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ART & SCIENCE
Volume 1

VALUE REALIZATION

630 Fifth Avenue, Suite #1600


New York, NY 10111

2011-2012 Infosys Limited, Bangalore, India. All rights reserved. Infosys believes the information
in this document is accurate as of its publication date; such information is subject to change
without notice. Infosys acknowledges the proprietary rights of other companies to the trademarks,
product names and such other intellectual property rights mentioned in this document. Except as
expressly permitted, neither this documentation nor any part of it may be reproduced, stored in
a retrieval system, or transmitted in any form or by any means, electronic, mechanical, printing,
photocopying, recording or otherwise, without the prior permission of Infosys Limited and/or any
named intellectual property rights holders under this presentation.
CHIEF EDITORS

Stephen Pratt
Raj Joshi
Sharad Elhence

EDITORIAL BOARD

Mathias Herzog
Prakash Jayaram
Frank Samuels
Jonquil Brookes
Oliver Siodmak
Vince Cavasin

EDITORIAL ASSISTANCE TEAM

Sameer Phadke
Manu Tyagi
Jacob Varghese
Jonathan Cohan
Gaurav Mittal
Anand Shastry

MARKETING TEAM

Amandeep Singh Syali


Varinder Verma
Jigesh Haren Shah
Navninder Singh
IMPROVEMENT TRANSFORMATIONAL
GOALS MERCHANT

ASSETS
QUALITATIVE
ALIGNING
ENABLERS
GOODSBUSINESS
GOVERNMENT

STRATEGY ENGAGE
TRANSFORMATION

VRM
NONTRADITIONAL

CHANGE
GOOGLE
RETAILERS
EFFICIENCY
CREDIT CENTRIC
CRITICAL ELECTRONIC

FOSTER
DIFFERENTIATORS
PROCESSES ELEGANT

DELICATE STRUCTURED
INCREMENTAL
COMPETITIVE
CHAIN
CALCULATION
VERTICAL
PROCESSES
MEASURABLE
VALUE EQUATION

FOCUSED
MEASURABLE
CONTROL RELATIONSHIP
METHOD METRICS CASH

VALUE
CUSTOMER
PAYMENTS
QUO
POWER
INCUMBENT

DATA
REALIZATION SPECIAL

GAIN

REALIZING VALUATIONS
QUANTITATIVE
CRITICAL

DEVELOPMENT
UNSTRUCTURED
STATUS
ART
REGULATION

INITIATIVE SYSTEMS INCENTIVES

PREDICTABLE
SCIENCE
EXPENSIVE
MONETIZE BALANCE
FUNDAMENTAL COMPETITIVE

PURCHASE
APPROACH
MATURE
FRAMEWORK
CHALLENGING
SERVICE PROBING

Art & Science Volume 1: Value Realization

6 WELCOME 30 GUNFIGHT AT THE


Stephen Pratt O.K. CORRAL
The Changing Consumer
7 MOONSHOTS & METRICS Payments Landscape
The Art & Science of Realizing Frank Samuels and Inder Dua
Business Value
Raj Joshi 38 THE HOUSEWIFE,
THE SALES FORCE
15 THE MYTH OF BUY-IN & THE COMPANY
What SOX Taught the A Collision Course in Aisle 9
Change Industry Prateek Sinha and Sally Stuart
Holly Benson
42 METRICS WHAC-A-MOLE
19 12 GREAT APPS What Most Companies Get Wrong,
and How to Get Metrics Right
21 INTERVIEW WITH Sharad Elhence and
SALLY BLOUNT Saurabh Agrawal
Dean, Kellogg School
of Management, 48 SOCIAL BUSINESS
Northwestern University The Rise of Unstructured Data
Akash Bhatia
23 CAN YOU HEAR ME NOW?
Common Disconnects in 54 WHY PROJECTS FAIL
Product Development Improve Your Odds of Success
Jeff Kavanaugh and Olu Adegoke Pete Maloof and Brandon Bichler

29 VALUE DIAGRAM

ART & SCIENCE 4


Welcome to Art & Science,

We are thrilled you have joined us for our inaugural issue. Art & Science hopes
to share rare, human, interesting and highly practical insights into the world
of business. We take business seriously, but not so seriously that imagination,
creativity, and freedom of exploration never see daylight.

Our first issue is on a topic near to our hearts value realization.

Not the tired old view of the topic, but a view that breaks down traditional
barriers between the prima-donnas and the propeller heads, the artists and
the engineers, the pragmatists and the dreamers, the mathematicians and
the poets.

