Subject: May2001 Customers Rule brought to you by
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Management Perspective
by Mitchell Levy, Author,
New Expectations for Customer Service

With the Internet, consumers have gained considerable power to choose with whom they will do business, as well as where and when. The need for intense customer focus and exemplary customer service will continue into the future, as customers remain central to the growth of e-commerce.

Today is it estimated that almost a quarter of all US businesses engage in B2B Internet e-commerce, totaling over 200 billion dollars in transactions, an number that is expected to triple by 2003. The expectation of flawless performance in ordering, delivery, and service is no doubt due to the perception that if you have ascended to the level of Internet commerce, you are ready to provide instantaneous, accurate response to customer needs. We expect that Internet-enabled businesses will have complete knowledge of our transactions and of our value to them as a customer.

While the consumer market is mostly satisfied with customer service, the business market requires more. Businesses cannot afford lost orders, incorrect shipments, or late deliveries, and they demand instant availability of customer service representatives. There are over 100,000 (SME) medium enterprise businesses that are transaction-capable, which are doing business with the global 2000 EDI-enabled firms and with 1,000,000 small business customers. Small and large firms alike have the power to choose with whom to do business. They make those decisions based on service, price, and availability, but superior performance and customer service are often the deciding factors.

EDI transactions by the majority of the Global 2000 move over $1.5 trillion in goods and service through supply chain networks, with very few errors. Internet-enabled businesses engaging in digital commerce must be fully wired for e-business, from catalogs to transactions, to internal and external business processes with trading partners and most favored customers. Customer service applies to all stakeholders in B2B commerce, internal and external.

All types of commerce today, from airline travel to information technology and software purchases to provisioning of telecommunications have migrated to the Web allowing more business employees to conduct commerce on behalf of their enterprise with greater speed, choice, and overall convenience. We expect that any firm with a paper catalog or even CD-ROM will have access to that information, and create fully searchable Web content. The Internet is often the first and last place business customers will look to fulfill a need, as digital convenience makes instant selection and purchase possible. But not every firm has made this transition.

Leaders like Intel, Cisco, SABRE, Microsoft, IBM, and countless others provide not only complete selection through the Web, but also resources for their sales force and most preferred customers, through semi-private extranets. Verticals other than IT, most notably health care, government, manufacturing, logistics, and telecommunications, have embraced the ability to synchronize business processes through middleware, exchanges, and the soon-to-be universal XML as the canvas for business documents of all types.

Ironically, the prowess of business in doing business makes us the most demanding of all customers - we know what to expect because we know what we are capable of delivering. The perspective of e-business to a customer-centric realm requires us to focus on delivering exactly what we would expect of our own internal operations. There is no longer a difference between "inside" and "outside" of an enterprise - it is all one big playing field.

e-marketplaces were conceived on the very premise that incumbents can and should be unseated by more nimble, niche-oriented, and customer-driven competitors, and their visibility should be made universal through sell-side exchanges. Adding to procurement portals, another 200 to 300 "stable" marketplaces are expected to conduct almost $1.5 trillion dollars in business to business commerce, roughly equal to what is already enabled by EDI.

To succeed in capturing new business, small to medium enterprises will need to be as visible as the incumbents in the supply chain, become more responsive in creating customized offerings, and make themselves as easy (or easier) to do business with than traditional EDI. To succeed in a customer-centric world with the stakes of B2B commerce, best practices are easy to define. Let's look at some key vertical markets to see examples of superior customer-centric business.

Manufacturing - GM, General Electric, and Grainger make engineering collaboration possible through integration of design, engineering, manufacturing, and servicing at all levels of manufacturing, from parts to subassembly to complete systems. Treating partners as customers and delivering the same level of service has proven to be a competitive advantage in manufacturing.

Government - The IRS, Social Security, DMV, and other state and local government agencies have all taken on customer service as the key metric for their measure of success. While "consumers" cannot pick and choose among agencies to deal with, we all benefit from efficiency, personalization, and convenience. As consumer satisfaction brings about a new relationship built on service-centric processes, benefiting most are government agencies that were once seen merely bureaucratic monoliths. They have entered the age of customer-centric, networked business processes.

Logistics - UPS, FedEx, and Airborne have become part of the supply chain for many Fortune 5000 firms. Through coordination with customers and integration of information technology, UPS has become a partner and intermediary in moving product and information -not just parts- between wholesalers, warehouses, value added resellers, and ultimately end users. Kinko's has joined UPS and the US Postal Service in moving sensitive business information, with self-service customer orientation, to create value by delivering at the speed and efficiency e-business requires.

Telecommunications - Qwest and Bell Atlantic allow customer-facing, self-service provisioning of materials and services that once were the purview of select service intermediaries. Cisco sells 75% of its product through Internet-enabled channels, using its Web-based "configurator" to help customers and channel partners select, price, purchase, and deliver networking hardware.

Information Technology - Intel and Cisco and Dell gained an early reputation for business- focused customer service through highly functional extranets, allowing personalization and guided selection of products. Intel and Dell set the standard for e-business customer service, each moving over 50% of its products through Internet channels.

Software - Microsoft and Oracle were early players in ESD, (electronic software delivery through the Web), supporting everything from office and networking products to downloads of sophisticated operating system and commerce application platforms. Today virtually every software application provider offers downloads, support, FAQs, and purchasing over the Web, enabling global presence and competition.

Energy - In a very complex network of producers and consumers of energy for resale and distribution, exchanges coordinate over half of spot purchases. As electricity, gas, and other utilities become more (and less) regulated, optimizing service to end customers will require knowledge of use and accurate forecasting of demand, so that precious resources can be shifted quickly to meet business needs in the private utility markets.

Summary: The dawn of the Internet and the phrase "Internet time" has given birth to the "Experience Economy". Consumers expect flawless performance from business as information technology systems and processes promise a new generation and level of consumer service. With the freedom to pick from a global palate, consumers have gained considerable power to choose their business relationships, as well as when, where, and how often they will interact with their business partners. The need for intense customer focus and exemplary customer service creates a unique challenge for business and government alike. Those who excel have simply gone back to basics: what is the value I provide to my customer, and how can a network of digital process deliver a more fulfilling experience? At the end of the day, your brand becomes that consumer experience, for better or worse.

I hope you enjoy this eZine.
See you in cyberspace,

Mitchell Levy
Executive Producer,
Founder and Coordinator, SJSU-PD ECM Certificate Program

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