Michael Maoz

My last blog brought out the brickbats from IT professionals who, to a person, said, “Hey, don’t blame us: we’re powerless.” Funny enough, I took that point of view when I wrote the piece the first time. Then I thought of the calumy that would be heaped upon my poor head. Dare I say IT is powerless? That it lacks authority? That it is not tied to business decision makers? Yikes, not me. Yet when the comments started flowing in like a malignant red tide of phytoplankton on a Florida shore, I saw that my original tack was the right one. Of course we were only doing our jobs in identifying the analytical systems, and then deploying them. But the actual business itself isn’t in our hands, and we don’t really have a say. The business leaders are the source of power, and we are their foot soldiers.

I’ve been experiencing that a lot while moving into a new home and area. The simplest act of changing telephone numbers has unleashed a barrage of telemarketers because my 31 days of waiting for the National Do Not Call Registry hasn’t kicked in. I have telemarketers asking me who I am. I am polite and say, “umm, you called me: who am I?” And then they ask, “Do you have an account with AmeriCredit?” To which I ask, “What’s an AmeriCredit?” This plays out for newspaper subscriptions, oil heating, carpentry services, insurance brokers. When you ask them to get me out of their dialer systems they say things like, “I cannot stop it sir, it’s out of my control.” And when I ask suggested an easy fix to a problem on the website at the cable provider, the woman became perplexed and anxious, repeating over and over another time that she was just the service agent for new installations. Not billing, not website, not tech support, not, not, not.

Just when you thought the knowledge worker title really meant something, you realize that most tasks that most workers do are still extremely siloed. Spans of responsibility are narrow. Integrative processes are still a far off dream. Independent decision making and action-taking is still an aspiration, while consumers experience the perspiration.

Here’s to a US Independence Day for the IT managers, customer service reps, tech support experts and everyone else trying there best to serve the enterprise, and serve the customer, only to be stymied by senior management too focused on sweating out profit while the customer walks away or cringes.

The analysis from consulting firms, the business blogs, the Press reports and the tomes from academia are all looking back at the past seven years and explaining how it was that the planet fell into the economic mess that we are now experiencing. In November of 2000, my good friend David told me to get out of growth stocks and move into gold (of all things). I didn’t listen, of course. Later, when it turned out he knew something I didn’t, I took his advice and made sure that I invested in some of the things he was doing, and when he told me that housing was an asset bubble just like the stocks he’d suggested dumping, I made sure I was in bonds and treasuries. I know nothing about economics. But I didn’t claim to see around corners with my software, either.

Where has all of our IT investment in data mining, analytics, forecasting, and measurement gotten us? Did it help your company anticipate trouble? Has it cushioned you adaquately from current conditions? Is morale higher in your workforce now than before the massive IT investments? Do employees have more leisure time?

Is it time that you broke out your Thorstein Veblen work, “The Theory of the Leisure Class” and gave it a re-read? In a vibrant service economy, more and more people made more and more money not based on their labor, but on their ability to extract money without producing anything whatsoever - by creating instruments to ‘leverage’ in the form of derivatives and loans and swaps and esoteric funds and buyouts: things you can’t eat, or build with, or wear, or travel in, or manufacture with. And many of them made billions taking their slice of the fictional wealth and profits that they conjured.

And how, exactly, did IT track, identify, perceive, illustrate, communicate, or work to prevent rotten loans and false premises about future growth and profit and shaky forecasts? Or predict that tour faith in the systems that created the profit and wealth was quixotic? What we are now reading are all of the post-mortems where the pundits decompose the steps leading to the crash and unemployment and systemic piling of new debt. Timing is everything, eh? Maybe we all get to enjoy a period of humility within which we acknowledge the narrow scope of how technology helps us understand the most-likely future. It has been a great force in streamlining and standardizing and optimizing processes, but IT is still a long way from acting as an accurate predictive tool guiding business leaders away from turbulent waters.

Maybe we will see a new generation of tools that look at business pattern sensitivity and give all of us the warning beacons that keep us off of the rocks.

The joys of home ownership. Mortgages, cleaning services, lawns, plumbers, roofers, electricians, carpenters - it’s like you have hooked up a powerful vacuum cleaner to siphon off your cash from a declining asset class. But it does give a person a view into the world of consumer retail operations from the outside. It’s not that pretty. When I was a kid there was really only one big retailer for appliances and tools. They were ubiquitous in physical stores and catalogs. And here we are a few decades later and I am looking for a water filter for one of their refrigerators.