As you engage your left brain on the issue of value, we offer one cautionary
word, courtesy of the right hemisphere: beware the tyranny of numbers.
While our inner scientist may rejoice at the triumph of a carefully crafted
calculation or a five-way pivot table, our experience shows that real value
creation requires a delicate dance between the right and left brain. In the
business of value, breakthrough logic and logical connections trump
numbers. Deep thinking, probing, and challenging are the music. Logic
diagrams are the dance steps. Spreadsheets may have a place at the dance,
but only after the party is done, to clean up the place.

From all of us at Infosys, we thank you for spending some time with us.

I would like to extend a special thank you to Sally Blount, Dean of the Kellogg
School of Management, Northwestern University, for her contribution to this
issue.

Stephen Pratt
Managing Partner - Worldwide Consulting & Systems Integration
Executive Council Member

ART & SCIENCE 6


by Raj Joshi

MOONSHOTS & METRICS


The Art & Science of Realizing Business Value

I
n the early years of the space race, the United States
was repeatedly bested by the Soviet Union. Sputnik
was just the first shot over the bow. In 1961, the
Russians shocked the U.S. by sending a man into space.

Within weeks, President Kennedy decided to change the


rules of the game. Instead of continuing to fight toe-to-
toe on his competitors terms and turf, he set the nations
sights on a more far-reaching goal: sending a man to the
moon and back by the end of the decade.

7 ART & SCIENCE


Moonshots & Metrics

It was an audacious vision. It would realizing value from their operations. They
require unmanned test flights, focus on a philosophy of continuous
development of a lunar landing craft, improvement. But that approach usually
testing of new fuels, boosters and engines, leads only to minor incremental change.
and a host of other challenges.
Instead they need to invest in a true
But his was more than just an empty transformation of their business
rallying cry. Kennedy plowed enormous processes. Thats the key to delivering real
resources and investments into the business value and creating a measurable
program. In the first year uptick in shareholder
he tripled the space Realizing business or customer value.
budget. And over the value through measurable More than remaining
next five years, NASA competitive, its about
improvement in business
doubled the number driving step-function
of scientists and process metrics is both change and coming out
engineers involved. an art and a science. on top. And that should
be the priority for every
So while the Soviets continued to prove operations leader.
a formidable opponent in the space race
and won their share of victories over the It is, however, easier said than done.
next few years, the U.S. ultimately claimed Establishing a cause-and-effect relationship
the big prize, essentially leapfrogging the between process change and things like
competition. increased revenue, reduced need for
working capital, and/or reduced cost is
CHANGE MUST BE difficult at best. What is easier and more
TRANSFORMATIONAL practical, though, is to measure business
The lesson? Too many organizations value through material improvement
are thinking small when it comes to in quantifiable process and operational

Establish a direct link between measurable process improvement and realized value

Business Strategy

Business Transformation Objectives

Business Process Level 0 Business Process Level 0


Business Process Objectives

Business Process Metrics


Business Process Objectives

To-be Environment
Business Process Metrics
As-is Environment

Business Process Level 1 Business Process Level 1

Business Process Level 4 Business Process Level 4

Business Transformation Solution

Realized Value

ART & SCIENCE 8


by Raj Joshi

metrics. business, acceptance of change and


Transformation initiatives that are evolving customer expectations.
designed to dramatically enhance the
efficiency and effectiveness of business The scientific element is invoked through
processes typically tend to be complex, logic and structure that enables process
risky and expensive. Its not easy to realize redesign and the use of technology to
aggressive game-changing goals and drive process efficiency.
targets that will truly make a difference
to the organizations positioning in the So if there is indeed a way to establish a
market. game plan that works, why do business
transformation exercises tend to under-
Not surprisingly, transformation journeys deliver and not meet expectations?
often result in underachieving
outcomes but it doesnt have to SETTING EXPECTATIONS IS
be that way. CRITICAL
The first key to success
THE VALUE is to set the right
REALIZATION expectations. Before diving
METHOD into an expensive transformation
Achieving a specific exercise, it is critical for an
improvement in business organizations leadership to clearly
process metrics will drive articulate the overall strategy and to
measurable business value identify a clear burning platform
and this is the premise of for the transformation.
the Value Realization Method
(VRM). From there, leaders must define the
destination for the transformation
VRM is a framework that provides journey, outline the change imperative
a structured approach to delivering and develop a tangible business case.
measurable business value. It creates
more predictable outcomes. It enables A RECIPE FOR MEDIOCRITY
organizations to align operations with Consider the case of a multi-billion dollar
strategy, thereby making processes more company that had seen a gradual erosion
effective. And it gives company leadership of its position in the market. In a highly
the confidence and fire-power to make competitive industry with razor thin
courageous decisions that will drive margins, the organization had consistently
dramatic change for the better. lagged the competition in key financial
measures such as market cap-to-revenue
Realizing business value through and price-to-earnings ratios.
measurable improvement in business
process metrics is both an art and a The companys competitors were simply
science. more efficient, and were thus rewarded by
Wall Street with higher valuations. As the
The art of the game comes into play stock price declined, the board became
when leadership must manage diverse, restless. If the market cap continued to
intangible interacting factors to achieve slide, it would not be long before the
desired process change such as the company became a takeover target.
talent of the team, level of motivation,
desire to innovate, knowledge of the At the urging of the board, top

