Achieving Great Customer Experiences for Airlines. Really???

Almost no-one (other than for the kids customer segment) look forward to the flying experience. Much of a traveler’s experience is outside of an airline’s control and unfortunately for airlines, customers take their experience across the entire travel lifecycle into account while rating their airline experience. And most of it is never pleasant. Poor airport experiences, increased government security measures, long security check queues and the surrounding businesses that accompany travel may detrimentally affect a travelers’ experience.

Therefore achieving complete customer experience in the Airlines space is still a near-fantasy. Forrester’s assessment on customer experience quality scores airlines at an average of 66 with the industry being ranked 8^th overall.

Figure: Ranges of Customer Experience Quality within and across 13 Industries Customer Experience Maturity Defined (A Forrester Report)

To aggravate the problem further, airlines today are struggling with margins and the profit airlines make today on a flight seat is only about 2.5 USD.  Airline costs have escalated and with increased competition amongst themselves, customers found it easy to switch loyalty in case a fare was being delivered at a compelling enough discounted price point. In this Wall Street article, it takes about 100 passengers on a flight to just cover its costs.

Does that mean that the situation is hopeless? No and actually, there is much an airline can do. Firstly, they be able to assure a traveler almost never undergoes a negative customer experience while flying with them. And when that rare moment does happen, the airline company needs to acknowledge the service exception and respond pre-emptively, even before the customer becomes aware of the situation. For example, if a flight delay causes baggage to be left behind on a connecting leg, proactive communication and compensation must be delivered immediately.

Secondly, airlines need to deliver relevant personalized messages to their customers across all touch-points. Customers want to be reached out to but only with relevant messaging. A leading European airline company has a 66% click-through rate of email communication sent to its customers. Of this, 99% respond to these offers positively. For an airline to be able to replicate such success, they must have a complete and unified view of the customer first.

Thirdly, airline companies need to re-invent their loyalty programs such that they help airline companies maximize their profits from their best set of customers. Airlines were the first to introduce full-scale loyalty programs with only one objective: acknowledge and reward their best (read as profitable) customers so that they could ensure better profitably.  Somewhere along the way, these programs lost their effectiveness. In the US, it is only of recent that airline companies are moving from a mile based frequent flier based program to a revenue base program or a hybrid program, to ensure they reward their high value customers better. Loyalty programs also need to extend themselves onto the entire travel ecosystem such as hotels, car rentals, spas and even local transportation. About 18 billion USD worth of loyalty points expire due to non-redemption every year, which means that customers aren’t as engaged to the loyalty programs as much. It is imperative therefore that airline companies understand that loyalty programs are not an end in itself but only serve as a foundation to achieve that elusive long lasting customer loyalty.

The figure below summarizes all this best. Achieving customer loyalty, personalization and creating an unified customer 360 view are imperative towards attaining the goal of exceptional customer experience. Today, 76% of organizations are declaring to have or embark on a formalized customer experience program.

Figure: TCS Commissioned Forrester survey results stating drivers for Customer Experience Programs

Security and the Cloud: A Microsoft Study, A Gartner Report and how PRISM can Help Cloud Adoption

A reason commonly cited against cloud adoption has been security and there are enough statistics to suggest that about 50% of customers who were unwilling to move to the cloud had stated data security as a reason.

However, per a Microsoft study, the reality is quite different for those who have already adopted the cloud. The other advantages (such as greater service availability, lower cost and quicker time to market) were rather obvious but even data security has improved upon movement to the cloud (at least true for small and medium enterprises). To put it simply, the cloud has offered better security features that would otherwise have been very expensive to implement on premise and that security systems always stayed up to date is ensured as well.  This was an observation in the Microsoft cloud trust study (http://www.microsoft.com/en-us/news/download/presskits/security/docs/TwCJune13UK.pdf) that stated that 91 percent of SMBs who have moved to the cloud have mentioned that the security of their organization had been positively impacted as a result of cloud adoption.

However, Gartner had something a little different to say altogether in its news release in the last week, where it stated: “through 2015, 80 percent of IT procurement professionals will remain dissatisfied with SaaS contract language and protections that relate to security“. 

See http://www.gartner.com/newsroom/id/2567015 for the full press release. This report mentions that terms on data recovery and data integrity should be as clear as possible and stated upfront in the contracts that are signed, which are really not the case currently. 

On another note, in the backdrop of the PRISM revelations, security on the cloud has become a much more discussed point (the volume of these conversations have got a lot louder). However, unlike what conventional thinking would like us to believe, this actually is leading to a huge opportunity for markets where cloud adoption hasn't taken off yet really, such as Europe for example.  Local on-site clouds in various non-US localities could start taking off and even nationalistic clouds in non-US geographies could become a real possibility. European providers (who don’t come under US jurisdiction) could start to take on the likes of Amazon. Simon Wardley, an UK based researcher for the CSC had actually this to say: “Do I like Prism .. yes and god bless America and the NSA for handing this golden opportunity to us.” His blog goes on to state how this was going to benefit cloud adoption in Europe:  http://blog.gardeviance.org/2013/06/on-prism.html.

Cloud adoption is inevitable eventually but the verdict on security on the cloud is still to be seen. However, we don't have to wait for very long to see how this will turn out and according to me the PRISM episode is not only going to help speed up the addressing of security concerns but also will impact the adoption of the cloud positively. 

