Growth remains a top priority for CEOs. Revenue growth and increasing market share outstrip lowering the cost base as strategic priorities. Enterprises seek to deepen their penetration in home markets, and enter new markets.
Unsurprisingly enterprises are looking to sharpen their customer focus as a way of attaining growth. Much technology investment is being targeted at front-office areas as CEOs see greater opportunities for return on investment from customer-facing IT investments than back-office investments. The challenge for CIOs is to understand in detail their enterprise's growth strategy, and focus on supporting it.
To be customer-centric, the IS organization must be flexible and agile and able to respond quickly and efficiently to customer needs
This fact alters the focus for the CIO. "To be a successful CIO you have to know where to focus. The bottom line is we are in business to make money, and that money comes from our customers. Everything you do has to begin and end with the customers, otherwise you shouldn't be doing it", as one CIO of a multinational put it to us recently.
To be able to focus on the right things, you have to know what your enterprise's customer-centric strategy is. Here the work of management gurus Michael Treacy and Fred Wiersema in their book, The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market (HarperCollins Publishers Incorporated, 1997) can help. To grow, these authors describe the three and only three strategies that enterprises follow.
Product leadership. Enterprises concentrate on offering products and services that push the performance boundaries. Their proposition to customers is to offer the best product or service, full stop.
Operational excellence. Enterprises that pursue this are not primarily product or service innovators, nor do they cultivate deep one-to-one relationships. Their proposition to customers is simple: low price and a hassle free service.
Customer Intimate. Enterprises focus on delivering not what the market wants, but what specific customers want. Customer-intimate companies do not pursue one-time transactions, they cultivate relationships. Their proposition to customers is: We have the best solution for you, and will support you to achieve optimum results.
Organize IS to fulfil the customer growth strategy. "Most companies are organized for the convenience of their management and not for the convenience of the customer," says Jay R Galbraith, senior research scientist at the Centre for Effective Organizations at the University of Southern California. Instead, an enterprise should be organized according to whether its customer strategy pursues product leadership, operational excellence or customer intimacy.
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