9 ART & SCIENCE


Moonshots & Metrics

Right Time for Transformation?


3

2.5
COMPANY
Revenue 2
Multiple COMPETITOR B
Ratio * 1.5
COMPETITOR A
1

.5

0
2006 2006 2006 2006 2007 2007 2007 2007 2008 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

From 2006 through the middle of 2008, the competition had clearly out-performed the company. By Q2 of
2008, it was clear that the company had to take strong decisive action because incremental improvement
was not making an impact. Management had no other option but to launch a transformation initiative.

*
Revenue Multiple Ratio = Competitors Market Cap to Revenue Ratio / Companys Market Cap To Revenue Ratio

management instituted several change especially for mature companies that


initiatives to curtail costs and improve have been in business for many years.
performance in the field, including: They tend to evolve on an incremental
basis, taking small steps to maintain the
Resetting the incentive mechanism status quo rather than leapfrog. But in
for the sales function; todays environment, thats a sure-fire
way to lapse into mediocrity.
Focusing
more attention on inventory
management (being a distribution- And investors tend to punish mediocrity.
centric
Executing a complex business
company); and So, the company
transformation initiative that decided to launch
Fine-tuning
actually delivers on its expectations a major business
the guts of its transformation
is hard some would liken it to
operations its initiative to
core processes a death-march! dramatically alter its
and enabling core processes and enabling
systems. technologies, outpace the competition and
deliver superior financial performance.
Although the organization did respond Top management developed and
and deliver incremental gains, the committed to a compelling business case.
competitors seemed to actually enhance The die was cast.
their position in the market and
continued to enjoy healthier valuations But that was the easy part.
(see chart above). It was clear that
incremental improvement was not THE DEVIL IS IN THE
cutting it. EXECUTION
Executing a complex business
The burning platform couldnt be more transformation initiative that actually
stark: achieve dramatic improvement delivers on its expectations is hard
(as measured by key operational and some would liken it to a death-march!
financial metrics) or perish! Clearly, the challenges of such an
initiative should not be underestimated.
This is not an uncommon situation

ART & SCIENCE 10


by Raj Joshi

FIVE PRINCIPLES OF VRM


1 2 3 4 5
Align processes Drive measurable Measure business Integrate Set audacious goals
with strategy to improvement in value through both enablers of process to foster innovation
drive organizational business process quantitative and efficiency and cause paradigm
effectiveness metrics qualitative metrics shifts

But case studies and our experience


suggest that adopting a structured
approach with a keen understanding
2 DRIVE MEASURABLE
IMPROVEMENT IN
BUSINESS PROCESS METRICS
and awareness of certain fundamental
principles can make a material difference.
Moving the needle on key metrics of a
Thats where VRM comes in.
business process is a clear, unambiguous
FIVE PRINCIPLES OF VRM measure of improved process efficiency.
The ability of VRM to deliver For example, if an organization took 15
measurable business value rests on five days to go from quote-to-shipment for a
core principles. normal order but after transforming the
business process the same order now takes

1 ALIGN PROCESSES
WITH STRATEGY TO DRIVE
ORGANIZATIONAL
5 days for processing, then this is a clear
indication of improved process efficiency
and therefore business value.
EFFECTIVENESS
The trick, of course, is to figure out a way
Realizing maximum business value can to deliver this material improvement. And
only be attained when the organizations therein lies the challenge.
business processes (measured through
process objectives Too many organizations
and metrics) are in The most elegant spend millions of
complete alignment business process in the dollars redesigning
with business strategy business processes
and operational and world means little if its
and building
financial goals. If not accompanied by a supporting technology
every activity within
material improvement in solutions only to
a business process is
structured to support process metrics. end up with little or
the broader business no improvement in
strategy, then all of the process metrics. While
organizations assets are aligned in a a structured, methodical approach can
common direction and are therefore facilitate and guide change, thats just the
more effective. science. Only by also mastering the art
of the game deep knowledge of the
Without a structured, methodical business and a creative and innovative
approach to analyzing and refining mindset of the team members will
operations at periodic intervals,
material change occur. The most elegant
material inefficiencies are almost
business process in the world would
guaranteed. Most global Fortune 500
companies today can stand to benefit mean little if it is not accompanied by a
by taking an analytical look at how their material improvement in process metrics.
processes and strategy are aligned.

