I recently had engagement with a large group of companies in the insurance sector. They loved what we do, and how we do it, and even stated that there is a lot of value that the track and trace characteristics of our digital communication can offer to their customer base. They also, however, claimed that they could only implement some of our offerings as they were “limited by their current ERP system that has various constraints preventing further integration”.
We’ve all read the numerous case studies about previously-dominant companies that have disappeared overnight… a simple Google search for “Kodak case study” yields 473 000 results; “Nokia failure” yields 672 000 results; “Reason for General Motors failure” yields 1.2 million results. The list is long and distinguished.
Whilst the initial two examples are certainly linked to technology strategies, it could be argued that the reasons behind the GM example were numerous. The bottom line, however, is that GM failed to make any profits between 2005 and 2009. When sales slow down, especially due to external forces (a recent example is due to unscrupulous bankers’ dealings in 2008/9 – many of whom are now in jail!), great companies have the ability to manage their costs so that they are in-line with their sales. GM didn’t. Their fixed costs were structured in such a way that there were no efficiency gains to be had when turnover dropped. One can blame consumer demand, one can blame innovation, one can blame bureaucracy, the equation is simple: Sales < Costs = Loss!
So here is the question: Does one of your biggest fixed costs belong to that outdated piece of software clogging up your server room and throttling the life out of your bandwidth? For the purpose of this discussion, let’s not even start to expose the aging support crew necessary to maintain the antediluvian coding language.
If your answer to this question includes any form of defense mechanism, then chances are you have the same response when asked if your offering caters for a user experience, or a customer experience (There are no hyperlinks here – of course you know the difference!)?
For illustrative purposes, let’s take a quick look at South African Airways’ recent innovation:
- Able to book flights online – Yay!
- …and then able to pay online – Yay!
- …and then able to download an e-boarding pass to your mobile phone – Yay! (this is really starting to look promising)
- …and then the message that then reads “please print your e-boarding pass and present it to security…” – …*sigh*… so close, yet so far… What ever happened to secure electronic communications? Why even bother asking for my email address? Talk about falling over at the last hurdle.
In 1969 (yes, almost 50 years ago!), the whole world trusted a piece of technology (a.k.a. the Apollo II Guidance System) to protect the lives of 3 people, while landing a 5-ton block of metal onto an unknown heavenly surface some 385 000km from its original launch site. This piece of technology used to deliver this parcel had 2 000x LESS memory, and 9 500x LESS processing power than the first Apple iPhone released in 2007!
How did NASA accomplish this technological feat? Quite simply, they wanted to. And they wanted it more than Yuri’s team did.
You will only change the behemoth in your server room if you want to.
You will only enable a true customer experience if you want to.
You will only survive your competitors if you want to.
Admit it – you actually WANT the tail to wag the dog!
I presented this blog to a senior executive at the aforementioned insurance company for comment. Do you think his response was:
- “But you don’t understand…”
- “How can you say that? We’re market leaders!”
- “They never landed on the moon…”