What kind of enterprise are your corporate leaders building and designing for the future? Are they building and designing a functionally centric, a product centric, a process centric or a customer centric enterprise? These are questions that I frequently ask my students in the Business Architecture (BA) classes that I teach for the BPMInstitute. Most assuredly, everyone answers the question “the corporate leaders want a customer centric enterprise!” But then I also ask, “What kind of enterprise do you have today?” Here is where it gets interesting since most likely, the students’ responses are quite different! For the purposes of this BA article, I will briefly classify enterprises into one of four types:
- A functionally centric enterprise usually focuses on internal organizational structures.
- A product centric enterprise generally provides minimal services with products.
- A process centric enterprise may fixate on how products are provided.
- A customer centric enterprise puts customers first.
Some may prefer to critique the exact wording of the above, and that is okay! However, the significant differentiator is that a “customer centric enterprise puts customers first,” above the internal corporate organizations, functions and politics. Customer centric enterprises define their results and outcomes in customer terms. As for a very simple example, the expected and desired result of an order placed by a customer is defined as received from the seller or supplier on the promised date and fully operational. The outcome is that the customer continues to buy again and again since they are satisfied or delighted with the product delivered by the seller’s enterprise. This result is defined in customer terms, and it speaks very well for the customer centric enterprise, too! A functionally centric enterprise might define success as having shipped the customer’s order from the factory by a specified date. Perhaps this is a good measure of success for the shipping department, but the customer may not really care when their order is shipped, but they do care when it is received by them and that it is operational upon receipt.
The Business Architecture is a customer centric model of the enterprise. The organizing principle for a customer centric enterprise is the value stream. The value stream is defined as an end-to-end collection of activities that creates a result for a customer and it has a clear goal: to satisfy or delight the customer. Value streams were clearly defined by James Martin in his book The Great Transition and are commonly used in Six Sigma and Lean Manufacturing. One of the compelling reasons to undertake a BA initiative is to evolve and progress to a more customer centric enterprise. This is achieved by defining and integrating the enterprise value streams and measuring its success in customer terms. And then by the way, you have to continually improve and enhance the value streams in order to beat the competition, expand market share and make customers even happier.
Now, consider this point of view. If you are building a blueprint of the enterprise based on functions rather than value streams, you will not have the view of the customer in mind except for the few processes that actually deal directly with or influence the customer. As for the other supporting and enabling processes that require integration across the enterprise to deliver customer results, the customer’s view is hidden or obscured since they are not directly aligned and linked with the customer’s view. At best with this view, they are casually associated, perhaps even disconnected from the customer all together. This is an unfortunate consequence of functional thinking and a functionally centric enterprise.
Most enterprises today are NOT customer centric. Some may think this is a provocative statement, but in reality, it is reasonably accurate. Many companies have call centers and customer focused organizations, staffed by customer service representatives, all supported with state-of-the-art CRM software, but they are still not customer centric. In some cases, companies have outsourced the call center function to third world countries because it is much cheaper, not because outsourcing delivers “better customer service at lower costs.” Think about it; one of the most important relationships with the customer has been outsourced simply because it is cheaper. This behavior has consequences for the enterprise!
Take another situation for analysis. An enterprise produces a modest variety of products. For products that are broken or not working properly, the customer is advised to call the service center at 1-800-we-fixit. The sole and only purpose of this 800 number is to help fix customer problems with broken products and nothing else! Think about this next question! What is the best and most important measure of success in customer terms?………. Many will say things such as “resolving the customer’s problem in a timely manner,” “getting a customer service person as quickly as possible,” or “treating the customer politely.” While these are important, none of these responses best answer the question. The most important measure of success in customer terms is “not having to call 1-800-we-fixit in the first place, because the product is working as promised and not broken!” A customer does not want to call any 800 number; they just want the product to work.
Declining 1-800-we-fixit calls is an excellent measure of success in customer terms, and also by the way, a most admirable goal for the enterprise and its call center. This is achieved by integrating value streams in a Business Architecture. Obviously, the call to 1-800-we-fixit indicates a problem with the product. The call center representative must solve the customer’s problem, capture information about the problem during the call, and provide feedback for value stream analysis. It could be a manufacturing problem, a quality control problem, a raw materials problem or any such similar type of problem. To fully understand, resolve and most importantly prevent problems, the enterprise must research and analyze all of the integrated processes that lead to broken products and the call to 1-800-we-fixit. The Business Architecture “by design” provides this enabling capability. This is the purpose of the integrated value streams of the BA. Improving enterprise performance is paramount for customer success and enterprise success as well.
Developing a customer centric Business Architecture and integrating the value streams is important and necessary, but that is not its singular purpose. One must use insightful analysis and meticulous examination of the Business Architecture to chart the unknown possibilities of new products and services, seeking to find undiscovered opportunities that will delight customers and deliver a competitive advantage.