11 ART & SCIENCE


Moonshots & Metrics

3 MEASURE
BUSINESS

VALUE THROUGH BOTH


CASE STUDY:
Aligning Processes & Strategy
QUANTITATIVE AND
QUALITATIVE METRICS It was the height of the tech boom and the telecom
industry was busy building Americas broadband
data highway. The North American unit of a global
While the quantitative or telecom equipment manufacturer was consistently
tangible measures of time, losing the lucrative #1 supplier position to its
competition. While the secondary supplier role
effort, cost and quality are
helped maintain the companys revenue, losing
clear indicators of process market share during this high-growth period was
performance, softer intangible not acceptable to management.
metrics such as customer After some analysis, the operations team came
and employee satisfaction, to the conclusion that the company was being
organizational risk and brand dinged by its customers for consistently missing
delivery dates. The vice president of operations
can play a significant role in theorized that the inconsistent order delivery
creating or destroying track record was a key contributor to poor
business value. customer satisfaction and this had a direct
causal impact on market share.

For instance, an airline Soon thereafter, management started


facing cost pressures could measuring the operations team on the percent
of orders that met the customers delivery date
consciously reduce the expectations. It was not long before the company
cost of customer service, started hitting close to 100% of delivery date
commitments. Its true you get what
and therefore run the
you measure!
risk of reduced customer
satisfaction, leading to loss But instead of improving, customer satisfaction
actually dropped. And market share followed
of business and business suit. It was time for some introspection and
value. For consumer forensic analysis.
packaged goods companies,
After digging into the problem, the operations
the value of brand is manager realized that the company had shipped
very important, so they partial and incorrect orders. The operations
tend to invest a lot more in team had prioritized delivery dates above
everything else and the company had paid the
quantitative measures such as price for the mistake.
product quality and available
Once the problem was accurately analyzed, the
or on-hand inventory.
solution was reasonably simple. The operations
It takes a balance of managers decided to measure quality of orders
quantitative and qualitative shipped in addition to the delivery dates. Sure
enough, it did not take long for customer
metrics to drive maximum satisfaction to improve and market share
business value. started moving up.

4
It is a known fact that metrics drive behavior. So if
INTEGRATE the wrong metric is measured then the resultant
ENABLERS OF behavior can deliver an undesirable outcome.
PROCESS EFFICIENCY It is also critical that there be strong alignment
between organizational strategy, process
objectives and related process metrics. In this
Lasting operational change case, the targeted metric taken in isolation was not
aligned with the objective of improving customer
that delivers measurable
satisfaction and market share.
step-function business value
can only be realized if the By focusing on the right set of metrics, and aligning
them with strategy, the organization was able to
solution effectively integrates realize value and achieve its goal.
four key enablers: process,

ART & SCIENCE 12


by Raj Joshi

technology, data and people. Although industry. There have been similar
integration of these enablers can be instances in the business world where the
complex, done right, it can create non- need to leapfrog the competition caused
linear value for the organization. organizations to set audacious goals that
fostered innovation and helped change
Technology, primarily applications the rules of the game.
software, tends to be the big-dog in the
transformation game and the interplay When companies embark on a
between business processes and enabling transformation journey, they are typically
technology will consume the bulk of encumbered by knowledge of whats
the transformation bandwidth. But the possible and awareness of the constraints
importance of the other enablers should of their business processes and supporting
not be underestimated. technology. By setting audacious goals,
leaders can empower the transformation
Take the people enabler, for instance team to think beyond the normal and
(commonly referred to as Organization ignore current limitations. When this
Change Management). Employees happens, it sets the stage for
acceptance of change can make or mind-blowing innovation that
break a program. Leadership can radically reposition the
must make the case for change company in the market.
and employees must buy
into it and thereafter be held The business value of
accountable to deliver the innovation, however, can only
change. Moreover, people must be confirmed and validated if
be given the tools the changes lead to measurable
and training necessary to operate improvement in process
in a different way and deliver the targeted metrics and therefore, business
business value. process performance.