Internet Surveillance: How much Power is 'too much' Power?

I read Digital Fortress only recently and it’s almost remarkable that the timing of this coincided with the NSA scandal that is making front-page news globally. The ethical conundrum that was presented in the book is still as relevant in the World as we see it today (it is still the core of various science fiction stories out there) and there will always be supporters of this argument on either side: you know that you need to cross some line to fix some wrongs but when do you know you have crossed a line that you shouldn't have? When do you know you have ‘too much’ power?

I don’t think that this is about the striking of balance between privacy rights and national security as its being made out to be. Hell, consumer privacy died a long while ago (once we created our social media profiles and became active users online) and in this case it’s only the US government that is potentially breaching user privacy. That should be the least of our worries. In fact, I would be more worried about the amount of consumer data that a private corporation like a Google or a Facebook has. In fact Ashley Mayer’s tweet at the end of the Google keynote at its recently held IO conference that has since become famous had this to say:

Of course, in the Middle East, people have been jailed for saying things that the Government didn't want them to say and we know that there is a certain level of internet censorship in countries such as China and India, but for the rest of the western World, the internet is still a free forum as we know it. So according to me, for the most part of, we should be more worried about the power the private organizations have today and that it’s not about the breach of privacy anymore but the ability of these organizations to influence our lives and control our behavior in a way that works best for these organizations.

Coming back to my initial line of thinking: the moot point is not about the current US government’s ability to snooping in on our online activities but the potential power that this ability could give to someone who could misuse it for private gain. For example, if an autocratic power somehow got control of the PRISM program today, they could do the actual harm that we are all afraid of today.  However, at the very same time, if the US government is to be believed, the PRISM web traffic surveillance program has contributed in helping prevent more than 45 potential terrorist attacks (with at least 10 of them in the US). So therefore this program has been a force for good. However, this power in the wrong hands could wreak havoc and therefore the question still remains: you had to cross a line to fix some wrongs but when do you know that you have crossed a line you shouldn't have? When do you know you have ‘too much’ power? The verdict is still out there. All I know is that the Internet must be protected from being controlled, irrespective of whether it’s a government or a large corporation and that is what exactly Internet pioneer Sir Tim Berners-Lee also has to say. 

FOMO and our Addiction to Technology

Fear Of Missing Out (FOMO) as an acronym for a social disorder has been around since 1985. However, this received a lot more attention in the last few years given the advent of the Internet and social networking that has allowed us to be connected and be recognized in ways much easier than before.

To want to feel noticed and subsequently feel important is a natural human tendency. In a way its gives us feedback on our behavior and tells us what we should do to become more recognized. However, not all of us use it to re-enforce even our own definitions of good behavior. More often than not, FOMO is the root cause of our addiction to technology and we don't even know it (look at this Mashable.com article to see if you fall into one of these categories of social sickness addictions). Hell, even the media is addicted to social media.
 

I have a close friend who has over 850 'friends' on Facebook and a similar number of LinkedIn contacts. When asked, my friend remembers to have made any sort of personal interaction with only about 50 of her friends over the span of the last one year. However, she at least checks her Facebook updates about 5 times every day not just to see how many may have posted a like or a comment on a social event she was part of but more to see what every one else has been up to.

Its not just social media that we are addicted to, its also all the devices that have become so ubiquitous in our daily lives today.  Last year, the average US household spent close to $444 on Apple products (which was almost double the amount in the previous year) and if Apple rolls out its own HDTV, then analysts predict that this number could double by 2015. 444 in both relative and absolute terms is a large number and it amounts to almost 1% of the median US household per capita income. And there are many more devices out there than that of Apple, which means that the average US household is spending much than this amount on technology and devices every year. A lot of people I know don't buy an Apple device because they really need it but because everyone else seems to have it.

I don't think its all bad and that the World will be ending anytime soon (read: I am not one of those suffering from depression that the 2012 event didn't happen). In fact, I am strong believer in that the World is getting better everyday. There is little doubt that social media, technology and the Internet have revolutionized business and allowed that exponential growth to happen so much quickly.  See this inspirational talk from Peter Diamandis, Chairman & CEO, X Prize Foundation who tells us all about the good things we can expect.

While the World becomes a better place everyday, I still think that some of us need to step back a little with our social media, Internet and technology obsession. Like Eric Schmidt said about the Internet: "The Internet is the first thing that humanity has built that humanity doesn't understand, the largest experiment in anarchy that we have ever had.” Therefore, we need to give ourselves a pause and let it play it out for a bit. In the meanwhile, we can all connect to the real world and make some more real connections like calling that 51st friend on our Facebook friend list.

Inspiring Use of Technology Towards Social Impact@Crunchies 2012

This year's winners at the Crunchies actually surprised a whole bunch of people: Google+ won in the best social application category, Nest beat iPad 2 and Twitter beat a whole lot of other nominees to win in the biggest social impact category (inspiring revolutions, anybody?!). But this debate on-who-should-have-won is not what I want to write about today. In fact, I specifically wanted to highlight the inspiring models that some of the other nominees in the biggest social impact category are pursuing.