Full disclosure: I didn’t even know the machine had a water filter. Pure water arrived magically, until I noticed one day an LED that said “0″ next to level, which led me to read the words aside the ‘0′ level, and it said ‘water filter level, replace when below 10%.’ Smart refrigerator. Off I went to the manufacturer/retailer website (I didn’t know if the Brand Name meant the retailer manufactured the equipment, or sold some other manufacturer’s product under their name.

There it was: the search engine. I was hopeful and typed in the words X (brand name, make and model) refrigerator water filter replacement. The search took me to the section of the site for appliances and asked me what type of filter did I want? Lawn mower? Vacuum cleaner? Washing machine? Swimming pool? Air conditioner? Refrigerator? Hmmmmmm, let me see, when I typed in X (brand name, make and model) refrigerator water filter replacement, wasn’t that giving them some indication of my intentions?

So, I found the ‘part’ eventually. But as an analyst, I had to go out to Google before buying online from the retailer. Wouldn’t you know it? When I dropped in “X (brand name, make and model) refrigerator water filter replacement” I was given a page on Amazon.com immediately where I could get two filters at a 16% discount, plus free shipping, with one click shopping. Who loves me? Who knows me? Who understands my intentions immediately? Is it the company who sold me the machine, delivered and installed it, and with whom I have the warranty? Or is it the ‘anonymous’ online retailer who through almost alchemy divines my exact intentions and rewards me for participating in a social network with genetic learning algorithms?

Social networks, blogs, communities, reviews: this retailer has them all. But the basics of what I want, and how to expedite that search and purchase are missing.

As I listened to the US President Barack Obama answer questions about healthcare reform Wednesday night on television, my mind kept going over the scenarios from my own family: on forms submissions, claims to insurance companies, incorrectly-cancelled services, failed notifications, denials of coverage, faulty claims codings, failures to inform or support - that my family of five has been on the receiving end of over the past 11 years.

How many countries with the standard of living in the US could claim to have the complexity of forms and procedures for health issues? I just tried to execute a simple change of address. I couldn’t even proceed on my insurer’s website until I logged in, even though the question I had was simple: how do I change my address in the system? I used the search engine and the knowledge base, but received three utterly irrelevant choices. In frustration I called the customer service folks. After flailing around in an IVR for six minutes, I punched out to a ‘live agent’ who told me that only my employer could change an address. No worries. I asked if there were some way she could make a note to the people who do Q/A or FAQ on the website. Her answer, “No sir, because we don’t handle address changes: your employer does.” OkeyDokey.

One of my daughters had her wisdom teeth extracted in two sessions. In the first, the procedure was covered. In the second it was denied. Huh? After four phone calls it turned out that one wisdom tooth (or maxillary and mandibular third molars for you purists) which was impacted was assessed by the outsourced medical technician to no longer fall under the category of “dental’ insurance” but ‘medical’ insurance. They denied the claim. No, they did not know of the other extractions at the time of assessment that were accepted as ‘dental.’ Did it all work out? Sure: after denial of claim, clarification of problem, resubmission of new claim to medical, and, of course, calls to my company’s HR and my physician.

Has anyone ever tried to add up the billions and billions of dollars that are wasted in lost time, duplicate forms, and extra personnel?

So there I was, listening to the President and imagining him completing another medical form, waiting on hold, and discussing North Korea’s missile threat. There’s got to be a better system.

After 11 years living in the United States, I moved homes. There is a lot to learn about deceptive business practices from realtors and bankers, and about insurance companies that automatically raise your rates because you have a less-tony postal code (but 11 years without a claim).

What really struck me during the move was the gap between what happens to a customer and what the average CEO thinks happens with and to a customer. I advise businesses on social networks and media, on CRM and customer experience, and the technologies and processes required to improve customer relations. Then I interact with these same businesses as a customer and marvel at the disconnect between board-level talking points and the real world.

Alright, you ask, can I give you one example? I’ll use everyone’s favorite: the Cable Guy. Nothing could be simpler than to install cable TV, internet, and IP telephones - the lines were already running into the house. Ah! Those lines (snip, snip, tuck, hide) - Cable Guy needs new ones. Can you feed the cable through an empty wall space? “No, sir, we only drill new holes and run everything along external walls and internal walls.” I ask: “but can’t you take off this electrical cover? It’s where the old cable came into the room.” Cable Guy answers: I can’t unscrew a cover.

After a break, and talking to his supervisor on the phone, he comes to hook up the internet. I mention that he skipped a television. Cable Guy says, “I can’t hook it up, it’s in a box.” I ask him why he didn’t just say that rather than skipping it. Cable Guy says, “We don’t do that.” Then I notice he’s hooked the cable up between the cable box and the TV, even though there is a DVR in between. I ask Cable Guy if he could hook it up the way it will actually be used. “We don’t do that. We just check for signal.”