Data, too, plays a critical role. Having Launching a transformation initiative is


access to the right data at the right time a big bet on the future. Organizations
to make the right decisions can be a huge take a calculated risk because the measure
enabler to realizing business value. The of success can become a moving target.
ability to consistently make the right What may have seemed like a reasonable
decisions, time after time, requires a finely definition of success two years ago
tuned and synchronized process to push during launch might not mean much if
the data out to the managers. Absence competitors have leapfrogged through
of data, or the wrong data, on the other their own transformation. Or if dramatic
hand, leads to guesswork and that can improvements do actually occur but at twice
lead to bad decisions. the budgeted cost.

5 SET AUDACIOUS
GOALS TO FOSTER
INNOVATION AND CAUSE
A well-formulated business case that
delivers a return on investment based
on targeted benefits and costs can
PARADIGM SHIFTS provide good direction. But in reality,
things change and companies often
President Kennedys audacious goal end up ignoring the original business
spurred rapid innovation in the space case. Without this compass as a guide,

13 ART & SCIENCE


Moonshots & Metrics

transformation journeys inevitably realization of business value.


take longer, cost more and experience
unanticipated twists and turns. One thing is for sure doing nothing is
Along the way, success at innovation could no longer an option. Companies must
provide interesting wins in unexpected constantly monitor their metrics and
areas, and adopting a structured their competitors performance, and be
methodology for executing the program ready to change often to stay relevant in
will create operational efficiencies. But the market. And while transformation
in the end, sticking to the basic premise programs are anything but easy, done
of achieving measurable improvement in right with a little art, some science, and a
process metrics and, therefore, process whole lot of inspiration and perspiration
performance, is the only way to guarantee business value can indeed be realized.

About RAJ JOSHI

Raj is a Global Managing Partner with Consulting & Systems Integration


unit in Infosys.

Raj has been in consulting for 23 years; during that time, he has become an
industry expert on Business Transformation. He is also the key architect of
the Infosys Value Realization MethodTM.

Raj has an MBA and a Masters in Chemical Engineering. He was named


one the worlds top 25 consultants in 2008 by Consulting Magazine.
Raj_Joshi@infosys.com

Q&A
Q How long have you been in Q Are you left brained
consulting? or right brained?
I have had to change my stripes three I was left brained for the first 25 years
times in my career as a consultant. of my career. Over the next 25 years, my
So, although I have been in Consulting right brain has caught up. So as of now,
for 23 years, it seems like I have been the answer is both.
doing this for only seven years!
Q What is your favorite song?
Q What stands out in your mind as
you look back over the past 23 Dream On by Aerosmith.
years?
The chance to be an entrepreneur
with two great firms: first with Deloitte
and then with Infosys.

ART & SCIENCE 14


by Holly Benson

THE MYTH OF BUY-IN


What SOX Taught the Change Industry

W
hen Sarbanes-Oxley burst onto the scene
in 2002, it was an unwitting poster child for
effective change management. In less than
a year, the SOX reforms swept through American
industry; thousands of companies implemented the
stringent, at times even draconian, provisions with nary
a whimper. Sarbanes-Oxley slammed full-force into
corporate America and then just noiselessly slid in.

For anyone really watching, the experience was a change


management Rosetta Stone. Sarbanes-Oxleys rapid and
easy implementation offered a striking template.

