Courting the Customer

In the third wave of globalization, business does not even seem to have to act like a traditional business any more. Look at the way Richard Branson's Virgin Mobile became the 10th largest mobile phone provider in the US, by forging relationships with Sprint PCS to host their mobile connections and deploying smart integration software to connect their business processes to Sprint's real-time operational systems.

The The Real-Time Enterprise examines in detail how Branson, acting as his own empowered customer, cut a "co-opetition" deal and used process technology to interoperate CRM systems and record-keeping systems with the real-time operational support systems.

"We've been talking about customer-driven companies ever since the dotcom era, but now if you really look at the bottom line all you have as a company any more, because of globalization and commoditization, is to become a totally customer-focused company," Fingar says.

"I believe what's going to happen is that businesses have to realize that the only thing they have left really is the customer base. They have to get so tight to their customers, like Zara the clothing manufacturer out of Spain. They make clothes for 10-year-old girls so it's all high turnover quick fashion stuff. And Zara is able to take a new design from feedback from the stores and turn out a whole new little fashion and have it on the shelves in 10 days.

"In order to do that you are going to have to aggregate more and more products and services for your existing customer base. And the only way to do that is with [BPM]. So that's the point I want to be making in the book; it's really describing not so much the technology but describing instead more about the business models. You know Exxon Mobil the big oil company is now in the gourmet coffee business. They have all these retail outlets [petrol stations] and since Starbucks made expensive coffee so popular here, one of Exxon's replies has been to make a big push to get into the gourmet coffee business. There are just numbers of stories like that which I want to put together and then focus on each of the key variables, like the extreme customer who can demand what they want, extreme supply chains and so forth."

Cumulative Effect

That intense competition is, of course, being both enabled and driven to extremes by the empowered individual. And one of the best ways to reach the customer is not just provide them with a product but a service. Indeed GE, once seen primarily as an aircraft engine and light bulb manufacturer, now makes more money in services than products.

In Tampa, Florida, for instance, Fingar's home state, when GE's medical division installed a vast array of high-tech equipment for a new heart hospital, the hospital staff lacked the Six Sigma qualifications to manage and maintain it. As a result, GE's service contract has made the company effectively a part of the hospital. "GE is part of the hospital. Its people are on the floor. They are the customer. And so when you're at that level of getting close to the customer, that's how you stay ahead. You are the customer," Fingar says.

In the new environment, branding will be among the most critical business variables; the other will be to use intellectual property and patents to keep you ahead of the game. "In other words, this notion of having a core competency that you are unique in is something that companies are going to have to sharpen much, much more," says Fingar. "Take a large company like General Motors, which is hurting right now. It's such a big bureaucratic monolith that it just cannot compete with its more nimble competitors.

"Survival is not just about innovating something, because once you innovate, people can catch up with you faster today. And so the notion is that you must not only innovate, but once you've done [it] you need to set the pace of innovation thereafter, just like [the] Nokia-Samsung kind of situation.

"The whole notion of being able to set the pace of innovation in your industry becomes a radical thing that you have to be able to do, otherwise you immediately get commoditized."