Serving the customer!
Corporate purpose?
The Vienna-born pioneer of modern management theory, Peter F. Drucker, used to say: “The purpose of a company is to win customers and serve them.”
Many managers understand this. Few act on it. When under observation, they behave more as if their real purpose is to maximize returns. The resulting pressure leads to a reactive ‘being driven’. That means wanting to make a profit quickly. And this often happens at the expense of product quality, leads to a reduction in services, price increases or other strategies to put customers under pressure. Short-term business activity thus undermines long-term trust in a product and the brand behind it or reduces the value that an organization creates for its customers.
The connection with SIAM
So far, so well known. The challenge related to SIAM becomes more visible when we bring the concept of trust into play. Trust is the foundation of any relationship and the resulting customer loyalty is in everyone’s interest.
Nevertheless, we often see decision-makers, especially in the outsourcing of IT services, who continue to give priority to the dictate of reducing costs in favor of short-term operating results over building and maintaining long-term customer relationships.
In our experience there are several reasons for this:
- The common power structure between IT management and those who decide on budgets in the organization.
- Insufficient skills in IT with regard to obtaining information about the added value actually delivered. This concerns the retrospective evaluation of business cases of projects and of service management with regard to qualitative customer surveys and customer loyalty (Net Promoter Score).
- Most IT organizations lack the means and resources necessary to actively market their own value proposition.
- The traditional structure of many IT departments still prioritizes technical-functional priorities over customer needs
The challenge for the entire organizational environment
This is not only a challenge for IT departments, but is determined by the entire organizational environment. In essence, it was said at the time that companies exist to maximize profits for their shareholders.
Friedman’s assertion in principle is difficult to question. But we should also see that the pure application of this economic school leads to a blind pursuit of profit maximization. Especially if the management level of an organization does not focus on the management of the investors’ earnings expectations as well as on the company’s value proposition for its customers.
Even if executives agree with the focus on customers out of personal conviction, according to our observation they still fear that the prioritization of customer needs and the necessary investments could jeopardize the efficiency of IT and upset those responsible for the budget.
Strategies for the implementation of customer-oriented service management
When it comes to technology, the technologies, operational capabilities, and performance measurement systems needed to implement customer-centric IT management are at best emerging. Therefore, the implementation of a consistently customer-oriented organization of an organization is still generally associated with risks.
How can you meet these challenges? Which strategies for implementing customer-oriented service management are successful?
The answers to these questions in accordance with our many years of work with organizations in a wide variety of industries will be in one of our next blogs. If you don’t want to wait until there, just visit us. We’re glad!
