CNB Systems Ltd Sam Lund CNB Systems Ltd Kunden är kungen Kungens nya kläder.

Sam LundCNB Systems LtdCNB Systems Ltd

Kunden är kungenKungens nya kläder


Table of contents

1. Customer2. Insight3. Management

• This presentation is about getting grips on customer or market requirements, and being able to align your business, products and solutions with this elusive target.

• Elusive in the sense that while customer is the king through her power to decide, she never really shows her true mind, and hardly makes it up truely independently.

• This if anything claws us out of the comfort zone: Why is she interested? What makes she like us? How could we meet her again? Did she like our last venue? Or, if she after all was not the right one for us?

• And you cannot simply test her. However, if you can learn from her values and know the criteria she uses while on search, you can make some necessary changes here and there to give a better match with her expectations.

• That's insight.


CUSTOMER


Customer

GOD KING(PAYING)

CUSTOMER

Worshipping Complying Serving

Heaven or hell Tax or axe ?


Customer: God

• Shareholder worshipping• Managing the company by earnings per

share instead of focusing on details like new products, service calls, customer-satisfaction scores

• The tail wagging the dog: Businesses become disconnected from their fundamentals, producing "perceived value" instead of real value, because that's what the stock market rewards.

• According to the National Quality Research Center, a 1% increase in customer loyalty can result in a more than a 3% increase in market capitalization.


Customer: God

• 80 percent of executives think they are doing an excellent job of serving customers - and the perceptions of customers themselves: Only 8 percent of them agree.

• Every four years,the average company loses more than half its customers.

• …if 1% more loyalty brings in 3% more market capitalisation, doubling loyalty figures over 4 years period …might make paying customer come before anything else!

(Numbers based on a study conducted by Bain & Co.)


Customer: King

• Regulatory compliance• National controls• EU market control & directives, legal

metrology• Branch specific controls, eg.

– Pharmaceutical, Health-care» It takes 12 years and $359 million (1993) on average

for an experimental drug to travel from the laboratory to the medicine chest. Only five in 5,000 compounds that enter preclinical testing will actually progress into human clinical trials, and of these five, only one is likely to be approved by the regulatory authorities.

– Banking, Finance, Insurance

» Average Basel 2 compliance cost estimated at €200M per bank


Customer: King

• Standards compliance• Procurement

– Eg. Common Criteria (sw product security)» To become certified, a product must undergo

and pass over 150 unique tests, a process that can take up to 1 year to complete at a cost of up to €1 million.

• Provisioning– Eg. ITIL

» In recent survey CIO Compass Survey found that 72% of responding organisations were without formal linkages between ITIL maturity and IT Performance management


Customer: (Paying) Customer

• Change of business environment» Meteor hits Bay of Mexico

» PC

» Mobile phones

» Internet

• Change of business context» Mammals and later the humans

» Electronic office and commerce

» Wireless media

» IP Media convergence



PC

T 1

Internet

T 2

IP Media

T 3

Big things happen



PC

T 1

Internet

T 2

IP Media

T 3

All the other things happen



Customer base may be influenced by multiple business contexts – affecting yours!

Digital camerasMobile phones with camerasCheap displays

CamerasLenses

Photographic filmPrint products A recent survey of Fortune

500 companies indicated that over 80% had altered their business model in a given 2-year period.



• Customer lives in a context

• Contexts – like kingdoms - have a life cycle: emerge, prosper, fade off, depend and sometimes get invaded, drawn off the map too

• And so even the King has a lifecycle too

• …but then again, long live the New King!


INSIGHT


Insight• Relationship with Customer is about

servingserving– Requires understanding of

EXPECTATIONSEXPECTATIONS– And must be transfered into

consistent LEVERAGELEVERAGE


Insight

• Expectations change in TIMETIME and with CONTEXT CONTEXT and are valid only for a period of time (e.g. ”Best Before…”)

• Expectations fulfillment influences both the context and any new expectations

• First market movers change the landscape…


Value

Criteria

Insight

Context & Time

Leverage

Expectations


Insight

Expectations Leverage

Value formationCriteria

formation

Contexts change, and impactexpectations (ref. Vertu)

High priority

Low priority


Insight



formation

High

Low

Time changes value of expectations


Insight


User expectations

User Experience

User Story

Use Cases

Features

Requirements Test Cases

Test Cases

Test Cases

Test Cases

Test Cases

Test Cases

Prio

Acceptance criteria


formation


MANAGEMENT


Management

Lets do it: PROCESS

Lets find out: DATABASE

Deep existential question: What do we do with Customers?

Who is our Customer?

Customers are instructions?

Customers are statistics?

CUSTOMER

Serving

?


Management

What is the added value of being Your customer?

What is your interest in havinga customer?

CUSTOMER

Serving

?


