"We have 510,461 followers on Twitter!"

"86,224 people “Like” our Facebook page!"

Now What?

How do we understand what customers are telling us?

How do we engage with them?

Sound familiar? Many of us have heard these questions over the past 12 months.

The rapid rise in the use of Social Media for Marketing and Customer Engagement is pushing the demand for new tools to analyze and leverage large volumes of unstructured data. The deep CIO interest in the topic was illustrated by the level of engagement from the CIOs attending the Virtual Roundtable on Getting Value from Social Media and Unstructured Data (you can listen to the recording here).

The rise of this new medium has significantly increased the need for CMO / CIO collaboration. The days of closely managed brand messaging are over. In the past, Marketing carefully crafted and distributed messages through multiple channels in the loudest possible manner and then ran surveys to evaluate impact. The process was slow and measured. It was the same story at Customer service. Marc Brown, CIO at Del Monte recounted how they used to receive a customer complaint about insufficient pineapple slices in a tin via US Mail. A customer went throught significant trouble to get their voice heard. In this new era of Facebook and Twitter, a customer now has a megaphone of their own, giving them the ability to gain attention and influence brands globally and in real-time. Marketing and Customer Service require an integrated set of listening and analysis technology to effectively engage with each customer.

I captured these key areas CIOs must focus on to extract value from customer engagement on the social web:

1. Acquire the right resources: The skills required to deploy technologies for processing and analyzing large volumes of unstructured data are scarce and in great demand. In addition to a deep statistical background, an individual working in this space requires a good understanding of the key business drivers for success. Analysts should be able to identify industry-specific data to measure the ROI for Social Media initiatives.
2. Develop real-time analysis and reporting: Turnaround time requirements must be analyzed to ensure technology solutions are correctly architected to meet requirements. Faster response usually requires higher investment. It is important to strike the right balance.
3. Ensure agility and flexibility: The cost of experimenting with social media is not very high. Technology must allow business users the flexibility to try and measure multiple options in the real world. Further, wse must evaluate the need for capturing and storing information that may potentially be used in the future.
4. Communicate clear rules of customer engagement: The fact that the customer interaction is conducted in public, it is imperative to be very clear about how employees should engage and respond. Further, remember that customer engagement now occurs at all levels and within any function of an organization. Most companies are developing comprehensive guidelines and training programs to try and make sure that every customer interaction is a positive one.
5. Prioritize quality: It is very important to ensure quality of the analysis. Wrong information can result in decisions with a significant negative impact.
6. Manage security and privacy: Customer interactions on the public Social Media platforms like Facebook and Twitter, especially in highly regulated industries, pose a significant risk that must be appropriately managed and mitigated.
7. Build a stronger business / IT partnership: Business and IT teams need to work very closely together to ensure success. Speed and agility can only be achieved by constant collaboration.

Big Data generated in the Social Media space offers a Big Opportunity but also raises some Big Questions.

A recently released study demonstrates how the CIO role has continued to evolve and reinforces the strategic role CIOs play within their enterprise. The 2011 CIO Study: the Essential CIO, from our founding sponsor IBM, draws upon interviews of over 3,000 CIO’s from 71 countries and 18 industries worldwide. I have highlighted three areas that I believe are meaningful for our community.

CIOs and CEOs  are thinking more alike than ever before...

The most compelling finding of the study for me is the significantly increased harmonization of the CIO and CEO agendas.   The study provides tangible evidence that IT is not simply an enabler of the business, but a critical component that drives sustainable and scalable business growth.   Asked where they would focus IT to help their organizations’ strategy in the foreseeable future, CIOs and CEOs shared three top priorities: insight and intelligence, client intimacy and people skills. These areas are a significant part of the raison d'être for the Center for CIO Leadership and you can find our most up to date thinking on skills and competencies throughout our website.  Here are some highlights from the study.

CIOs emerging as leaders...

Business analytics and intelligence were identified as the most important technologies for CIOs looking to increase the competitiveness of their organization in the next 3-5 years.   As CEOs are increasingly relying on CIOs to turn data into usable information, information into intelligence and intelligence into actionable insights, the role of the CIO has become much more visible throughout the C-Suite.           

The CIO Mandates...

The study discusses four distinct approaches to IT leadership based on defined characteristics that line up with an organization’s strategies and goals (mandates). Each of the mandates is articulated along with recommendations to help CIOs excel within each area.

I invite you to download ”The Essential CIO”, reflect upon how your path as CIO has evolved, and upon what areas you are focused on for the future. I look forward to hearing your thoughts about the study and to continuing our conversation…

The Center recently hosted a virtual roundtable on an important topic to CIOs, Partnering to Drive Change through Analytics, where we explored how organizations are applying analytics best practices today, the business value that the best performing organizations are experiencing.