15 ART & SCIENCE


The Myth of Buy-In

WHAT WORKED? Buy-in is essentially an unwavering


The legislative mandate, and its particulars, confidence that a new system will work.
were exceedingly clear. Companies invested How do we get there? Proof. Proof that a
liberally in making sure that the message system works, that processes perform as
was not only heard, but understood. promised, that training is adequate, that
Employees were drilled on the new jobs are secure in short, proof that the
provisions. And the threat of jail time for individual will be as successful in the new
breaches loomed large in the C-suite, so regime as in the old. In other words, buy-
CEOs and CFOs drummed accountability in follows adoption, rather than driving it.
into their work forces in a way that left no
room for either doubt or protest. So most transformation programs, which
focus on buy-in, are putting the cart
WHERE ARE WE NOW? before the horse. You cant expect buy-in
A decade later, many of the same until youve achieved the promised gains.
companies and their consultants
seem to have forgotten this lesson. RIGHT ACTION
Organizations that adopted SOX flawlessly For most business transformation
are struggling to get traction for new ERP, programs the vast majority the focus
digital commerce, shared services or other needs to be on what we call right action.
transformation initiatives. And theyre Again, the Sarbanes-Oxley experience
struggling because, in many cases, they holds the key.
are doing the absolute
inverse of what worked What we have is not Good change management
so well in 2002. doesnt focus on tracking
a psychological, lie-down-
how people feel, or on
Instead of taking a on-the-couch, how-are-you- making them feel happy
pragmatic, tactical feeling-about-your-new-job it focuses on making sure
approach to changing problem; its a leadership that they take right actions
employee behavior, in a critical time frame.
problem
most companies are
chasing an elusive quarry It means getting people
called buy-in. Rather than making ready to execute flawlessly on Day 1
sure that employees are clear, prepared, of the new business environment. And
and accountable, they are making sure being ready means being crystal clear
employees are happy and aligned. about their obligations, mastering the
skills to succeed, and accepting hard
Because the focus is misplaced, employees accountabilities that tie choices to
too often are confused about whats personal outcomes.
expected, frustrated because they lack new
skills or the confidence to apply them, LEARNING FROM SOX
and emboldened to ignore expectations Countless published studies have
because they know there is demonstrated that people problems are the
no accountability. number one cause of failure in large-scale
business transformations.
WHATS WRONG WITH BUY-IN?
Theres nothing wrong with happy And we submit this is because the change
employees. But the issue with buy-in, industry has been approaching people
when youre changing fundamental problems in the wrong way for the past 20
business processes, is time. years. What we have is not a psychological,

ART & SCIENCE 16


by Holly Benson

Good change lie-down-on-the-couch, how-are-you-feeling-


about-your-new-job problem; its a leadership
management doesnt problem that requires more of an on the bus
focus on tracking how or under the bus approach.

people feel, or on making When it came to Sarbanes-Oxley, corporations


them feel happy it invested in training employees on exactly what they
needed to do. They were trained in classrooms,
focuses on making sure and online. Employees knew what
that they take right they needed to do (or sign) on Day 1.

actions in a critical In addition, there were clear consequences.


Do this, or go before the SEC. Any questions?
time frame.
This experience teaches us that, however
counterintuitive it may seem, a hard-lined approach
to the supposed soft stuff is the number one
way to make sure business case benefits flow to the
bottom line.

When Buy-in Works


Interestingly, buy-in based change programs can work but only in a
singular circumstance. They work when the time frame is open-ended.
Based on the science of product diffusion how product innovations
diffuse through a marketplace these programs focus on attracting
end-users to a future state, and on enticing a critical mass of early
adopters as quickly as possible, who ultimately create a tipping
point.

Consider, for example, a familiar device. In the 80s, a novelty


called the car phone hit the scene. A province of the super-
wealthy, it was only to be used in dire emergencies. Over time,
the car phone was adopted by more and more business people
as a convenient way to return calls while driving to meetings. And
then one day, the car phone became untethered. Even reluctant
technophobes bought in to the convenience of having what was
now called a cell phone. And thirty years later, 77% of the worlds
population (5.3 billion people) carries a mobile device.

The defining attribute of the car phone story and other buy-in based change
programs that work is their open-ended time frame for adoption. In reality, this
is anathema to most major business transformations, where there is a hard go-
live date and a requirement that every person perform as expected on Day 1.

17 ART & SCIENCE


The Myth of Buy-In

About HOLLY BENSON

Holly is a Partner in the Organizational Transformation practice of Infosys


Limited. She is also an expert in Shared Services strategy
and design.

A 30-year business veteran, Holly spent the first half of her career in
petroleum exploration. While still with a Fortune 10 oil company, she
became fascinated with questions of strategy, leadership, and organizational
change, which ultimately led to a career change. Now she brings her pragmatic
management experience to clients, helping them find realistic solutions to the
Holly_Benson@infosys.com vexing people and organizational challenges of business.

Holly holds a B.A. and M.A. in Geological Sciences and was named one of
Consulting Magazines Top Women in Consulting in 2008.

In her spare time, Holly owns a mineral and fossil gallery and a coffee bar in
Taos, New Mexico and paints in watercolor and oil.

Q&A
Q What is the strangest thing youve Q What would you never
ever been paid to do? be caught without?
Model the basin subsidence and A sense of curiosity. And a clean
hydrocarbon maturation profile of the conscience.
Michigan Basin. Not what youd expect
from an Organizational Transformation Q Favorite song.
consultant, is it?
Rolling Stones, Honky Tonk Woman.

