Capturing Data from Customers

The customer is a strategic element in a company’s downstream supply chain. In the new economy, customers, whether they are individual consumers or businesses, are becoming demanding, powerful, and more knowledgeable than before. The pressure of customers for more improvements (e.g. in quality, cost, and delivery), has been intensified by globalization of marketplaces and the emergence of new business philosophies and models (e.g. click and mortar direct-sale business model). Customer data is the key to successful relationships with customers. Data acquisition is the process to capture, integrate, cleanse, and load customer data, from various customer touchpoints, into the operational data store (ODS) and DW in order to create customer information and knowledge. This chapter intends to examine the concepts, issues, and trends related to capturing customer data and routing it to, or sharing it with, people in other units within the organization.

Setting a CKM Strategy

In today’s dynamic business environment, change is omnipresent. Organizations have to develop sound change management strategies in order to counter the same. Transition to knowledge-based economies made establishment of effective knowledge management (KM) mechanisms within companies crucial to achieve business competitiveness. This chapter addresses background concepts, critical issues, and future trends related to the blueprinting of CKM as a knowledge-based strategy for anticipating and meeting customers’ needs profitably. Crafting CKM requires a set of activities, i.e. plan, design, build, and implement, which seek to create or leverage the firm’s distinctive core competencies (DCCs) in order to attain a sustainable competitive advantage (SCA). This chapter advocates the premise that successful businesses are those that have both vision and commitment to make that vision a reality. The vision might be customer-oriented, e.g. the strategy is CKM, the processes include CKM value chain primary activities (capture data from customers, create profiles of customers, compose knowledge about customers, maximize value for customers, measure return on relationships with customers, and master the learning throughout CKM change), and CKM value chain support activities: reorganizing people, reconfiguring processes, and retooling Information and Communication Technologies (ICTs).

Managing Learning throughout CKM Change

The previous chapter focuses on creating value-added products and/or services to customers..As the management of a CKM change is a journey, not a destination, this chapter is concerned with learning and adapting throughout the life of CKM change. It focuses on the accumulated knowledge and experience in implementing CKM, wherein end product learning is back channeled into the early planning stages of CKM. The aim of this CKM value chain phase is to sustain CKM performance.

Compiling Profiles of Customers

Whether companies are engaged in B2B or B2C transactions, they need to understand their customers. Once customer data are captured and stored in ODSs or DWs, they are then subject to further customer-centric intelligence processing in a manner that facilitates the execution of complex query performance and the competition on ‘analytics’ (Davenport, 2006). It is certainly not true that companies with the most data always win; the success lies in processing the existing data to learn about trends and attitudes of customers. This chapter, as well as the coming chapter, discusses the strategic, or analytical, side of CKM. The term ‘analytical CKM’ is used in this book to refer to both information and knowledge discovery tools. The views presented in this chapter are from the ‘information management’ perspective, whereas the coming chapter adopts a ‘knowledge management’ perspective.

Redesigning Processes

In today’s turbulent and complex business environments, the focus has shifted from products to services. As a result, services have become a new battleground for competition; and processes, a weapon of war. Organizations wishing to boost their competitiveness need to focus on desired customer outcomes by redesigning business processes through effective use of advanced ICTs and the creativity of their human assets. Organizational reinvention of structure, people, and ICTs are driven by the CKM strategic change with a purpose of adding value to both customers and business firms. Reinventing organizations has the potential to create more flexible, team-based and integrated work activities, both internally and externally, to allow customers to be linked intimately to the business, to improve their experiences, and ultimately to develop enduring and profitable relationships with them. This chapter explores the last part in reinvention, viz. the role of business process redesign in CKM.

Maximizing Value for Customers

Efforts to improve the experience of customers do little to boost customer satisfaction and loyalty if they fail to connect with customers and anticipate their needs. The first chapter of this last part of the book deals with the CKM harvesting phase. A process-oriented customer-centric enterprise needs to know its customers and to be resilient and vibrant towards them and their preferences by creating and delivering superior value offerings that suit their desired needs and/or preferences. Doing good things for customers reciprocates good things for business. As the long-term objective of a competitive business strategy is to build SCA, focus should be on ‘difficult-to-imitate’ resource-based capabilities (Salck et al., 2006). The CKM strategy is adopted in order to leverage business DCCs, i.e. CK, to deliver highest value-adding (VA) products and/or services to customers, and achievement of SCA for organizations.