Charity: water, the runner-up in this category, had a simple and powerful premise. There are 1 billion people across the planet today without access to clean water. Simply sign-up on the website and donate via credit card. The credit card's company fees and all other operating expenses are sponsored and therefore the donation directly contributes to a water project 100%. Till date, they have funded over 6000 projects impacting over 2 and a half million people, and have raised over $40 million. Charity: water has used technology to make the entire process of fund-raising. allocation and tracking efficient and transparent. For instance, you can track via GPS, every single project that has been given funding towards a water project; you get a report for where your money has gone and very importantly, Charity: water verifies the amount of funding that is actually required by the implementing local partner via technology. For more information on Charity: water see: http://www.charitywater.org

Khan Academy, another nominee, has an equally simple premise. Its website provides one with free micro-lecture and tutorials that have been hosted on Youtube across a wide variety of subjects. You as a teacher, can even sign-up an entire class and track your student's progress to the minutest of detail. This non-profit has significant backing from the Bill and Melinda Gates Foundation and airs no advertisements on its videos or website. How it uses technology is extremely interesting: it has adaptive learning exercises and generates problems randomly. It has powerful statistical reporting and keeps track of what you have been learning, what you have learnt so far and what you been struggling on so that you can focus on it even more: features that are not available in most traditional classrooms even. For more information on the Khan Academy see: http://www.khanacademy.org

But perhaps, Kickstarter, yet another nominee, sounds the most disruptive of them all. This is an online crowdfunding website for funding projects where donors can directly choose creative projects to fund. The project owners need to ask for a minimum amount of funding and set a date by when the need to raise the funds by. If within this time, the funds aren't raised, then all the money raised in that project is returned to the donors. Also the project owner retains 100% control and ownership of their projects. There is no guarantee that people that post projects will deliver on their projects or even use the money to do their projects and Kickstarter advises sponsors to use their own judgment on supporting projects. However, this model has been working successfully so far and donors get special benefits from the project owners depending on the amount of donation being made. For more information see: http://www.kickstarter.com

For all full list of this year's winners and nominees, see http://techcrunch.com/2012/01/31/crunchies-dropbox/ 

Facebook AND Google. Not Facebook v/s Google!

Google and Facebook are arguably two of the world’s most influential web companies. Per Alexia’s traffic ranking, Google.com comes first followed by Facebook. Both companies also seem to have similar manifestoes and vision. Per Facebook’, it empowers people to share and make the world a more open and connected place. On the other hand, Google’s founders have always maintained that Google’s philosophy was to make the world’s information more accessible and better organized so that users could get exactly what they searched for. Unfortunately, both these web giants don’t seem to be playing well to each other and for whatever it’s worth, millions of consumers like you and I lose out the most. I mean if Facebook and Google were really true to both their philosophies, wouldn’t they have found a way to co-operate with each other to make the search for and the access to information more effective and better?

Google and Facebook weren’t always at war with one another. Most company insiders claim that Google’s launch of OpenSocial and getting other social networks committed to it in 2007 was the trigger point. Facebook also spurned an investment offer from Google also in 2007 about a week before the OpenSocial announcement and went ahead with a Microsoft investment in it for USD 240 million (technically speaking Microsoft may have actually outbid Google). And then of course everything went downhill from there on. 

It’s unfortunate because I see so many areas where Facebook and Google could have co-operated better to the benefit of its consumers. For one, Facebook’s integration into the Android platform is much below par if compared with its integration into the Apple iPhone platform. In fact, if you went back 3 years, Facebook had decided on not dedicating even a single resource for working on an application for the Android platform despite Google offering to loan a programmer to Facebook for this very purpose.  Another area where I would have loved to see
more collaboration is on my ability to see, track and interact with my Gmail contacts on Facebook and vice-versa without requiring the export of contacts from one platform to another. That way I could get to leverage the power of both platforms while using only of them. And that’s true for most of Google’s other platforms such as Youtube, Picassa and more importantly Google documents. Also I would have liked for Google maps integration with Facebook places. Upon posting a location update on Facebook, I would like for it to tell me what places my friends have found interesting in this location before and use Google maps to help me navigate to these places of possible interest. 

There’s a lot that’s also possible between these two players as far as social search is concerned. Google Plus already incorporates search results from my friend’s blogs. If we could also incorporate results from my friend’s Facebook content onto here then I could actually find out more information that may be actually relevant to me. Today about 150 million people visit a Facebook page from a Google search result. But the search on and indexing of Facebook pages is restricted to only a small set of pages. 

In summary, I feel that this isn’t a winner takes all game like its being made out to be. Facebook is great at social and Google is great at search. If we can see some more collaboration between the two, we would be substantially increasing the value of the pie for everyone and the end consumers like you and I would be greatest winners.

Social CRM - Analyst Studies

This is the first in a 2-part series on social CRM. These discourses (if I may dare to call them that) mirror the presentations I have been making at my workplace on this topic. In this part, I will focus on defining it, elaborating its importance, how it fits into an organization’s overall CRM roadmap strategy, its related industry trends and the key issues & challenges faced during social CRM adoption. In part 2, I will attempt to do a product and talk in detail on various use cases that have been successfully implemented by the industry in general in this area.

Social CRM has become such a popular buzzword today and in a way its popularity has lead to an overall misunderstanding and misuse of the concept. Various definitions of the concept exist. Forrester and Gartner have simply expanded the traditional definition of CRM (business processes supporting sales, marketing and customer service) to include the concepts of collaboration and communities to come up with their definitions on the social CRM. The one that is most popular and most commonly referred to today is the one by Paul Greenberg: social CRM is the company’s response to the customer’s ownership of the conversation.