Q If you had to boil all your


consulting knowledge down to Q Favorite airport.
one principle, what would that be?
Albuquerque (ABQ): Pueblo
Clarity: of role, strategy, direction,
architecture and a great art collection.
objectives, values and priorities.
Lack of clarity is the taproot of all
evil in business.

ART & SCIENCE 18


Zosh Kayak

Dropbox TripIt

Wikipanion Flighttrack Pro

Flipboard SoundHound

Instapaper Pandora

OmniFocus Audible

No {Truly}
Smartphone
can be Without

19 ART & SCIENCE


M any in the tech industry say the iPad and the iPhone changed
everything so quickly that in a very few years even laptops
will be gone. Meanwhile, over a hundred tablet computers debuted
at this years Consumer Electronics Show in Las Vegas, all hoping
to displace the iPad. And smartphones running Googles Android
operating system are beginning to challenge the iPhone. Technology
is changing the way we interact with each other and the world with
whiplash-inducing acceleration.

Nevertheless, its not only the device that is having the ultimate impact: its the software.
And software in the future will be distributed to us as apps, small applications that we
download from our platform vendors app store. Apples iTunes Store has already caused
a revolution in software development and distribution, providing everything from rock
concert lighters to calorie counters, star charts and bar code readers.

Not far in the future, well see apps that remotely manage health conditions and report
back to the physician, and apps that can turn on your homes lights, air conditioning, and
washing machine and your car.

Today there are over 350,000 mobile apps in the iTunes store, and almost 100,000 for
Android. But if you are in business, the number you actually use drops precipitously.
Here are our favorite must-haves for productivity, travel, and enjoyment:

PRODUCTIVITY: ENJOYMENT:
On the road and need to sign something? Because life isnt all work, your
Fill in and sign electronic documents smartphone should also have
on the go with Zosh. For syncing files SoundHound, the nearly magical music
between desktops and devices, theres identifier that can listen to ten bars of a
Dropbox, and for reading Wikipedia on song you sing (even off-tune), and tell you
a 4-inch screen, try Wikipanion. Catch its name and where to buy it. Pandora
up on the news with Flipboard, your is for custom-generated internet radio
personally-curated magazine for iPad, or stations, and Audible is a must-download,
save it to read later withInstapaper. Get where first-rate narrators read books aloud
more done with OmniFocus,a powerful that you would never have time to sit down
task manager with live, automatic and read.
syncing, location-aware custom actions
lists, and on-the-fly task entry. Weve left off this list the apps that
probably manage your personal life:
TRAVEL: your Mint personal finance software, the
Kayak is currently the best mobile app American Express app, your online banking
for finding flights, comparing prices, and app, and lest we forget, Facebook. But you
making reservations. Once you have an already knew about those.
itinerary, email it to TripIt,an excellent
way to manage all your travel plans in one
place. Then see if your flight is on time
with Flighttrack Pro, a must-have for
road warriors who need to stay on top of
weather delays and airport maps.

ART & SCIENCE 20


Dialogue
with Dean
Sally Blount
Dean, Kellogg School of Management,
Northwestern University

1 We know the common answers, but what three or so uncommon


characteristics make a great business leader?

Holism a leader must have the ability to identify, articulate and


protect the core of the organization, as a collective, separate from
the needs and demands of any single individual or group within the
organization.

Grit leadership requires perseverance, courage, and canniness all in


one day after day after day after day.

Gratitude remembering that no matter how challenging the job of


being the leader can sometimes get - doing what we do in this time and
place were so incredibly blessed.

2 What is the biggest surprise you have experienced in your role


as leader of one of the worlds leading educational institutions?

Learning once again how important communications, both tactical


and strategic, are to leader effectiveness. I feel like I keep learning that
lesson over and over, at every stage of my career. I learned it in the
classroom as a professor at the University of Chicago. I learned it in
my first deans job at NYU. And I have just learned it again during my
first year on the job here at Kellogg. Being a dean requires meeting the
needs and expectations of an incredibly broad range of stakeholders
from students, faculty, professors, alumni, trustees to global partners
and the media. Doing that well is all about effective communicating.

3 Is social networking and texting helping or hurting the


education of our future leaders?

On the upside, it is clear that social networking and texting have


accelerated some aspects of how our future leaders organize their
thoughts, share ideas and mobilize collective action. These tools have
also empowered them to be networkers very early in life.

21 ART & SCIENCE


On the downside, as a psychologist, I worry about how these tools may
promote shortened attention spans, which may inhibit the long-term
ability to engage in complex problem solving. They may also mean that
many of our future leaders have less experience than prior generations
in building meaningful one-on-one relationships before entering the
workplace. I see it with my own children so much of their relationship
building is done on-line in very public forums.

