Journey to Future-Ready IT Business

Introduction
Pickup any content on Marketing subject in IT world and you will find a common theme around,

- Customer Centricity
- Production and Service Quality with Innovation
- Efficiency
- Reliability

Most of the time IT Product or Service provider becomes too focused, goal oriented and myopic to
understand the actual needs of the business or the customer.

Business is not about treating all the customers with the same yardstick as identical, but to understand
the uniqueness of each customer and provide the contextual knowledge along with right solution for the
requirement in form of product or service. There are primarily two parameters that any customer
expects,

- Effectivity of Product or Service

- Efficiency of Product or Service

These two parameters encompass all the dimensions of the IT Industry when elaborated and detailed. It
is interesting to note that all customers do not strive to focus on achieving the same level of
‘Effectiveness’ and ‘Efficiency’ based on their Business needs and IT strategy but strive for optimization.

To achieve improvement or higher degree of perfection in either one or both the parameters of
‘Effectiveness’ and ‘Efficiency’, it would require strengthening of the four pillars of Project Management
Scope, Cost, Time & Quality (Technology). Organizations cannot always maximize on all the four
elements based on the Business needs and IT Strategy, which must align with the overall roadmap of the
organization.
IT Industry view of Customer
Many authors have tried to classify IT Customers into different categories. ‘DO IT SMART: Seven Rules
for Superior Information Technology Performance’ by Jurgen Ringback and Rolf-Dieter Kempis has tried
to classify customers into 4 IT Cultures,
- IT Stars – Customer who have achieved excellence in both Effectiveness and Efficiency
- Big IT Spenders – As the term suggests these customers spend big on IT but are yet to achieve
excellence in Effectiveness and Efficiency, though they are higher marked on Effectiveness
- Cautious IT Spenders – These customers are cautious in their spend on IT and spend only on the
essentials and hence are not able to derive the full benefits of Effectiveness and Efficiency
- IT Laggards – Laggards are last on adoption of IT Technology and they tend to lag and do not see
any benefits either in Effectiveness or Efficiency

IT Effectiveness is measured in terms of,

- Use of the right Products, its development and processes
- Using IT effectively in core operational processes
- Administration

IT Efficiency is measured in terms of,

- IT Cost
- IT Project Cost
- IT Project Duration

DO IT SMART – IT Cultures & Customer position

A very similar approach has been adopted in ‘Crossing the Chasm: Marketing and Selling Disruptive
Products to Mainstream Customers’ by Geoffrey Moore where the proposed model considers customers
classified into,
- Innovators – They are the ones who like to experiment and take risks whether it is in Product or
Services. They are aware that all the experiments will not succeed but they would like to pioneer
into the new frontiers.
- Early Adopters – Customers who like to work with emerging technology, strategic opportunity,
high visibility, high risk project and can afford big budget spending.
 - Early Majority & Late Majority – Customers are the mainstream buyers who are current with the
technology and service which has already been adopted as industry standard. Early Majority are
pragmatic and Late Majority are conservative in their approach to adoption.
- Laggards – Customers who are cautious in their approach and reluctant to adopt a new
technology unless other options ceases and they are compelled to change.

Crossing the Chasm – Positioning of IT Customers in Market

There is yet another model which is proposed in ‘Games Customers Play: What They Don’t Tell You
about Buyer-Seller Relationships’ by Ramesh Dorairaj where the Customer and IT Product or Service
provider i.e., seller, relationship is classified into 4 quadrants,
- Transactional – When the relationship between Customer and Seller is at a very basic level
- Seller Tyranny – When Vendor dictates the relationship because of the Customer views the
Seller as superior (Seller Control)
- Buyer Tyranny – When Customer dictates the relationship because the Customer views the
Seller as inferior (Customer Control)
- Personal – When both Customer and Seller understand each other and have mutual respect
creating a healthy working relationship

This model explains that the true WIN-WIN relationship can only when it is in Personal state.
 Games Customers Play – Buyer & Seller View

To a large extent all the three models have a similarity. ‘IT Stars’ of ‘DO IT SMART’ are just like ‘Early
Adopters’ of ‘Crossing the Chasm’ and ‘Personal’ of ‘Games Customer Play’, they all show a common
trait, maturity in adopting the technology and service early, manage IT effectively and efficiently and
build a good understanding and relationship with their sellers, vendors, or service providers.

At the same time, it does not mean that the other position customers do not want to be there, because
their final goal and intention is always to get there, only they have not achieved that maturity to reach
that position and are in a transformational journey. It could be due to various factors like,
a) Alignment to Business needs and strategy
b) Future Roadmap and Strategy
c) Cost pressure
d) M&A (Mergers & Acquisitions) or Divestitures

Many a times IT Product or Service Industry are not observant to these underlying dynamics which could
be due to multiple factors, but in the end, it influences the decision-making process. This causes
misalignment, which results in misinformed decisions and an incoherent solution which does not align
with customers expectations.

It is important for the IT Industry to have the right view of the customer and only then with a holistic
understanding of customer needs can a comprehensive solution be built.

Customer view of IT Industry

Customers have a set of expectations from IT Products and Service Providers. IT Performance is
benchmarked against these parameters, one such set has been well defined in ‘DO IT SMART’.

1. IT should be focused on Product Development

2. Integrate IT into Marketing, Sales and Service
3. Integrate IT to Order Processing
4. Administration IT for Business Planning & Management Development
5. IT should be Top Management Affair
6. IT should be Customer Oriented IT Service Network
 7. IT should be Integrated Standard Software and Future Visioned
8. IT Strategy should be aligned to Business Strategy

A good summary on the top few reasons why customers Outsource services can be found in ‘The
Outsourcing Revolution: Why it Makes Sense and How to Do It Right’ by Michael Corbett.

As the Customer moves up the pyramid, they try to see the value beyond just cost optimization, more
towards improving effectivity and efficiency by using innovative technologies like Cloud, SaaS, Machine
Learning, Artificial Intelligence (AI), Internet of Things (IoT), Blockchain, Data Science, Data Warehousing,
Data Mining, Analytics, Logistic Automation, just to name a few.

Customers should have a clear understanding on the kind of partnership they would like to build with IT
companies based on the strategic values they want to derive from the relationship.

Beachhead and Value Sourcing is more from an investment strategy so that in future it can help build
Strategic relationship with IT Service Provider. Commodity is purely a transactional relationship with IT
Service Provider where the customer does not envisage any future scope of leveraging a Strategic
relationship. It is important to align the IT strategy with Business strategy to build the right partnership
with IT Product and Service Provides.

IT Revolution
So far in both the view points it has been observed that the future roadmap for any customer should be
aligned for Strategic partnership with Innovation to bring out the best in Effectivity and Efficiency. This
partnership or relationship is not a single step but a journey with one step at a time.

The present relationship in IT world for some has already matured up to ‘Strategic Alliance’ and is slowly
moving towards ‘Joint Venture’ for ‘IT Stars’ but there are some who are into various phases of
transformation. It is important both for the customer and IT service provider to understand the current
phase and transformation required to move to the next phase. The evolution in IT Products and Services
is constantly innovating in all dimensions. Customers can align their Business strategy with these
innovative IT strategies to improve IT Performance both in terms of ‘Effectivity’ and ‘Efficiency’.