This graphic by the Chess Media Group nicely represents the circle of social CRM evolution (though it has more detail on the listening aspect than on targeting and analysis aspects).

The importance of social CRM is often highlighted using the following: improved customer service, new market segment exploration, improved communication efficiency, improved customer targeting, decreased sales & service cost and increased R&D and innovation. Various statistics have been citied to draw attention to this concept:

1. 30% of Google search results on the world's top 20 brands provide links to Social Media on the 1st page*
2. The internet accounts for only 10% of total sales, but Social Networks influence > 40% of all offline sales*
3. 85% of the students currently enrolled in U.S. colleges and universities have profile pages on Facebook*
4. By 2012, spending on social software to help sales, marketing and customer service processes will exceed $1 billion worldwide**

References: *HBS Social Media Report, Edelman Customer Index Report
                      **Gartner - Social CRM: The Next Generation of Customer Innovation. March 30-April 1, 2011

Strengthening relationships with customers, enhancing brand awareness and establishing interactive relationships with customers were given as the top 3 reasons by CxOs for investing in social media in Gartner survey conducted this year.

If one were to study the use of social CRM within the larger CRM operating framework, then there has been various innovation use cases put to good use. Within marketing, Ford Fiesta has my top vote (see http://media.ford.com/article_display.cfm?article_id=30158) and the MyStarbucks idea finishes as a close second (http://mystarbucksidea.force.com/). Drugstore.com has won several awards for its use of social media towards delivering customer service (http://www.rightnow.com/blog/client-success/taking-home-the-gold). As a social CRM, e-commerce social shopping application Groupon is an easy winner and doesn’t even need explaining. There are many other examples of companies having deployed social media successfully. A bigger list is here, courtesy a Gartner study (Google them to find out more):

Social CRM is not without its list of challenges. Most organizations do not have a social CRM strategy or definition in place and nor have they defined the metrics about current social CRM capabilities that would service as a baseline for improvement. Secondly, there is inherent difficulty in establishing a social CRM strategy in the face of fierce hype from industry magazines and software and service vendors. Expectations for social CRM today clearly exceed the measurable benefits. In Gartner’s technology hype cycle report last year (for sales force automation), social CRM is expected at least 5-10 years away from mainstream adoption and per their study is in a phase of inflated expectations. Thirdly, poor organizational readiness for self-service has emerged as the biggest stumbling block in the increasing drive toward a more cost-effective self-service offering. While there are those who are ready to use social media as a business strategy, they have simply not changed enough themselves to be actually in a position to best use it. Fourthly, most organizations have 3 or more social CRM initiatives running in parallel, often only loosely coordinated. There is no dominant trend as to which department within an enterprise will eventually run a social CRM program. Today that department is definitely for sure not the IT department. There are other technological limitations as well. For one, language complexity and content sources can be an obstacle. Social conversations are often unstructured and include text, images, videos, emails, blogs, tweets and other types of data types that are not part of a database. Separating noise from an authentic social signal, a critical aspect to helping a company better understand their clients is also a challenge today and this can get past the listening tools as well. Seamlessness is yet another issue. Social consumers channel hop during conversations, and companies need to be able to efficiently and effectively follow their conversation and pick up where they left off. Deep integration with the web and with contact center experiences is required to pull this off.

Despite all the challenges and issues around it, social CRM is here to stay. Large investments are unneeded to begin social CRM unlike its enterprise CRM counterpart; social CRM applications are installed and used by organizations of all sizes, including companies with only five employees, though social CRM by itself can’t be a company’s entire CRM strategy. A huge adoption has already taken place these industries: high tech, media, consumer goods and retail. This is particularly true for the NA geography. The next wave is in the telecommunications, education, banking, insurance, pharmaceuticals and automotive industries.

More on the products and use cases in the next fortnight's blog.

An Introduction to Business Transformation

Management and technology’s tools and techniques are only a means to achieve a higher goal of business success and competitive positioning. These tools keep changing over time, but the end results must be achieved successfully all the times. Business Transformation fits exactly there. It’s a management sponsored (or at least a closely-backed by management) activity to do with aligning of an organization’s programs relating to people, process and technology more directly with its business strategy and vision. This initiative moves towards an outcome-based end-state such as a dramatic improvement in customer services or a drastic increase in company profits.

The focus in Business Transformation is on discovering new ways to perform business innovatively and not on finding ways to refining or automating existing business processes.  Therefore this is a more radical re-thinking initiative than a mere business improvising exercise.  Business Transformation assessments therefore start with answering the most fundamental questions:  “Is our mission relevant in today’s world? Are business benefits of our programs aligned with that of the company’s strategy and vision?”

Business Transformation as earlier mentioned has 3 aspects to it: people, processes and technology. Leavitt's famous diamond actually went to refine this and a modified version of it actually goes on to add a 4th aspect which is strategy. The key-takeaway to this framework is that every element in each of these aspects affects every other. Business strategy is the primary driver in this framework and the other 3 aspects are governed by this 4th aspect’s encompassing role. Processes represent the mechanics of the organization, its structure and the governing systems.  The people dimension deals with elements such as organizational culture, education, training, motivation and reward systems. The third aspect, technology is to do with the use of computer systems and other forms of communication technology in the business.

