The customer is now in charge

Business Intelligence BI Application Software : The customer is now in charge

In all areas of IT production, consumer and end customers have been increasingly calling the shots by DION WIGGINS AND BOB HAYWARD

With the advent of sites like MySpace and YouTube, information is getting disseminated to customers faster and more effectively than ever before. — AFP

About 20 years ago a revolution began in ICT. No one realised it at the time, and certainly no one could see the long-term consequences, but that revolution has had a seismic impact on the industry, and in just the past few years has become the most significant trend in modern technology.

Until the late 1980s, the technology industry was dominated by large computers (mainframes) used by some of the largest enterprises in the world. Companies like IBM made record profits as they sold and serviced their proprietary systems in their captive user base.

Of course, personal computers had been around for a while, and the Apple Mac was making waves with innovations like a mouse for navigation and graphical user interfaces. But these "toys" had been rejected by large enterprises, which preferred to continue using their "green screen" dumb terminals. Computing in 1987 was still very much the domain of specialist staff working in air-conditioned rooms, many of them wearing white coats.

But around that time, an interesting thing happened. Someone, somewhere, decided that the little PC they had at home, with its 80286 processor and simple but easy to use and highly productive applications for tasks like preparing presentations, doing word processing or calculating complex financial formulas, was better than the technology they were being asked to use at work. The screens in the office were boring, static and inflexible. They were like a vinyl record player next to the new CDs.

So, they did the unthinkable, and bought a PC for their office, and then had the nerve to ask corporate IT - the land of the experts and high priests of technology - to connect it to the corporate network. It came as no surprise that corporate IT refused. This was a non-standard device, it could introduce all sorts of gremlins into the company core systems and was clearly a threat.

However, as PC systems and the software that ran on them dramatically improved, and the costs came down at the same time, the efforts of corporate IT to keep them out of the enterprise became doomed to failure. The walls came tumbling down, and the user was suddenly determining their own desktop requirements - the power shift from enterprise IT to end-user had begun. The customer was beginning to take charge.

At the same time, the suppliers of PCs were experiencing a similar shift in power among regular consumers. Shoppers were no longer satisfied with the "one size fits all" products in the market. It may make life easier for a supplier to sell just one type of a product, but the increasingly sophisticated and informed consumers were asking for all kinds of options and different configurations. If any supplier wanted to stay competitive, it had to offer what the consumers wanted, even if it did make life difficult and complicated.

The revolution within the global ICT industry had started and no longer were enterprises and suppliers of technology in total control - end-users and consumers were demanding that their own tastes and preferences were taken into account. Ultimately, this revolution has only strengthened over time, until today, it is clear that the customer really is king.

At some point in the 1990s, total spending on technology globally among consumers overtook spending by large corporations. The IT suppliers recognised that future growth lay in doing what consumers wanted, and started to spend less attention jumping to the beat of large enterprises. As a consequence, R&D spending and innovation shifted towards consumer technologies, and suppliers frequently offered consumers products that were far in advance of what was used by the average company.

Starting with the PC, enterprises have fought against the introduction into their offices of a continuous wave of technologies that have their origins in the consumer market. But it has been a losing battle. Mobile phones, the Internet, PDAs, instant messaging, flash drives, desktop search tools and wireless access points have all had to be finally accepted and supported. This phenomenon even now has a name, the "Consumerisation of IT". It's where integrated technology is permeating the personal lives of people so fast that they're ahead of the technology at work. The result? Expectations are changing. People have an opinion. And their voice is loud and clear for a workplace where technology really works for them.

In all areas of IT production, consumer and end customers have been increasingly calling the shots. The furious competitive environment of PC gaming and gaming consoles has led to incredible innovations in graphics and computing power. A modern gaming console, such as a PS/3, has a more powerful micro-processor inside than even the fastest and most expensive super-computers in the world had just a few years ago. A network of off-the-shelf game consoles can be stitched together to offer computing power that would beat all but about 50 of the fastest computers in the world today.

It was consumers that started to use technologies such as Skype to make "free" Internet calls globally, a trend so powerful that the revenue streams of some of the largest firms in the world the telecommunications giants are under severe stress. And the Internet community globally, not large enterprises or even a large software firm, came up with recent web innovations such as wikis, blogs, RSS, podcasting, mash-ups and Ajax - all the underlying technologies of what is now being called Web 2.0 by many in the industry.