• Customer interaction analysis — assessing what types of interactions your customers value and how to increase the significance of those interactions, while eliminating or consolidating others that bring less value.

• Assessment—understanding both in aggregate and on the individual customer level what decisions data can help them make.

• Identification—identifying the different types of customer touch points and the information they generate.

• Systems & Process architecture—deciding what you need in order to make customer insight data operationally effective

• Data management—determining how to structure and share data.

Management


Management

• Outside in: understanding the volatilility of the market place

• Effects from changes in Context and Time• Understand where your customer base is moving

and what is moving them• Understand where the key value drivers are

moving– QA: extract criterias

• Match this with Your profile;eg. brand, product, market fit


Management

Our strengths

Our weaknesses

Competitorstrengths

Competitor weaknesses

Customer needs


Management

• Outside in:• Test your profile to the directions of the market place• Define maps for the underlying major context movers,

e.g.» Competition moves

» Technology moves

» Business environment moves

» Cost drivers moves

• Match with your Capabilities and Products» Business Opportunity Management

» Customer Insight Management


Management

• Outside in: Basic practices with today’s tools:• Collect inputs from customers, competitors, internal and

external sources - for analysing and determining opportunities emerging at the market place.

• Determine business and customer value and prioritising these

• Differentiate between strategic, competitive and necessary features from customary, beneficial and optional.

• Manage key success factors for products, features, schedules and required organisational skills and capabilities

• Define financial requirements and conditions, creating business case for any new developments, target costs for development and for customers


Management

• Inside Out:• Product Strategy and Portfolio

Management• Release Project Management • Requirements management• QA

» Wherea are we with expectations» Wherea are we with market trends» Wherea are we with contexts

New meaning for “Better late than never”


Management• Inside Out: Basic practices with today’s tools:

• Define product contents corresponding strategic plans, and assign these to range of projects to get executed.

• Define Product Contents and how this is to be represented amongst all of the company’s offerings

• Manage the overall scope of products, on-going activities with them (marketing, new developments, phase-outs)

• Direct product versions and life-cycle on the market place. Land new versions safely.

• Analyse which projects and products need more financing and allocate resources for optimising value for the company and market places

• Gain overview to development status and risks and which level of customer experience is emerging

• Determine strategic position of the company in given future and release situations


Management

Content

Time

Resources

Value US

Value EU

Value Asia

Man-hours


ProblemReports

SalesDemands

CustomerRequests

RequirementReception

RequirementRefinement

Plan ReleaseProjects

ReactiveBalancing

Customers

Marketing

Support

Req. Receiver Req. OwnerMarketingCustomersR&D

Content Resp.

Supply

Req. OwnerCustomers

Req. Owner

Requirement Management & QA Process

Market NeedUnderstanding

CompetitorAnalysis

MarketSegmentation

Content Resp. Content Resp.

Marketing

Customers CustomersMarketing Marketing

Content Resp.

Continuous Need Analysis

ImplementationProject

R&D

Delivery ofProject

SupplyRelease Resp.CustomersMarketingReq. Owner

Delivery

SupplyRelease Resp.CustomersMarketingReq. Owner

Release Resp.

Projects

Line

ReactiveBalancing

Line

Req. StatusNew

Accepted for review

Clarification Needed

Assigned to developer

Accepted for prio

Allocated to Release

Implemented

Implementation started

Validated

Delivered

Value&Critierias Value&Critierias


Benefits for moving QA upstreams

1. Market place understanding results in QA criteria, which can be used to validate solution concepts

2. Subsequent steps are in a similar way inherently aligned and are focusing on to create customer perceived value. Design is not off-tracking.

3. Acceptance criterias help not only QA, but also set target values for R&D. A requirement as such never tells how well its should be implemented.

Juran vs Feigenbaum:Compliance to requirements vs. Fitness for use


Summary


SUMMARY

1. Customer2. Insight3. Management

Customer is the elusive element in the changing of Business Environment and Visibility with Measurement is the main problem:

can see but not measure…can see but not measure…can measure but not see…can measure but not see…

• Requires awareness and capability actions in multiple corporate functions to reduce the challenge in aiming at the moving target

• There are clear benefits in moving RM and QA out of the shell to support more holistic reach towards customers and directing towards expectations fulfillment

• And be integrated to support business planning and customer care equally!


Thank You!


Sam Lund

• Coach, Mentor and Introduce

• Consult and Implement Changes

• Case studies

• Customer and Market Driven Management• Organisational and Process Maturity

Development

• Requirements driven process improvement

• Business and product management

• Development management

• Project management

• System architecture and management

• Banking/Finance, Media & Advertising, Communication Systems, Defence, Aerospace

[email protected]@CNBsystems.com+49 171 5387915+49 171 5387915+358 468 485579+358 468 485579

CNB Systems Ltd Sam Lund CNB Systems Ltd Kunden är kungen Kungens nya kläder.

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