The use of information technology is a major contributing factor towards achieving Business Transformation objectives. It helps enable all the other aspects of a Business Transformation initiative. In fact, several disruptive technologies are actually changing the way work is being performed. Social media, cloud computing and Web 2.0 are today’s examples and ERP systems and wireless communication were major disruptive forces of yester years.

The two biggest hurdles to executing a Business Transformation program effectively are:
1. Lack of/No Change Management: Poor setting and handling of expectations. No support from the senior management for such exercises.
2. Executing it as one-off project: No strategy alignment or long-term perspective planning and execution. No change in management thinking.

Business Transformation was an extremely popular initiative around the mid-nineties. The majority of Fortune 500 companies were then either doing a Business Transformation program or in the process of initiating one. However, it become apparent very soon that the programs executed were much less radical in nature than what was originally proposed for in the framework and that more often than not, Business Transformation became a mere way of justifying downsizing and increase managerial control. The interest in Business Transformation began to wane then and then started giving way to Business Process Management (BPM), an initiative more to do with process optimization.

Business Transformation is still a huge market today, somewhat fragmented with multiple players and growing at a fast pace. Accenture leads the pack in terms of market share and the other consulting biggies have a considerable large footprint in this space. India’s large services players are trying very hard to get into this space (as well as into products and platforms) given that shrinking margins and rising costs is killing the cost arbitrage advantages that they had. They now need to understand how to get into value arbitrage model.

Agile Debates: On Distributed Development, Talent And Metrics & Measurements

I attended the 2011 NCR Agile conference a few weeks ago. This was the second such Agile conference I was attending within an year's time and what brought me back weren't the speakers or the interactive sessions alone. It was largely the debate & discussions on different ways of getting software done right and the networking sessions where you could actually discuss potential challenges & issues on your software development techniques with others in the practicing community.

There was one such discussion I got into with one of the speakers at the conference that was to do with distributed software development. In my 8 years at Tata Consultancy Services, I had mostly worked on a distributed offshore/onsite or a multi-shore model but always using the traditional waterfall method. In my 2 years at a product startup, we used agile and always worked out of the same floor and so we never had to face the challenges of distributed agile or scrum. However, from my TCS days, I recalled that the biggest challenges we had were to do with communicating enough, communicating correctly and ensuring enough visibility for all teams across locations. And we used different techniques to make this work. For starters, we tried to enforce an onsite/offshore rotation policy so that everyone on the team is acquainted with one another as much as possible. We also tried ensuring that all victories even the small ones are celebrated and that any sincere effort never went unnoticed. However, most importantly, what really made distributed software development successful were our onsite & offshore coordinators. These 2 people could make or break the projects and in no uncertain terms were their jobs the 8-hour-a-day type. These were almost cross-functional specialists in a sense and their skill-sets spanned across ensuring operational excellence and managing client relationships and team members. I found the ones who were more good with people to be much more successful than the ones who were simple more good technically. The gentlemen I were discussing this with didn't take it too kindly. For one they were both these coordinators on a not-so-successful distributed scrum project and they were both technical leads on the project. However, more importantly, they didn't think that specialists such as people managers or project coordinators had any place on teams practicing Agile software development where the emphasis was on everyone doing everything.

I could actually relate this to 2 other speakers at the conference where while one mentioned that one of the dangers of agile was that everyone seemed to be focusing on generalists and trivializing the importance of specialists and the other mentioned that agile is simply another process of getting software done and that the process is irrelevant given that it was the outcome that eventually mattered.

The other debate I got into was to do with if developers in product companies were better at their jobs than those at service companies. This is largely true at least from what I have observed. However, the real question  to ask is if product companies are as effective as service companies. I know a zillion more failed product companies than I do service companies. If we are really smarter than our counterparts in service companies, then we should be doing much better than them at making profits. I know that this could be an apple-to-oranges comparison and that the balance sheet isn't everything but the cash reserve our top 5 India-based service companies have could put some of the most famous global product companies to shame.

There was yet another interesting discussion on metrics and measure of performance of projects doing agile. For one, collecting even simple metrics takes effort and given that the real value is in the delivery of software, should one be spending time on data collection at all? I believe that it is worth the time and that it is also best kept simple and easy to measure. They have many advantages: they help us know where we are, on what we can make further continuous improvements and help promote this transition.

This has been a long post. At the end of it all, I just want to say that continuous improvement is at the core of all this and that the process isn't everything. The process is just an enabler and we should just keep it that way. From that perspective perhaps the philosophies across most software development methodologies aren't that different after all. Its just that some have more boxes and arrows on their diagrams than the others.

On Alliances

The traditional definition of an alliance has been the following: the pooling of resources and effort across multiple entities with the objective to achieve a competitive advantage in the marketplace. However, the ability of an alliance goes much beyond that. It is to do more with the the creation and the integration of new competencies out of the already existing stocks of prior competencies held by the organizations in question.

You could forge an alliance for a variety of reasons such as for marketing, R&D, technology. design and more popularly to create distribution channels. If one looks purely at brands and marketing, forging alliances have become critical because of changing trends. There are technological changes taking place at a rapid place with increasing globalization and constantly evolving consumer needs. In today's era of globalization, partnership with local firms to distribute and sell products under the local brand name achieves gaining a foothold in the market. In the case of evolving consumer needs, an important part of marketing then becomes identifying new consumer trends and the creation of products. Partnering therefore can not only reduce time to market but also make up for the lack of innovation focus within the company.