Then the internet: Cable Guy sets up the model, and I connect it to the phone, and he asks me to sign the paperwork so he can leave. I ask him, “Don’t we need to make sure the internet is working?” Cable Guy says, “No. You just fire up the browser, and if it asks you for an order number, just put in this number.”

Now Cable Guy was moving fast. Out the door and gone. I tried to “fire up” my browser. Nope. Reboot. Nope. I called customer service, but ‘unusually high call volumes’ kept me on hold eight minutes, and then the line went dead. I call again. Nine minutes, and the line goes dead. Then I get through. Customer service puts me onto Technical Support. She sees nothing wrong. Technical Support transfers me to Billing. Billing has no idea who I am or what I want. This is a system that would challenge anyone except the Buddha. Billing gives up and says I need Technical Support. He has no idea I’ve spoken to Technical Support.  At this point I am the peanut vendor Sebastion Dinwiddle talking to St. Louis Wolves manager Dexter Broadhurt in the Abbott and Costello comedy skit, “Who’s on First.”

(Guess how you can resolve this issue? Go onto the cable company’s technical website and use the technician’s ID to log on from the order form you signed. Then enter order number, MTA MAC ID from the box, and work description and “Enter here to complete technician work order.” Whatdya know? The technician probably hadn’t yet processed your order. I’m thinking lunch takes precedence. But don’t do it - it’s likely not kosher.)

The moral of this banal tale (which is played out in many guises by customers in multiple industries, every minute of every day): you can Twitter, and you can post, and blog, and poll, and vote - and so can your management. But it is hard to soar like an eagle when you flock with domesticated turkeys. We need our feedback systems in order, and to tramp along with the customer, and listen, listen, listen to the communities, both formal and informal.

Get out of the office a bit more and live the customer’s life.

In the ancient myth of Daedalus and Icarus, the father and son try to escape Crete with the secret of the labyrinth, but need to avoid travel by land and sea because king Minos controls both. So they decide to build wings and take to the air and fly. It all looks beautiful from so high up, and it looks like they will both make it, when Icarus (the son) ignores his father’s advice and flies too high. His wings are destroyed and he plummets to earth.

Enough of the mythology - who needs it when you can observe the equivalent played out in CRM projects. The cool new thing, as yet untarnished and still so full of promise, is social networking. Fixing the processes on the existing channels has been really hard. As we’ve added more and more channels, figuring out how the customer is experiencing our enterprises, and understanding their intentions and expectations have turned out to be tough. It has been difficult to agree on a system of record or to agree on what constitutes the master customer data that must be available to the enterprise and to the customer. A lot of businesses have pulled back on these customer-centric projects. But now these same businesses are pushing forward into social networking. New people are in charge - often times from marketing.

It is great to see the innovation that social networking is opening up. At the same time, we are already beginning to see confusion regarding the expected business benefit of such endeavors. How do they contribute to business value? How do they boost sales or trim costs or create loyalty? What are the metrics we are trying to improve, and who is in charge of collecting and analyzing the data? Who is responsible for driving process change in sales and marketing and logistics? How many resources need to be dedicated?

Social networking has the huge benefit of requiring practically no IT budget, allowing lines of business to skirt IT and engage in fast, interative projects. The negative side is that the learnings may not find support in the business software that guides conformance to standards and consistency of sales process, service process, or marketing process.

Once an initial facility with social networking is achieved by marketing, it becomes time to reach across departments to work collaboratively with sales, service and IT to improve business processes, or the result ends up being a new set of frustrations that damage customer relationships.

In a round of client visits that took me 17,500 miles in eight days, and to meetings with over 75 businesses over five time zones, I saw experiments with Twitter, SMS, FaceBook and Wikis that laid bare the huge gap between where businesses want to be in engaging customers, and where the major business software application vendors are in providing solutions.

Most of the major vendors who grab the attention of CIOs are serving up commodity functionality while renovating the technology stack. From a CRM process perspective, they have fallen far behind what businesses and their customers expect. The good news is that there are terrific innovations going on a companies such as Telstra, the Australian telecom provider, Dell Computer, Unilever, and Kraft Foods. They are not waiting for their application stack provider to point the way.

And here is the interesting thing: in about 85% of cases, the innovation springs from the line of business, and not from core IT at all. Core IT did not come up with the idea, sanction the project, or fund it. The new technologies and applications are easy to source and easy to deploy and easy to use. They are cool, yet so far lack process design capabilities and are outside of the business process. The next step is for the innovators in customer service, marketing, logistics, and sales to make sure what they are doing is consistent with the business as a whole, and for IT to gain a facility with the new tools out there. Right now it is like the US Gold Rush in the mid 1800s: some people will benefit, while others will come up empty.

