IT Adapts to a Customer-Driven World

The relationship between corporate information technology departments and their in-house clients is changing rapidly in customer-driven organizations. At one time, IT functioned as a virtual principality, setting its own priorities without any accountability to line-of-business departments. Today, such insular behavior runs counter to the need of businesses to align their IT implementation with their business objectives.

Driving this sea change is the growing recognition that customer-focused activities--sales, marketing, customer service and others--are the most critical aspects of managing a business. As the concept of customer relationship management began taking hold as a strategic priority, the long-dormant wish lists for enabling technology to support sales and marketing suddenly took on a new urgency.

Lightning in a Bottle
But IT found capturing CRM no easier than getting lightning in a bottle. Even before anyone unraveled the riddle of CRM, a dispute broke out over who would own responsibility for it.. The new "front office" partnership of sales, marketing and service claimed it as its own, which made sense because CRM mainly involves front office functions. But IT saw CRM as a new technology, which, by definition, gave it dominion.

In many organizations, a tug of war ensued between IT and the front office, resulting in a non-productive diversion of management attention and further delays in implementing needed solutions. That situation prevailed until, in the best-managed companies, the combatants came to an important realization. CRM did not belong to either the front office or to IT; it belonged to the customer. The purpose of CRM was to serve them.

Customers took charge. Before long, impatient customers started bossing everybody around. They wanted salespeople armed with information and decision-making power, not puffery. They wanted marketing that addressed them individually, not as one lump. They demanded customer service that knew them and their relationship with the company. And many wanted to do business over the Internet without further delay.

Customers Rule
When it came to conducting business online, customers had their own agenda and were not shy about expressing it. They wanted information at their fingertips--and not just product details. They wanted product availability and production schedules and other "internal" information previously off-limits to them. They also wanted routine order placement that did not involve salespeople. They wanted their choice of customer service delivered over the Internet or in person, depending on their needs. They wanted fast navigation to where they wished to go, without being forced to wade through what marketing wanted them to see. No one was spared.

IT split into two camps. After losing the tug of war, IT found itself at a crossroads. It could either take the road back to Fortress IT--or accept direction from a new boss, the customer. Some argued that the road back was also a dead end, but many ignored them and decided to turn a deaf ear to these customers and retreat.

And that's how this sizeable segment of what had been powerful and autonomous IT came to be increasingly marginalized. It would become relegated to building and maintaining information systems that others dictated. That was a sad ending to what it had assumed would be a coronation of IT, and it became most bitter about this denouement.

But the other segment of IT, to the surprise of many, actually took advantage of CRM and the emerging power of customers. It used this as leverage to gain even more importance--and to become stronger leaders than ever before. In fact, the understanding that CRM was first and foremost about taking better care of customers--not about taking better care of internal matters--presented CRM adopters with several challenges that such forward-thinking IT shamans were uniquely equipped to meet. No one had ever suspected IT could be so adaptable.

CRM provided new opportunities for IT. One big hurdle facing CRM adopters was the difficulty of changing to organizing around customers instead of around specific functional responsibilities, which had been the mode for as long as anyone could remember. Having met the information management needs of each functional area, although not always without some wrangling and disputatious discourse, IT had acquired an overview of what went on throughout the whole enterprise. True, that overview was focused on information management. But as it happens, work processes ride on top of information flow. And that gave IT insight into how to develop new "cross-functional" work processes that inevitably accompany CRM.

A second opportunity CRM presented to this forward-thinking IT segment was introducing more disciplined work habits to sales and marketing--who had long resisted such attempts to structure their work. As many managers soon learned, implementing CRM requires adopting a very structured workflow--without which those with initial customer contact wouldn't gather customer information, transaction data and other customer-related information. This data then wouldn't flow back to any others with consequent customer contact.

Marketing wouldn't know what to do, customers wouldn't have consistent experiences with the company and inefficient operations would create increased costs that customers wouldn't bear. But sales had very little process development and management experience; marketing had less than none. And even service was accustomed to working with very narrowly prescribed processes applicable to service only.

