Accelerated disruption can provide new opportunities for enterprises that become customer-adaptive
Accelerated disruptive change and margin-eroding commoditization are now the norm. Power has shifted to the digitally connected customer, and old business models, such as command-and-control management approaches and systems, designed for a more predictable environment, are fast becoming redundant. This drives the need for a deeper and broader enterprise-wide perspective of the customer, not just the customer-facing parts of the organization.
CRM has been greatly misunderstood and has failed to live up to its promise, and customer experience management (CEM) as a response to commoditization only provides part of the answer to a lack of differentiation. As Matthew Key, CEO and chairman of Telefonica Digital recently stated in The Times: “disrupt your model fast before somebody else does it for you.”
Today’s environment presents major opportunities for enterprises that have the vision to raise their sights and their games to become customer-adaptive. Conversely, those that fail to step up to these challenges risk losing market share or, worse, extinction. One only has to look at the recent fortunes of RIM and Nokia in the mobile market to realize the dangers of missing the signals of disruptive change.
A customer-adaptive enterprise (CAE) has highly acute peripheral vision and is driven by a desire and strategic intent to create and deliver value and be persistently relevant to its customers. This is achieved not only by delivering a superior customer experience, but also through continuous innovation born of deep insight into the customer’s context. These advanced organizations have the ability to actively seek out and sense the changes in the forces impacting customers’ behaviors, wants, and needs, and have the cross-enterprise execution capabilities to act and adapt at speed.
Ovum believes that the means to achieve this level of organizational coherence and orchestration are in the hands of CEOs intent on this path. What may have seemed fanciful or beyond capabilities just a few years ago can now be enabled by harnessing and working with the “grain” of judiciously applied disruptive and innovative technologies, rather than being their victim. However, before looking at technology, there are certain key principles and organizational attributes that need to be in place. There are also classes of technology that can enable this more dynamic and customer-driven environment, including some that are emerging (and which have been the subject of Ovum “On the Radar” assessments).
The customer-adaptive enterprise provides a strategic context within which to make sense of disruptive technologies and evolving customer behaviors.
Ovum’s aim in this report is to help enterprise clients navigate the disruptive environment by stimulating cross-enterprise debate and choosing the most appropriate path for their organization. Each is likely to be unique, but founded on principles exhibited by some of the more evolved enterprises examined here.