The most commonly cited example on alliances in classroom and various case studies is that between Microsoft, Intel IBM and Apple. When the PC industry began, competition existed between Apple and the IBM-Microsoft standard. IBM created and set out an open architecture standard that allowed any other computer manufacturer to build a clone of the IBM 'PC' itself and other software manufactures to deploy software to the IBM platform. This marginalized the Macintosh platform completely and the IBM PC became the de-facto standard. However, IBM and Microsoft fell into a dispute on operating system adoption where IBM was more interested in pushing OS/2 while Microsoft wanted to launch Windows. Microsoft then formed an alliance with Intel and launched Windows. Other PC manufacturers adopted this making Wintel the dominant standard thereby marginalizing IBM completely. IBM's open standard actually then worked against IBM's favor. IBM then went into an agreement with Apple to develop its new line of chip architectural design. Eventually, Apple realized that IBM support for it wasn't as good as they would have like it to be and adopted an Intel standard. The eventual implications of this are actually yet to be seen. It may be that the Mactel standards will be more aggressively pushed out by Intel in an attempt to marginalize the Wintel standard!

Alliances are about increasing the size of the pie rather than increasing one's share in the existing pie itself but they are not without challenges. What gets in the way more often than usual in establishing successful partnerships is to do with overcoming the 'proprietary mindset'. Partnerships require one to be willing to give something in order to get something and that requires a more 'collaborative mindset' than anything else. Also over 50% of all alliances have been failures. However, the average Fortune 100 company has over 60 alliances and given that these are Fortune 500 companies that we speak of, they must be doing something right.

SMEs and SaaS

Everyone is talking about the Small and Medium Enterprise (SME) and the Software as a Service (SaaS) space today. But is there enough understanding on what IT means for the SMEs and more importantly, if the market is really that huge, then why aren’t we seeing enough SaaS adoption in this space already?

For consistency’s sake, we need to define what a SME in India is given that there is no legal definition in the country to this yet. Let’s assume this to be an entity that has a turnover of under 1 billion (100 crores) INR. SMEs then by this definition contribute in terms of value to over 50% of the county’s total exports and account for over 95% of industrial units.  Secondly, they are growing in leaps and bounds across all sectors and have been instrumental to India’s growth story. Conservative estimates have put annual growth in the SME space at over 20% across all sectors for the last 2 years.

To serve this space means to play the volumes game. The typical client will require about 11-15 licenses of the software in question. Next, the SME requires a complete pay-as-you- go model with minimal upfront investment, minimal installation time, minimal training and a solution that is completely outsourced and managed by the software provider.  They don’t want the overhead of managing an IT department. Additionally the software should be able to integrate with third party customer software as required and data migration (both in-out and out-in) should be extremely simple.

Not enough IT players understand the SMB sector completely and therefore this also makes this an underserved market.  This is mainly because most players today don’t have a SME version of their software. Their version of software is the enterprise type that is traditionally heavyweight, expensive with large upfront fees and requires a try-to-implement-forever approach.  Also what is lacking is the SME’s ability to prioritize & understand what IT can do to facilitate their growth.  Therefore there is some amount of educating required in this space.

Of Contact Centers and CRM Evolution

A contact center’s objective is to combine all customer communications to provide a consistent and complete customer experience. Irrespective of the channel that the customer chooses to pursue: whether it is via a website or a discussion forum, a chat message, a short message service (SMS) or even a telephone call, the agent needs to be empowered to experience the customer request.

The contact center today is not there with this yet and will therefore have to develop multichannel capabilities that will need to be delivered as a standard feature and not as a complex customization. Online communities support need to proliferate. Blogs, discussion boards, social networking (with special emphasis on feedback management), wikis and collaboration tools to enable customer self service. And knowledge solutions, real-time analytics and decision support to enable the agent better serve the customer.  Customer data integration is an important requirement here that will enable a 360 degree view of the customer and her/his experiences.

Lets take a look at what technology, a contact center needs. A contact center has essentially the following components to it and some of them can be rather tightly coupled with the others.

   1. The Customer Interaction Management (CIM) suite of business applications that will manage the customer interaction process. Some amount of Business Process Management (BPM) will have to be inbuilt into the CRM for workflow management.
   2. Contact Center infrastructure, not restricted to Interactive Voice Response (IVR) systems, Computer Telephony Integration (CTI), SMS and Payment gateways alone.
   3. Optimization tools for the Contact Center such as call recording solutions, back-office software, training and quality assurance tools.
   4. Analytics tools to gather business intelligence and customer insight.

CRM applications are increasingly becoming more complex. Automated proactive alerts, BPM and integration support for multiple interfaces are now becoming standard features. While most CRMs today are primarily being used for handling service requests and as knowledge-base solutions, social networking support and predictive analytics are fast catching up.

Though it is a well known fact that any hosted CRM needs to have some sort of SaaS support for it to be successful, pure-play SaaS-based CRMs still have a long way to go before they can start dominating the CRM market. Today, Salesforce CRM is available only as SaaS. Microsoft Dynamics has now gone online and offers a cloud version as well. However, SaaS based CRMs have historically worked great for low-volume and simple contact centers and therefore there is a dying need for SaaS CRMs to have more complex and customizable features.

A paradigm shift is therefore waiting to happen with SaaS based CRM solutions. Gone are the days when the contact center was only about blended solutions, simple CRMs that primarily handled service requests, and IVRs. The market is out there and the future is waiting. After all, the objective of a good Contact Center is always to enhance the customer experience, isn’t it?

