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Customer Centric Corporate Restructuring

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April 1, 2000 *3,500 subscribers* Volume 2, Issue 4
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Trend Predictions: Customer-Centric Corporate Restructuring
by Mitchell Levy
Executive Producer, ECMgt.com

We estimate that only 10% of the Global 2000 will walk the walk of the talk they talk in the year 2000 (see March 2000 ECMgt.com http://ecmgt.com/Mar2000/management.perspective.htm).However, for those that adapt and integrate the Internet into their businesses, a customer-centric view will start reshaping their culture and infrastructure. This is a necessary component of business survival in the transition from the industrial age to the information age.

First, let's define customer-centric corporate restructuring. According to Information Week (May 17, 1999) "Customer-centric organizations are defined as being very committed to raising -customer satisfaction levels, using customer data to increase sales, improving customer data quality, gaining a deeper knowledge of customers, and implementing customer-management systems." ECnow.com has a small twist on this definition by defining customer-centric organizations as those companies that "Manage all customer relationship touch-points and ensure that all of the organization's systems, processes and people in the value chain deliver a consistent, valuable experience".

Managing all customer relationship touch-points does not mean that an organization cannot outsource components of its value chain. With the increased services that the new breed of ASP's/BSP's are delivering, outsourcing components of the value chain will continue to increase (ECMgt.com will write about this trend in the Jul2000 issue). The key point to note is that organizations that outsource components of the value chain should not lose control of the overall customer experience. 

Dell does a great job of managing the customer experience. As Bob Riazzi, Dell's Services Marketing Director, writes in the Oct'99 ECMgt.com issue, the cost of enterprise customer downtime is now estimated at $13,000 a minute. Understand the implications of a catastrophic event can certainly help a company work their best to ensure that their customers don't have one. According to Bob, "Dell's move to the complete customer experience includes a 30-day money back hardware guarantee, toll-free telephone support for the life of a computer, and extended warranties plus installation services, next business day resolution, a 4-hour response option, plus a host of other interesting services." Dell's desire is to own the customer experience. They reinforce this behavior by tying bonuses and profit-sharing to customer experience goals and metrics.

Other companies that give and act like the customer is their first priority include: 

  • Cisco - feels so strongly about customer service that 30% of everyone's bonus is based on achieving a customer satisfaction goal.

  • Egghead.com - transformed itself from a conventional retail outlet to an on-line store and is using the appropriate on-line tools to understand the customer and deliver what they want (see this month's feature article http://ecmgt.com/Apr2000/feature.htm)

  • Rite Aid - has over 3800 stores in 30 states in the US and has a focus on the buying needs and service requirements of their in-store customers. Since it wasn't their core competence to build, maintain and service the on-line customer, they partnered with Drugstore.com to deliver that component of their business.

  • Schwab - although they started well after the first dot.com pureplay (E*Trade) was established, they were able to surpass E*Trade and Datek as the #1 on-line discount brokerage firm with a good net strategy that focused on customer satisfaction and utilized their existing legacy systems.

  • Yahoo - with their start as "Yet Another Hierarchical Officious Oracle", Yahoo continues to morph around customer needs. With only a small percentage of the Web categorized, Yahoo still ranks as one of the highest used directories to the Web. 
These companies didn't just pay lip service to turning their companies into customer-centric organizations. They mobilized the entire work force. It's not just about implementing the latest new-fangled technology. This leads to a good question:

QUESTION: "How do companies reshape their culture (vs. infrastructure) to accommodate a customer-centric view?"

ANSWER: It's not easy, because companies need to change their legacy systems, processes and people. This type of change can only happen from the top. It will be driven by either a forward-thinking CEO or a fearful one looking at their competition. Without downplaying the role of the CIO, changing the legacy systems is the relatively easy part. Changing the company's entrenched processes and people is the more difficult one. Change management takes time. However, if the customer is kept in mind while this change occurs, positive results will occur. Organizations need to throw out their existing functional structures (which were built as part of the industrial age) and reinvent themselves around the purpose of satisfying their customers using the tools and capabilities available in the information age.


Let me leave you with a few of my favorite quotes this month: 


I think as long as a company remembers this statement, they can't go wrong: "It's not the complaint, it's how the complaint is handled!"

(P.J., Kanata, Ontario, CANADA)



VALUES are the key to long-term success.  IF a company does not reflect anything about the customer or employee they don't last. Companies that last do not react to the current fad of the time; they stick to VALUES and work them. 

(C.S., Silicon Valley, California, USA)


Companies that have made moves to adapt and integrate the Internet are paying lip service and creating a Web Page, or maybe starting to buy via the Web, however, they are not transitioning to the new paradigm.  They do not get it! 
(David Hemmings, Global Stallion Ltd, Taipei, TAIWAN)


I hope you enjoy this eZine.

See you in cyberspace,

Mitchell Levy

President, ECnow.com <http://ecnow.com>
Executive Producer, ECMgt.com <http://ECMgt.com
Founder and Coordinator, SJSU-PD ECM Certificate Program <http://ecmtraining.com/sjsu>
Chair, Comdex Spring 2000 ECM Symposium <http://ecmtraining.com/comdexspring>

  • ECnow.com is an e-commerce strategy, e-marketing and training firm helping start-up, medium and large corporations change their business to harvest the power of the Internet.
  • ECMgt.com is a monthly e-commerce eZine focusing on strategy, trends and related news. 
  • San Jose State University, Professional Development, Electronic Commerce Management (ECM) is a Certificate Program for e-commerce professionals <http://ecmtraining.com/sjsu>. 
  • Comdex Spring 2000 E-Commerce Management Symposium is a 2-day event featuring 4 keynote speakers, 2 case studies and 9 panels with over 30 speakers <http://ecmtraining.com/comdexspring



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