Where was the requisite process management experience to come from? IT was the natural source--which drove IT's stock even higher, at least for those in IT who realized its role transcended technology.

Yet another opportunity CRM presented to IT was dismantling the front office/back office wall that traditionally separated those who faced outward, sales and marketing, from those who faced inward and ran things. Previously, IT had used this wall as its perimeter defense, keeping out those who had no business meddling in truly important matters. But responding effectively to new customer demands required close collaboration among the front-office functions and back-office functions.

The forward-thinking IT contingent saw this as an opportunity to get beyond its traditional boundaries. The others who remained locked in the past were yet further threatened. But before long, "nouveau" IT was routinely consulted on sales and marketing matters. That may sound unnatural, but both sales and marketing had become increasingly dependent on management of customer information. Their roles had tilted more and more toward preserving and improving customer relationships and away from casting out huge nets in search of new customers. And in a remarkable break from past practices, IT-initiated contact with customers became almost commonplace.

Previously unimaginable acts such as IT executives riding with sales reps to make customer calls and wearing headsets at call centers became routine. And the further customer interaction shifted toward the Internet, extranets and newer digital communication channels, the closer IT needed to be to customers in order to appreciate their experiences first hand--rather than receiving oft-filtered feedback from sales, marketing and service.

A great melding of systems occurred. Because no one was yet sure how or whether to integrate CRM-supported functions with the likes of more "serious" functions such as accounting, manufacturing, purchasing and logistics. But after much experimenting, many reached a surprising conclusion: A number of functions traditionally performed by back-office staff, who typically were blind to customers, could be better performed by those in contact with customers. These functions ranged from product configuration to order entry, from maintaining "official" customer records to analyzing customer information, from establishing production priorities to determining product design.

Moving these functions out to the front office caused much consternation. It also caused a radical reordering of functional responsibilities within the information infrastructure. CRM systems started performing functions that previously resided on ERP, as more and more work was done closer and closer to customers. Some in IT, even among the forward thinkers, fought mightily against this change. But others saw it as the wave of the future--and saw this, too, as an opportunity to grow further in importance and influence in the new, customer-centric environment.

Alas, some IT preferences had to yield. The shift in focus toward customers and those interacting with customers challenged "standard operating procedures" for many--but for none more than IT. These were hard changes to accept in the light of traditional training and conventional wisdom:

Customer data management as a closed loop, starting and ending with laptop and desktop clients and their servers.

Front-office systems creating and exporting data necessary for accounting functions to traditional "legacy" systems, which now played a much more limited role.

CRM system componentry influencing the design and development of traditional "enterprise" systems--instead of the other way around--radically changing selection criteria for everything from databases to e-mail to operating systems.

The growing need to distribute data to functional application systems in real time--rather than making data "available" from a central repository--Web-based architecture giving way to the distributed data model.

Ironically, the function seemingly most threatened by CRM--IT--became its biggest beneficiary. At least that's true for those in IT who recognized early on that business was becoming customer-centric, not information-centric. Admittedly, that was a hard recognition, one that many marketers have yet to make.

Happily Ever After?
And it's very fortunate for CRM that so many in IT adopted the customer-centric perspective. Without IT's adapting to a very different environment and mindset, CRM would have remained either mired in technology, limited in function to front office matters, or still a product sold by software merchants--a sad fate for something with such potential and with so much power to satisfy customers.

But lest we forget, the advent of CRM and the customer-centric movement also created many casualties in both the front and back offices. Managers who could not change threw their bodies across the tracks of change, only to have their careers truncated.

That's change for you. It puts us at a crossroads and lets us decide which direction to take. And there always seems to be a safe-looking, well-worn path, a riskier-looking climb and a couple of seeming shortcuts. Funny how the risky-looking route usually turns out to be the safest, the safe road the riskiest and the shortcuts dead-ends.

Who says change isn't predictable?