Why Do Indian Tech Product Companies Struggle?

This was in the news last week: technology product companies are coming of age in India. I was just wondering, we have been a software services powerhouse for quite some time and Bangalore is even known as India’s Silicon Valley. Hell, I even worked in one of the World’s largest software services company for almost 8 years. But how come, we don’t have a lot of technology product companies that are famous enough to be recognized worldwide? I then took up a stab at this and came up with the following:

The first and most obvious answer has to do with talent. While we have some of the best and brightest engineers all right, most of them would rather work at a large software services provider than work at a small unknown product startup. As if hiring wasn’t difficult enough already, the typical Indian mentality is to progress up to a non-technical path very quickly. After all, if I as a software programmer ever told my to-be in-laws that 10 years into my job, I am still into software programming and working for an unknown product startup, then it would simply be a matter of shock to them.  After all wasn’t I good enough to become an account manager or delivery manager at a TCS, Infosys or Wipro by then, or at least a project manager at one of these companies perhaps?

Having experienced and great software programmers in your technology product company is extremely critical to building good products. While not everyone has to be a superstar, you have to have the right mix of them.  Product companies also have a very strong engineering led approach that is missing in most service companies that typical have a very strong marketing driven approach.

Secondly, we never quite had the Steve Jobs, the Bill Gates and the Larry Elisions. These visionaries were extremely important in the advocacy that was required for a market to be created. The software services industry on the other hand had people such as a Narayana Murthy and a FC Kohli.

Thirdly, Indians also exhibit another typical behavior. We are more to do with think small and then scale up. We are true conformists to tradition. So therefore most of us have never been trained to think disruptively. This is essential to building a successful global products company and Zoho has done this so well with their SaaS strategy which they did much before Google and Microsoft could launch their office products online.

Fourthly, regulation and infrastructure has still catching up to do. A 512 Kbps Internet bandwidth connection is still un-available in some of India’s tier 2 and 3 cities and even if it is, it is either not extremely affordable or reliable. On the telephony front, regulations have been a constant inhibitor to inhibition. Coming from a customer services solutioning standpoint, these 2 stand out to me first: 3G is yet to take off on a serious note and VoIP calling to telephones are still a strict no-no.

However for people who understand all this, India clearly has the cost advantage. Much lesser capital is required to launch a product startup today in India than in most other developed countries. Also if you are launching a product company in India that Is specific to Indian requirements only, which is actually a great idea to pursue given that the Indian economy is doing better than any other developed countries currently, then you need to make the markets work for you in India by adding localization to your products.

Agile for Startups

This is a simple theory: A "process" is merely the way one does their tasks. A process improvement then simply is about doing them better. Agile processes simply put are ways of working better and the iterative process enables responding to changes quickly using a business approach that aligns product development with customer need.

However, this may not be as simple to implement in the startup context. For one, most startups have the single most pressing need when they begin: they need their first client. Money talks and revenues are the clearest evidence that the startup is tackling the correct problem. Therefore the early phase startup often struggles with innovation as building to sell often takes precedence over building it well. Secondly demo-able working software is damn important and therefore shorter the sprint cycle, the better it works. A recommended sprint cycle for startups is under a week where-in feature releases are done on a weekly basis at maximum. Longer sprint cycles have been shown to actually impact flexibility. Apparently pair programming doesn't work too well for startups either, simply because it’s too expensive. Pair programming for sure brings up the quality of code to much higher levels than without it. However this comes at a cost to startups given the apparent loss in productivity amid their desperation to ship out a product and recognize revenues as soon as possible.

The importance of communication in an agile process cannot be under-emphasized and this remains an issue even for small start-ups. More so, collaboration has been a challenge for the startup that isn't naturally ready to quite adopt the agile culture which brings us to another moot point: agile processes are being introduced in startups without any attention having being given to the fundamental need for a culture shift.

A mix of the following factors typically indicates the best environment for adopting agile: a team of mature/senior developers, small teams (there are potential problems to scaling agile) and a culture that thrives on some amount of disorder.  On the other hand, a waterfall approach is best where a project is mission critical, has huge teams with a large proportion of junior developers and where the working culture is such that it requires order.

Lean Startup is a new methodology typically being practiced by the new startup and this technique combines the offerings of Agile Software Development and Customer Development using already existing software platforms that are usually of the free-and-open-source-software (FOSS) type.

This technique falls back on quick prototyping that are designed to evaluate market assumptions, and uses regular and frequent customer response to evolve faster (by evaluating and avoiding erroneous market assumptions as early as possible). It is rather common to see Lean Startups deploy code multiple times a day, using a practice that has come to be known as Continuous Deployment. One startup out there does as many as 50 deployments a day.  Focus is then thrown on the minimum viable product which then is a collection of only those features that allows for a product to be deployed (and no more).

Organizational Design For Product Companies

A good and effective organizational structure enables an organization to function more effectively and with greater efficiency. Also organizational structure differs from industry to industry and per Edwards Demming, organizational design depends not only on what the organization is doing today but also upon what the organization will be doing tomorrow.
 