Buyers of goods and services have certain intentions in mind when they establish a business relationship with a business. In the case of health insurance it is to stay insured in time of need. You think that is obvious as an unbiased outsider, but most insurance companies breaks the implicit promise in their relationships by failing to act on this intention. Why do they do this? Because their intention is to optimize profit, and it influences (read: dominates) how they design customer processes.

The same is true in the Credit Card business. Last month I received my monthly Account Statement and it stated as “Balance Due” a credit of $678.84. Good for them: I overpaid. I usually submit payment early for reasons I won’t go into. OK, Saturday night I opened my new statement and not only do I owe about $6,000 (business trip, mostly), but there is also a penalty for late payment. Huh? Previous statement = credit, current statement = late payment fee?

I will not bore you with the details of how this happened, because each of us has their own story. But here is my point: did a bank or Credit Card issuer ever think of pro-active notification of impending late-fee? In the airline industry you can set up an alert, just like in a half dozen other industries. Did a bank or Credit Card issuer ever think of contextual help so you could see WHY an event occured on your bill? Do they think it is the intention of someone who pays on time each and every month for 48 months to suddenly NOT submit payment on time? Do they care?

Great institutions are adopting an ‘intent-driven’ approach to process design, aligning their need for profit with your needs for goods and services, and this is a thrust of our research both current and future. In the meantime - before you design another customer-facing process, think about how it might fulfill or not fulfill the basic intentions they have in doing business with you. Otherwise all of this technology networking you to the customer is the antithesis of social: it is anti-social.

Watching the Google Waves from the near distance, searching Topsy for something about Turvy but knowing only Bing would understand my true context, I listened to Mahler’s cowbells and mandolin in Symphony #7 and waited. Yeah, it sounds nuts, and it is pretty spacey. Just like when I am on a conference call with a large group of folks, and one voice on the line, not on mute, but wishing later that they had been, starts talking about the divorce papers or house closing or lawn care. Or the errant email messages destined for anyone but me, and poorly thought-through Tweets capturing fragments of thoughts. Or the utterly bizarre search responses from a search engine.

Here is the thing: I’m reading whatever I can about the evolutionary impact of social networking tools and search engines on the brain. Maybe we can evolve more quickly than I think. Until then here is a thought: many of the folks you are interacting with over the internet or telephone are using a very shallow knowledge augmentation not dissimilar to Kevin Spacey’s character, Verbal Kint, in the movie The Usual Suspects. If you saw the film (and if you haven’t, you are missing a treat), Roger “Verbal” Kint is under police interrogation, and over the next several hours spins an incredible tale that grabs the detective. Of course, Verbal has just been reading random quotes and headlines and receipts off of the wall behind the detective’s head.

Yes, all of these search and communication tools are very cool, and very powerful, but a dolt is still a dolt, and a dilettante is still going to have only the most tenuous grasp of a subject - but they sound ever more informed because with the click of a button they can call up arcane facts, or Tweet out to their posse and find an angle.

I’d still encourage expertise over the clever. Stick with Alexander Pope’s dictum, “A little learning is a dangerous thing, drink deep or taste not the Pierian spring.” (Pierian: a well of knowledge, from the Satyricon of Petronius. And YES, I googled that.)

I didn’t blog while travelling. It was a more than full time job to listen to clients as I went from country to country and city to city, meeting IT and business executives from over 85 non-US and non-EU countries. About 2% of them use software as a service according to the Gartner definition. They asked sharp questions about the economic benefits of SaaS over outsourcing a business service or outsourcing or hosting their business applications. There is a big impression out there that the primary beneficiaries of this efficient technology model, so far, are the software companies themselves who have created elegant architectures and keep most of the financial benefit to themselves. There were intense questions about the true total cost of ownership for complex installations. Simple/static activities like most of the activities of sales personnel, or survey tools, or HR applications were understood as candidates for SaaS. But what about core functionality in banking or insurance? What about large scale, mission-critical, highly integrated / interconnected call centers? What is the true TCO? What about where there is a need for business process?

There is much more on this in our research, but for SaaS to go from straight-forward, non-industry specific tasks to a software system that handles complex operations at a compelling return on investment to the end user organization, the jury is still deciding who the true beneficiaries will be. This was especially evident in the repeated questions about ‘who owns the data?’ and ‘how much of my data is available in real time?’ and the cost for various forms of SaaS (isolated infrastructure / data / applications, simultaneous multi-lingual usage….). There isn’t much transparency in the market about the true five year costs of different models, nor much of a track record of vendor-viability.

And the connection between Cloud and Saas? There was mostly eye-rolling and empty looks. Some didn’t know, and the rest weren’t sure why it mattered today. We are earlier days than is often thought on both of these topics.