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Published 24 January 2013 01:28, Updated 27 January 2013 17:24
New leaf: Dymocks CEO Steve Cox is considering adding in-store touchpoint computers to help customers search Photo: Sasha Woolley
The biggest technology problem for CEOs in 2013 may be penetrating the proliferation of buzzwords to extract kernels of wisdom. Terms such as “big data”, “consumerisation of IT”, “BYOD” and “cloud computing” are on the lips of every technology vendor. Of course, it pays for leaders to know the lingo but it boils down to using technology to deliver better insights into customer behaviour and improving productivity.
Trends such as big data have been building for some time but the technology industry and business community is expecting their implementation this year. For businesses still on the sidelines, it’s time to put theory into practice.
The Commonwealth Bank has been doing this for some time – the bank is a corporate leader when it comes to implementing new technology and was recognised by BRW last December as the second most innovative company in Australia. The bank has moved large amounts of infrastructure to the cloud via Amazon Web Services and invested in technology to deliver customer benefits such as mobile and social banking apps, real-time transactions and analytics tools. CommBank’s chief information officer, Michael Harte, says technology is important, with “lots of productivity, lots of implementation and lots of fun”.
Harte is in equal measure evangelical about the benefits of technology such as cloud computing and scathing of misleading claims by vendors. While he welcomes the fact that technology is now a core function, he says this can be a pitfall if business units make their own software decisions.
“Business units tend to want to buy software as a service but they may not talk about that with their IT people and without the longer-term thinking, there can be implications for the total cost of ownership,” Harte says.
He argues that a major technology trend this year will be a shift to cheaper, faster deployment by using so-called “agile” software development – where small teams make iterative software improvements daily rather than the traditional “waterfall” model where software is designed, developed, tested and then released.
CommBank used agile development for its foreign currency capability in smart phones and the Kaching mobile payment app. “We’ll see increased dependency on agile development to give lower cost,” Harte says. “If you can take 30-40 per cent out of the cost and deliver infrastructure and platform services with 30-40 per cent more productivity, that’s a huge contribution to value.”
Dymocks managing director Steve Cox sees the rise of mobile and data analytics as the biggest technology trends. The company is tendering out its website and a key part of the brief is optimising it for mobile devices such as smart phones and tablets. Cox is also keen to use technology to enhance the in-store experience, such as self-service touch points in stores so customers can find more information or order books not in stock. Dymocks has a smart phone loyalty app and is trialling mobile wallet payments, with plans to roll it out this year.
Dymocks has been selling books online for seven years but Cox says the website is not just a sales channel but a core part of a multi-channel experience that can deliver rich content such as podcasts and videos of literary lunches. “About 40 per cent of physical store sales are researched online first,” Cox says. “We’re interested in the website not just as a transactional portal but for communication with customers and driving them into our stores.”
With more than 700,000 loyalty club customers, Dymocks has a lot of data. For Cox, 2012 was about making technology investments to better analyse this data and provide a single view of the customer. He expects the business to reap the benefits in 2013 with more targeted marketing. “We already do it but we’ll be doing it at a more sophisticated level,” he says.
There has been a lot of hype about big data – marrying the structured data in internal databases and customer relationship management (CRM) systems with massive unstructured data from social media and public sources. Cox says Dymocks uses external data, working closely with Roy Morgan Research, and is considering economic forecasting and external customer surveys. But the richest data is its own.
In 2013, many businesses will move from merely thinking about big data strategies to implementation. One problem they may face is a skill shortage. The technology industry is working with universities to try to plug that gap.
EMC country manager for Australia, Alister Dias, says the explosion of data can seem overwhelming – EMC’s statistics say the digital universe will reach 40 zettabytes (ZB) by 2020, a 50-fold growth from the beginning of 2010. “The thing to remember is that it’s possible to start small or with a one-off project,” Dias says.
The managing director of consultancy and research organisation Fifth Quadrant, Catriona Wallace, is working with companies such as insurance group NRMA on big data strategies and says the biggest opportunity is to better understand the customer experience. She is blunt about the failure of customer relationship management software alone to unlock those insights.
“CRM hasn’t been successful – all it’s done is move us from mass production to mass customisation,” Wallace says. “CIOs are starting to see the customer experience metric in their key performance indicators and they now have the technology to enable a strategy – but they don’t have the strategy. In future, companies might have a chief customer experience officer, a role that doesn’t exist yet but absolutely must.”
Wallace says that to solve a typical problem, it costs $3.80 per interaction for web self-service, $4.50 for touch-tone menu phone calls, $14.90 for a human voice at a call centre and $16.90 via email. The problem with pushing consumers to use cheaper channels is that these often don’t solve the problem first go and they then have to move to another channel. On average, customers use 3½ channels per inquiry. While consumers say they prefer a human voice, followed by web self-service and then email, Wallace says 60 per cent try to solve the issue online first. “This tells us is that businesses should invest more in web self-service.”
The phrase “consumerisation of IT” is often used to describe the trend for business technology to become more like consumer technology in terms of the user experience. This is driving the trend to BYOD or “bring your own device” where IT departments support a range of mobiles and tablets, not just one company-approved model. It’s also driving companies to adopt business-oriented social networking platforms such as Yammer or IBM Connections instead of old-school intranets – Dymocks is looking at options to help its 2500-3000 staff to stay connected.
Technology is both the great disruptor and the great enabler and it’s a core part of every business. Just as it’s essential for the chief information officer to understand the business, so too the entire c-suite needs to upgrade its IT knowledge.
The challenges are huge but so too are the opportunities. Failing to give it a go is not an option if businesses are to remain competitive.