For software product organizations, the organization can be divided along 3 major tracks: the marketing track (market research & marketing analysis), the product management and design track (information architecture, interaction design, visual design & usability engineering) and the actual product development track (architecture, engineering, project management, SaaS delivery & even operations).  In product companies, there is also often conflict between the marketing/product managers group and the product development group. While the former typically pushes for early releases, the other focuses on the technical integrity of the product more than anything.  Therefore conflict is built into the design of the organization itself and the absence of conflict may actually give rise to sub-optimal results.
 

Startup organizations are a little different in that they are typically smaller in size and that the personalities and individual skill sets involved actually matter more than the organization structure itself. So therefore roles and responsibilities here are even more important than the right organization structure. In fact, with good intentions aka strong organization culture, any organizational structure is workable and the organization can be designed around the strengths of individual leaders.
 

An organization template I have seen for organizations with focus on innovation and problem solving (as it is with product organizations) is team based. The management style is participative, goals are set mutually and the reward system is in the form of a team bonus. In fact, organizations that go as far as to allow their employees to self-organize and form teams have actually become much more effective and efficient. One company I know of goes as far as to have uniform mobile workstations with state-of-the-art networked computers. People here are always mobile and their office has become an environment that maximizes collaboration and execution.  Remember the ‘skunk works’ concept whose origins lies in at Lockheed Burbank? This concept is now widely used in product organizations and describes an organization that is given a high degree of autonomy and is unhampered by bureaucracy.

Of Lateral Thinking and 6 Hats

Creativity should be producible on demand and should not be left to mere chance or so is what Dr. Edward De Bono truly believes in. The creator of lateral thinking and various other thinking tools has given to the World today what has now been adopted by schools from over 20 countries as part of the their curriculum. Large organizations such as Prudential, Boeing, Siemens, Honeywell, Motorola, Eli Lily, Fidelity, NASA, IBM and Texas Instruments are wide users of the 6 hats methodology that I will briefly outline here.

Per De Bono, critical thinking has core limitations in the sense that it is more concerned with discovering what is right and wrong and less to do with movement of ideas and their creation. He takes on the Great Gang of 3: Socrates, Aristotle and Plato and speaks about idea generating tools such as random entry, provocation, challenge, concept fan and disproving. In a random entry approach, an object can be chosen at random and associated with the problem at hand. Say for example, we can choose a fax machine for designing a website better. Since a fax machine sends content to cell-phones directly perhaps the same can be done for websites that can directly send content to users via RSS feeds. The challenge idea generation tool asks why in order to generate fresh ideas. To illustrate using an example, why can't we have planes land on their heads? Though the idea may seem outrageous at the onset, it has its benefits: for one everybody would also have their seat belts on. For another, the pilots always would be able to see where they land. In fact the latter was incorporated as a design in one of the fighter plans deployed for the Vietnam War.

Lateral Thinking and 6 Hats have to do with exploration: exploration of subjects where all participants can contribute with facts, new ideas and feelings. As per the 6 hats thinking framework, there are 5 distinct states in which the brain can be sensitized that correspond to 5 hats and 1 hat is used for moderating all of these 5 states. Why hat? Because, putting on a hat is a very deliberate process. Because it is part of a uniform (a woman wears the hat of a homemaker, a mother, an executive at different times of the day). And most importantly the ego goes on vacation when you deliberately in one of these states and nobody can call you crazy anymore. Each of the hats has been given a distinct color and functionality is expressed via this.

The 6 hats are white, black, yellow, green, red and blue. White stands for paper. It concerns information or key absences of information and is used to segregate facts from opinions. Black is the color of the robe that a stern judge wears. Participants identify barriers, hazards, risks and other negative connotations when wearing this hat. This is the most powerful of all the hats but should never be overused. Yellow is the color of sunshine & optimism. It Identifies benefits and is the opposite of black. Green stands for fertility. Wearing this, participants think new thoughts for the sake of identifying new possibilities itself. Red is color of fire and warmth. Participants state their feelings and gut instincts when wearing this hat and this hat is used as a quick system of voting. Generally this hat is never used for more than a minute at a time. Blue, the last hat, is the color of the Sky. This is the hat under which all participants discuss the thinking process. The facilitator will generally wear it throughout the 6 hats discussion.

There is no hard and fast rule in hat selection and their pacing for meetings. Adapt as necessary. Meetings generally start with Blue and end with Blue. While same hats can be used multiple times in a single discussion, there are some hats which may never be chosen for a particular type of meeting. Also one can do a hat on a hat. Here are some examples of hat selections. Pace and sequence hats rather carefully. Time limits prevent participants from rambling off.
Initial Ideas - Blue, White, Green, Blue
Choosing between alternatives - Blue, White, Yellow, Black, Red, Blue
Quick Feedback - Blue, Black, Green, Blue
Process Improvement - Blue, White, Yellow, Black, Green, Red, Blue
Solving Problems - Blue, White, Green, Red, Yellow, Black, Green, Blue
Performance Review - Blue, Red, White, Yellow, Black, Green, Red, Blue

The entire idea is to go beyond criticism, pessimistic or argumentative thinking. Going beyond this is right v/s this is wrong or beyond gut feel and emotion. The objective here is to focus your thinking by using 1 hat at a time and it serves as a convenient Mechanism for ‘Switching Gears'. The framework aims to create awareness that there are multiple perspectives at hand and not be worried about speaking one's mind.

It is to be noted that the 6 hats framework is not an end in itself. Often, there are multiple iterations and detailed reports are the outcome of a session which are then further analyzed to solve the problem at hand.