Reorganizing People

The ability of an organization to compete in rapidly changing business environments is contingent upon its ability to develop competitive strategies that enable leverage of distinctive core competencies and delivery of value-adding products or services to customers. Once the competitive strategies have been identified, a plan is developed to support those strategies. The plan will specify the design and use or creation of strengths in the organization’s resources. The current chapter looks into the reorganization of people in teams as a major pillar of CKM. Although this chapter is devoted to discussion of the role of people in CKM, the role of people as well as ICTs and business processes will continue to play a significant role in the CKM core value chain activities covered in the remaining parts of this book. Setting the stage for CKM strategic change, requires reinvention of the internal setup of organizations manifested by its three major infrastructural components: reorganizing people, retooling ICTs, and redesigning processes. This chapter explores the role of one organizational architectural component, reorganizing people, as it relates to CKM strategic change. King (1995) introduces the concept of Strategic Capabilities Architecture wherein the guiding architecture of a firm should be based on the strategic vision. In other words, this vision bridges the existing status of the firm (“Where it is”) and its projected future status (“Where it wants to be”) related to the firm’s current and future capabilities. The guiding rule here is that no single capability of the firm can provide a SCA to the firm. The firm cannot compete on the basis of “low cost” or “best quality” or “customer service.” The SCA of the firm derives from the “synergy” of the firm’s various capabilities. Porter, as cited in Pastore (1995), proposes a similar concept in his notion of “complementarities”. He argues that the various competitive capabilities of the firm should be “complementary” or “synergistic” so that capabilities cannot be easily imitated by rivals. The same argument has been made with reference to different ICT-related innovations, such as BPR (Davenport & Short 1990, Davenport 1993, Davenport & Stoddard 1994). Organizational reinvention, or transformation, as a concept and an approach has become popular in recent years, largely from its alignment with contemporary trends in corporate strategy, technology, and human resources, rather than from its inherent attractions. It intends to bring about a remarkable shift in one or more of technological, human, process, and/or structural dimensions of organizations (Blumenthal and Haspeslagh, 1994). However, if it is viewed independently of these advantages, the approach promises great benefits but also can be difficult, challenging, and disruptive (Graetz et al., 2006).

Retooling ICT Systems

Regardless of the type of organization or operation, the evolving nature of organizational ICT systems helps organizations to live up to changing market dynamics. Although CKM itself is not a technological solution, ICTs are required to enable the integration of its customer-facing processes and, to build knowledge-based endurable and profitable customer relationships. The previous chapter explored the role of people in enabling CKM; whereas the current chapter is devoted to examining the role of ICTs retooling. Retooling ICTs is used in this chapter to refer to the replacement of old legacy systems with new systems in enabling a successful CKM change. The main focus of the chapter is on the hardware, software, and network components of ICTs in the context of CKM.

Spotting Environmental Drivers

The only constant in life is change, and business organizations are not different. Environmental uncertainties made transition to knowledge-based economies made establishment of effective CKM mechanisms within companies crucial to business competitiveness. This chapter examines the importance of business environmental conditions in driving an organizational change, viz. CKM. The basic premise of the chapter is that business organizations need to strive to adapt to opportunities as well as challenges brought by constant, complex, rapid, and discontinuous environmental uncertainties. In their quest for SCA, organizations need to leverage their DCCs in scanning environmental drivers for CKM as well as in the crafting a holistic CKM strategy.

Measuring Return on Relationships with Customers

Effective development of customer products and/or services requires valid and up-to-date CK in order to target the right customer with the right offering at the right time and through the right channel. Increasing value-adding content of customer offerings is hoped to be reflected on major gains in cost, time, and quality of products and/or services. Doing good things for customers is doing good things good for business. This chapter addresses customer value reciprocity for business represented by durable and profitable customer relationship.