Of course, the single biggest manifestation of this move towards end-user driven development has been the open source family of software. Not under the control of any one enterprise or strong IT firm, open source has, in recent years, emerged as a very real competitive threat to even the largest and most powerful IT firms in the world.

The open source development community is the most striking evidence of the power of large groups of consumers working together, a powerful force recognised by leading Internet firms in recent years. Companies as diverse as eBay, Yahoo, Google and Amazon could not survive without customer interaction, feedback and willingness to share.

Sites such as Digg, YouTube, Flickr and MySpace represent the latest evidence of the power of consumers, especially when combined in large numbers through the web. The customer of today is dictating trends and determining technology adoption, and, through social networks, blogs and active participation they are shaping the very evolution of the Internet.

Consumers rule. Modern technology innovation is today driven as much by fashion, taste and design as by price, power or function. Look at one of the most amazing success stories of recent times - the iPod product line from Apple. Created and designed to appeal to the consumer market, this has now established itself as the core product of an expanding line of innovations, and all sorts of ways are being found to build these products into the fabric of leading-edge business processes and business models globally.

But as with everything, there are two sides to the coin. The consumerisation of IT is causing massive change within the global technology market. Sometimes this change can be positive, but it can also have negative implications.

Businesses reach customers constantly as part of normal every day activities via TV, radio, phone, email, snail mail, roadside advertising and many other mediums. They interact with customers directly in shops, restaurants, cinemas, petrol stations and other locations. With the advent of social networking sites and video sharing sites the information about these interactions and communications is getting disseminated to customers faster and more effectively than every before.

There are networks of people with similar interests and web sites have even sprung up to assist these people to find each other, notify each other and link with each other. If there is a fault in a product, people know about it. If bad service is given, people know about it. In extreme cases, people even video and publish the example on the Internet for all to see.

Whistle blowers can also leverage these same services to broadcast their throughts. There have already been many cases where a companies' "dirty little secrets" have been exposed. These scandals have ranged from publicity on safety defects to the revelation of unethical or even illegal corporate practices such as ordering competitors products to reverse engineer or copy them. A single employee or visitor with a mobile camera phone, when combined with the power of community and the Internet, can have a devastating effect on the image, reputation and brand of any company today.

The more scandalous the information, the faster it spreads across the world. Consider how quickly the video taken on mobile phone of the hanging of Sadam Hussein circulated was made available online and the millions of times that it was viewed on sites like YouTube. Consider the panic caused by false alarms sent during the SARS epidemic in 2003 when a message was sent via SMS about a false Web article stating that Hong Kong was closing its borders.

Sadly, few enterprises have even a basic understanding of these concepts and operate with blind sensors. Good business intelligence systems are able to alert the business to both problems and an opportunity. Businesses should consider some of the possible or even likely events that could occur and come up with a plan to respond. The analogy of an airline company provides a great example of how this works. No airline wants a disaster such as a plane crash on their hands, however if such an event occurs, they have a plan ready to execute that addresses the issues to minimise the impact on the business and to deal with the families, passengers, media and employees in an appropriate fashion.

Enterprises should also have a plan to deal with any attacks on their brand. They need to deal with customer feedback being broadcasted for all to see in such events as system down time, data loss or privacy breeches. Enterprises need to determine in advance the best way to respond to such incidents.

They also have to be ready to use the same networking concepts where appropriate to defend and restore their reputation. Messages and information will need to be made quickly available to the right channels and locations.

The key for businesses is to understand how to harness the power of community networks, to build trust by being a positive contributor and build knowledge by being part of the network itself. Abuse of the channel will also be a reality, but in today's world where the customer is truly in charge, reaction is swift, angry and merciless.

Some industries still fight the old fight against all of this technology disruption and the recognition that their customers are increasingly in the driving seat of business development. They have failed to learn from history that resistance is futile in the face of technology innovation.

It is better to learn how to embrace the change, how to change your business model, no matter how painful, in order to thrive and prosper. Hollywood and the global music industry have been the latest to put up a struggle, but all signs are that even they now know how to adapt and survive in the age when the customer is in charge.

Dion Wiggins (dion.wiggins@strat-etech.com) and Bob Hayward (bob.hayward@strat-etech.com) are directors of Strat-etech Consulting and provide hard-hitting, unbiased, objective and independent advice, consulting and mentoring for enterprises operating in the dynamic technology markets of Asia.

Source: Business Intelligence BI Application software information at Bangkok Post