In preparing for the session, I developed some observations on the topic that I think provide a useful perspective for CIOs as you all consider taking action on getting value from leveraging analytics and creating business value in your own enterprise.

Not a new topic

In researching the literature prior to the session to provide some historical perspective on how far back this topic goes, I discovered that people have been talking about what we describe as this massive explosion of data, initially called information overload, for longer than many of us have been in this industry. From what I could ascertain, the earliest known attribution of the term “information overload” was credited to an IBM advertising supplement in the New York Times on April 30, 1961. So obviously this is not a new topic.

So what’s different now: more data than ever before

That being said, we are clearly at a new frontier of information overload and explosion of data, which is astronomically more challenging, but at the same time very exciting from the point of view of being able to impact the way we do business.

To put this into a context for today, I like to look at the retail industry, which is at the forefront of collecting massive amounts of data, and more importantly putting that data to use in changing the way they go to market, manage the customer experience, streamline the supply chain, and create the next generation customer. Walmart is often cited as a great example as a retailer leveraging data and analytics across all of these elements. A fact that I found particularly noteworthy - as of about nine months ago, Walmart was processing over a million customer transactions per hour, feeding databases that were estimated in excess of two and a half petabytes (roughly the equivalent of 167 times all of the books in the Library of Congress.)

Walmart has unprecedented insight into what their customers are doing, what they want, and how to respond across their 8,500 stores worldwide. At the same time, they need to find a way to translate that insight into actions that drive customer benefit and stakeholder value.

How should CIOs respond to this incredible opportunity?

“Revolutions in science have often been preceded by revolutions in measurement,” said Sinan Aral, a business professor at New York University, in a 2010 article in the Economist. He went on to say that just as the microscope transformed biology by exposing germs, and the electron microscope changed physics, the proliferation of data is turning the social sciences upside down.

I see that as representative of the conversation we as CIOs should be having now – how to apply this insight, these data, to become the microscope for how businesses can learn and advance ourselves and our industries. There are a few takeaways for me from Katharyn White’s presentation that I would encourage CIOs to consider in looking to manage these conversations.

• It’s a journey – the research presented reflects the evolutionary process of adopting, implementing, and embedding the value of analytics in the enterprise. And as Katharyn emphasized, the process of gaining buy-in and creating change is actually a core part of the implementation. In leading change management efforts myself over the years, I see that implementing analytics is the type of program that requires deep change across the enterprise, and core shifts in the way people make decisions, operate and go to market. CIOs can leverage their expertise in change management, as well as their enterprise-wide view of data and information, to make the journey more successful.
  

• Learn from others – the research also showed that companies can be successful getting to value across many industries; success in analytics is not industry dependent, or even geography dependent. There are companies of all types applying best practices and getting exciting results – whether it is in growing sales, increasing efficiencies, or improving individual customer interactions. Katharyn shared the view that success with analytics benefits greatly from a cross-industry perspective, and from seeking out examples from many other environments as a way to leapfrog in your own industry. This echoes my own experience – and that of the Center’s commitment to peer-sharing. CIOs should seek to systematically leverage learning from others to innovate in an emerging area like analytics.
  

• Leverage your C-suite relationships – by definition, getting value from analytics, especially as companies migrate from aspirational to experienced or experienced to transformed (as described in the research), clearly requires data or information to be collected across functional silos and/or across multiple business units. Whether or not the data collection and management moves to the point of being centralized within the enterprise, there needs to be an integrated and shared view of who is doing what, and how they data can be cleaned, verified and leveraged across the silos. This is an important opportunity for CIOs to leverage your hard-won C-suite relationships, and reach out to connect on an integrated view of the possibilities to move to value in your enterprise. One partnership in particular that Katharyn mentioned – the one with the Chief Marketing Officer – struck me as interesting for CIOs to consider. Analytics is at the forefront of where marketing and technology are coming together, and the partnership represents an emerging opportunity for CIOs to truly push the needle on analytics and how the company goes to market.
  

What are you doing in your organization to move the needle on the path value through analytics? What lessons can you share with others?

The Center’s recent white paper, Partnering for Business Growth: Lessons from Leading CIOs, highlights the importance of customer centricity – and the opportunity for the CIO to lead the enterprise to get closer to the customer.  This is something that we have been working on for the last two years at my company, and I see this as critical for my team, as well as for me, to embrace and to drive.

I often hear from my peers that it is difficult for the IT group to drive customer centricity, given that IT is removed from day to day customer interactions.  Over the past two years at Grupo Bancolombia, we began a number of efforts to address this challenge and try to get very close to the customers.  We have also worked to get close to those people within the business who themselves regularly interact with customers, so through them we can be closer to the customer and really understand what they need and what they want. 

Here are some steps we have taken that you might find beneficial:

Developing a customer service mindset

One of the main competencies that we have been developing is customer service.  Most of the IT team has received training on customer service and customer experience, with a focus on understanding what a customer is, what a customer wants and how we need to listen to them.  This has helped those with an engineering or computer science background to become more service and sales oriented.

