Author: Michael Pyliotis, VP of APAC, Basware
Is ‘customer obsession’ just a hyperbolic phrase, or is there solid logic behind this new term? Michael Pyliotis, VP of Basware APAC explores what this means for procurement and what role technology has to play in making customer obsession a reality.
The popularity of the phrase ‘customer experience’ (CX) is nothing new. Harvard Business Review has been tracking its popularity since 2010. Eight years on and customer experience has evolved so far, to the point that ‘customer obsession’ is now a more appropriate term.
Over the last 8 years what emerged as a ‘nice to have’ concept has become firmly embedded and is now part of the ‘business-as-usual’ approach for many of the world’s most successful companies, including the likes of Amazon. But why should those of us working in, or serving, procurement actually care? Well, the results speak for themselves.
In the ‘age of the customer’ we have to be customer-obsessed
As Michael Barnes, VP and Research Director at Forrester Research explained at a recent Basware event; “In 2018, it’s not enough to be ‘customer centric’. Or have digital capabilities in place. Or focus on repairing CX problems, or even elevate customer experiences. These are all essential. And all part of a bigger objective.” Now, in what he describes as ‘the age of the customer’, we can no longer rely on the traditional sources of advantage to remain competitive. Once a company’s manufacturing strength, distribution power, and ability to leverage information kept it ahead of the game. Today, however, he says “To be truly competitive, you must become customer obsessed.”
The key to sustainable competitive advantage is engagement with your customers
The power balance has shifted. No longer do suppliers have the ability to dictate terms of engagement to their customers. The shoe is on the other foot. Customers now have a magnitude of options and businesses have to engage with them on their terms.
This is nothing new. However, the failure to pay attention to customers and to act on their terms is no longer an option. Forrester says that “20 per cent of CEOs will fail to act on digital transformation and put their firms at risk”. Digital transformation is no longer ‘elective surgery’, it’s root canal: urgent, important and very painful if you leave it too long.
In short, to sustain true digital transformation that enables customer obsession things have to change – you have to put your customer at the centre of your total operating model. In order to make your business digital, your systems have to be digital too. Goodbye on-premise, hello Software as a service (SaaS).
According to Forrester, truly customer-obsessed firms operate according to four key principles:
What does this change mean for procurement?
Businesses need to have the data about their customers, their customers’ preferences and their customers’ transactions at their fingertips to be able to systematically transform data into insight and to act upon it. This needs to happen fast, in a connected way (no more silos across business units, countries or departments).
How do companies become insights-driven?
Based on interviews that Forrester conducted with over 40 organisations, globally, the way to become insights-driven is to overcome inefficient, manual processes, improve spend visibility and more accurately forecast and plan. Enter: SaaS. Based on a Forrester survey of 600+ decision-makers whose firms use, or plan to use SaaS, 72 per cent said improved business agility and lower overall costs were key in their decision to go this route.
So, what’s stopping them?
For most the answer is budget or a lack of alignment between IT and business units. I believe that there are also two other factors: procrastination and fear. Inefficient processes, lack of visibility and uncontrolled spending are key challenges to success. Moving to SaaS can result in efficiency gains, a reduction in invoice cycle times, improved visibility and increased spend under management.
Waiting to move from old, premise-based technology to the cloud is no longer an option. Not only are the numbers too compelling to ignore, but the risks of being left behind are too great. Old, disconnected technology obstructs an organisations’ ability to service its customers which, in turn, leads to customer dissatisfaction, churn and massive risks for both current and future growth.
It’s not all doom and gloom: procurement can lead the charge for change
Procurement has the ability to lead the charge for customer obsession from the front, to become the poster child for automation and integration. The results? An empowered organisation that can create an insights-based commercial advantage.
Basware is the global leader in providing networked source-to-pay solutions, e-invoicing and value-added services. Basware’s commerce and financing network connects businesses in over 100 countries and territories around the globe. As the largest open business network in the world, Basware provides scale and reach for organisations of all sizes, enabling them to grow their business and unlock value across their operations by simplifying and streamlining financial processes. Small and large companies around the world achieve significant cost savings, more flexible payment terms, greater efficiencies and closer relationships with their suppliers. Find out more at http://investors.basware.com/en.