analysis with your company’s current processes, procedures, and methods, or often lack of processes. The most efficient and comprehensive way to determine this information and gap analysis is through customer journey mapping.
While every map will look different, the steps to assess and improve a customer experience are largely the same.
- Candidate Journey Selection
Define the business goal the journey map will support. Journey maps can quickly get cumbersome and overly complex. Having a laser focus on the experience being defined as it supports the business goal is essential.
Are you trying to generally understand your customer experience stages and identify all touchpoints?
Are you optimizing the customer experience for a high-value customer specifically?
- Develop Hypothesis Map
Using your internal teams, identify what you think the customer journey map looks like. Identify points of friction, get input from the cross-functional team. An effective tool in journey mapping is customer focus groups, be patient and hold off showing your hypothesis journey map to customers at this step. There’s still a bit more internal work to be done.
- Research
With the hypothesis journey map in hand, start to validate and update the map using data and analytics tools and observation of customers going through the journey.
- Journey Map Development
Building on the hypothesis map and subsequent data from research, build the initial journey map in the format using the design tools to layout each step.
- Journey Workshops
Now it’s time to get the map in front of customers. Typically, steps four and five get iterated a couple of times. Feedback and new data or pain points are uncovered in focus groups are given consideration by the journey map cross-functional team to remap accordingly.
- Implementation Plan
With the journey map identified and vetted it is time to operationalize the customer experience. It’s important that implementation steps are mapped and sequenced properly and appropriate change management communications are wrapped around the new journey map to facilitate its implementation.
The most important aspect of customer experience journey mapping is creating a map that is both informative to the internal implementation team—and actionable. This comes from creating a common understanding of the data that goes into creating the journey map and creating a common customer experience language and mindset within your organization.