Spending time with customers

Another successful initiative we have implemented is to have the IT team spend time in the field, listening and learning how the bank’s customer-facing people interact with our customers.  We are a financial services group and one of our business units is composed of different banks.  We have our IT people spend time at the branches and sit side by side with the branch customer service or sales people to watch how they treat and communicate with customers.  We do the same thing with our call centers.  We have our people go to the call center to spend time with the agents, and listen to their conversations with customers.  This insight has provided a great background to understand both the needs and issues of our end customers.

Standing in the customers’ shoes

A third element of our program is to instill the customer point of view in our process of introducing new technologies for our customers.  We have implemented a program to help the IT team become more sensitive to the experience and needs of customers, by requiring them to be the first ones to use the technology before it is rolled out to our customers.  So for example, when we implemented a new functionality on our ATMs, we first implemented it at the ATMs in the building where the technology team is working.  It was a specific functionality that we could target to certain customers, so we targeted it first to our employees.  This led to useful insights about potential challenges and benefits our customers might experience in the technology deployment that we were able to address prior to roll-out. 

These steps worked well for us at Bancolombia.  What are you doing at your organization to help your team get closer to the customer?

Yesterday, I attended the Center roundtable on Customer-Centricity and the discussion about the role of the CIO in leading the organization to be externally customer-focused prompted my thinking on the role of an IT Steering Committee in connecting the CIO with his or her executive peers to ensure IT is aligned with the business and the business priorities. On the call, I mentioned the concept of creating an IT Steering Committee, and I thought I would expand on that idea a bit in a post.

I teach in an IT course in an MBA program at a local university. At the start of each class I ask the students to go back to their companies and ask four questions:

1. Does the company have an IT steering committee to prioritize projects and who serves on it?
2. What is the % of revenue of IT spend?
3. What is the % of Capex expenditures for IT?
4. Does IT chargeout their services?

Each time that I ask, I get a broad range of responses to question one. They range from the CIO gets all the requests and decides what to do; the CIO makes all the decisions; the decisions are made by a committee run by the CIO; the CEO and the CIO make all the decisions and finally, the officers of the company meet on a regular basis and decide what should be done.   There are more variations but these are the major ones.

I can see the look of dismay that crosses the students’ faces when they see the myriad of approaches that are being presented by the students. After all, most of the students are non-IT’ers who are taking the course in order to learn how to work with the IT department. They are surprised at the diversity on something as fundamental as project prioritization.

Although I am not surprised by the variation, I continue to reflect on this situation. IT should have a set of basic operating principles which should be sacrosanct and universal among all IT departments. The makeup and the functioning of the IT steering committee should be one of them. In my judgment, the IT steering committee should be composed of the officers of the company and should be chaired by the CEO. Period. The only variation that I would allow would be to replace the CEO with the COO if appropriate.

Here are my reasons:

1. The officers of the company are the only people who have a complete grasp of the strategic plan for the entire corporation. They are the only ones who have the insight and the power to add projects, exchange projects or delete projects based on resources, budget and plan. Lower level executives should not be put into that position.
2. The CIO should never be put into the position of deciding priorities. If the CIO does this, then the CIO’s position is compromised relative to all the officers. In this scenario, the CIO is required to determine that one officer’s priority is not as important as another. Although the CIO may be right, it should not be the CIO’s call. The decision should be the consensus of the entire officer group based on the strategic plan. This approach is politically very dangerous for the CIO.
3. The CIO, as a member of the steering committee, is allowed to express views as to the appropriate automation agenda just like any officer may comment on their or any others requested project. Each officer should be able to defend his or her project before the committee.  The CIO should bring technical expertise to the conversation to either support or discourage the discussed project. The CIO must also be in a position to defend any large technical infrastructure projects.
4. This is the only way to assure that IT is aligned to the business. We still hear stories about IT departments not working on the projects that the company wants and needs. That cannot happen when the officers all participate in deciding what is to be done.
5. This approach avoids the “squeaky wheel” approach which allows powerful executives to dominate the automation agenda while less powerful departments are ignored even though their requirements may be more strategic.

We used this approach at my company for 25 years and it was very effective. Never once did someone come to me to ask why their projects were not getting scheduled. They knew that that decision rested, not with me, but with the IT Steering Committee.

Administrator’s note: CIO Members can listen to the archived recording of the Customer Centricity roundtable mentioned in this post.  You can also learn more about Customer Centricity by reading the Center’s research: Empowering the Business to Be More Customer-Centric: Lessons from Leading CIOs.

Abbie is one of my favorite people to follow in this cyber world.  Abbie currently runs her own firm Lundberg Media LLC and describes her current mission in these words:

“As President of Lundberg Media, Abbie helps CIO's and their senior teams translate complex issues into clear messages to speed organizational buy in and delivery of results. Whether introducing a new technology, delivering a new capability or rolling out a whole new strategy, meaningful communication is central to a CIO’s ability to effect change. Few communication consultants offer the depth of business technology insight that Lundberg Media provides, and few technology consultants can match our communication strengths. We are uniquely positioned to provide this essential service to CIO's and their teams.”

I couldn't agree more.  Abbie was the Editor in Chief of CIO Magazine for 13 years and I can not think of anyone who has greater knowledge of Business/Information Technology and the ability to communicate in non-technical everyday language.  I strongly recommend Abbie if your talents as a communicator aren't your strong suite.

Here is Abbie’s information to add to your list of “Who’s Worth Following”:

• Twitter - @abbielundberg
• Facebook - Abbie Lundberg
• LinkedIn – Abbie Lundberg
• Web Site: http://lundbergmedia.com/

I continue to update the list of people I’m following and based upon the number of views of my posts it appears this is a helpful service.  Let me know what you think.

Bill

William A. Crowell

william_crowell@hotmail.com

Twitter: billcio

Facebook: William A Crowell

LinkedIn: Bill Crowell

CIO Magazine had a very interesting article by Stephanie Overby published this week entitled “Don’t Mess with Texas: 7 Lessons from State IT Outsourcing Disasters”.  Her 7 lessons learned from IT outsourcing debacles in Texas, Virginia and Indiana included:

• You Get What You Pay For
• You Get What You SLA For
• When the Going Gets Tough, The Tough Go Public
• You Can't Sue Your Way to a Better Relationship. But You Can Try
• Outsourcing Means Never Having to Say You're Sorry
• Outsourcing Will Not Cure Internal Inertia
• If At First You Don't Succeed, Try Again. And Again

The article goes on to say “It took San Diego County two outsourcing contracts—and three different CIOs—before it got its outsourcing deal on the right track”, which is a reference to a May 2006 article that Stephanie wrote (“Government Outsourcing: San Diego Tries to Learn from Contract Mistakes”).

The problem with Stephanie assessment, especially the idea that San Diego got it right the second time around, is the belief that the outsourcing contract is the basis for success.  My argument is not that having a sound contract is a bad idea but simply that any third party relationship has to be based first on a solid foundation of mutual respect, empathy and trust.

The contract is like a prenuptial agreement, if things don’t go well it’s the basis for resolution of any disputes.  Once the marriage is consummated and the deal signed, the players on both sides need to work on developing their relationship.

The starting point for this relationship is mutual respect.  The client needs to understand that they have hired expertise in IT from the outsourcer because IT is not their organization’s core competency and that their organization has made the outsourcing decision based upon a belief that the outsourcer will provide more efficient and effective IT services.  Anyone in the client organization that is not committed to these fundamental principles should not be involved in the outsourcing relationship.

From the outsourcers perspective, they need to demonstrate from the get go their core competency in IT and clearly document the ways in which they are improving the efficiency and effectiveness of the IT services they are providing.  The profitability of their relationship should be the result of the superior services they are providing and not the principle goal of the relationship.  Here again, any member of the outsourcing vendor that doesn’t embrace these principles should be removed from the account.

Empathy is a second essential element of the third part relationship.  The client needs to understand that their outsourcer is not a charity and needs to generate a reasonable profit if the relationship is going to be sustained over the long run.  The outsourcer needs to understand their client’s cost concerns and make sure they are clearly demonstrating that their services are competitive.  Empathy implies flexibility on the part of both parties.  The client’s demands must be reasonable and not place an unfair burden on the outsourcer and the outsourcer must be willing to give when there are issues with the quality or effectiveness of the services being provided.  If the outsourcer has over promised the services they can provide for the price they quoted, not an unusual situation, then these issues need to be addressed head on.  The question can best be addressed by determining a fair price and an appropriate discount that reflects the outsourcer’s prior commitments.

If mutual respect and empathy have been established, then the conditions exist to build the third leg of the stool - trust.  Trust clearly takes time to develop and is the most valuable element of any relationship.  Any actions by either party that would violate the others trust is a strategic relationship issue and needs to be effectively addressed by the senior management of both parties.  Nothing can cause a relationship to unravel faster than the loss of trust.

If your considering outsourcing or have already entered into an outsourcing relationship, develop a sound contract and then put it on the shelf.  Focus on developing a solid relationship based upon mutual respect, empathy and trust, and my bet is you’ll never need to refer to the contract again or at least only in the most unique circumstances.  If problems develop, consider working with a marriage counselor before ending up in a failed relationship.

William A. Crowell

wcrowell@asuret.com

twitter: billcio

LinkedIn: Bill Crowell

My Blog: http://bcrowell.wordpress.com/