4 Women leaders have great, and largely untapped, potential for


businesses. How can CEOs do a better job in this area?

Flexibility and creativity in structuring jobs and managing career


progressions for women are essential. My own career offers a vivid
example of a female leader who almost wasnt.

Early in my career, as a professor and working mother trying to get


tenure, both of my children encountered some difficult circumstances
that required extra attention. And this was in the years before academic
institutions were stopping the clock or granting parental leave, so it was
tough. But even so, academics offered a work environment that allowed
me flexibility regarding when I put in my hours I could do it nights and
weekends, as long as I got the work done. So I was able to give my children
the attention they needed during those periods without derailing my
career (just my sleep!).

Without that flexibility during those early years, I would have left the work
force to care for my children. I know many well-educated bright women
who did not have the same flexibility at work and did quit. Now that our
children have grown, they are struggling to find meaningful work upon
reentry. Thats a net loss to our society.

5 What is the most common mistake companies make in business


strategy? What is your favorite example of strategy gone bad?

The most common mistake I see is a lack of coherence in strategy setting


and execution. Strategy is all about making clear plans and sticking to
them. Yet, organizations get easily distracted in both tasks. Theres a
great new book by two Kellogg alumni written on this topic: The Essential
Advantage by Paul Leinwand and Cesare Mainardi.

6 Music is very important to our company. What is your


favorite song?

One of my favorite groups is Everything But the Girl, and if I had to pick
one of their songs that has spoken to me over the years, it would be We Walk
the Same Line. It speaks to me of what I try to bring to my relationships as a
mother, a partner, a daughter and sister, a friend and a leader.

ART & SCIENCE 22


by Jeff Kavanaugh & Olu Adegoke

CAN YOU HEAR ME NOW?


Common Disconnects in Product Development

A
t Apple, the now-iconic company that brought
us the Macintosh, the iPod, the iPhone, and now
the iPad, the final gating factor before a new
product launch is always the CEO, Steve Jobs. Conversely,
at Google, it often seems to be no one; Google Labs is an
almost automated launch pad for products that may not
be ready for prime time, but are brought out for trial runs
and quickly iterated or removed.

23 ART & SCIENCE


Can You Hear Me Now?

Hardware product development is The first one occurs between customer


known for taking time and needing to needs and company priorities. While an
get it right, since mistakes with physical overly zealous devotion to customer input
components carry a high cost. Even can be limiting, most non-tech companies
though virtual prototyping and 3-D err in the opposite direction, and customer
printing are starting to change the needs take a backseat to internal priorities.
economics of scale, most companies still This overemphasis on company financials
adhere to the risk-conscious measure is especially prevalent in economic
twice, cut once philosophy of physical downturns, when R&D funding comes
product development. Even Apple has under pressure.
to make sure its products are designed
and produced correctly for the market. The reality is that a balance is required, and
On the other hand, software product new products should be developed that
development is legendary for its speed demonstrate a link between customer value
and competitiveness as portrayed and company value.
in The Social Network, Facebook
was launched quickly and This requires strategies similar
followed with rapid tweaks to those used by software
that continue to this day. companies: multiple,
Unfinished products small, agile releases
are often released that quickly gather
to the market, whose feedback and iterate.
feedback is used to finish
the product development cycle. The next disconnect is between
These companies operate on the individual new products and the
principle release early and often, with portfolio of existing products already
rapid product iteration and improvements. being produced. New product decisions
Thats how you disrupt markets. tend to be made in isolation, disconnected
from their impact on the overall product
But not every company is Apple or Google, portfolio. Products are too often judged
and not every new product aims to be and funded on their individual merits, or
disruptive. Some, like Diet Coke, are brand worse, on political considerations rather
extensions, and others, like Toyotas Prius, than on their relationship to other products.
are responses to market forces. Others, The Apple iPod products (Classic, Nano,
like a telecom companys voice + internet, Shuffle, and iPod Touch) are examples of
can be a bundled offering, and theyre all products proactively developed to be a
necessary to the shareholder value of an family, rather than as isolated offerings.
enterprise.
The third disconnect is between a new
New product development is the lifeline products estimated value at inception and
of any company; its what sustains growth its realized value after launch. Even if the
over decades, even centuries. But in tough original business case is approved with a
times, companies are tempted to cut R&D portfolio perspective, most companies fail
dollars, and avoiding some common pitfalls to update the estimate of product
can be a force multiplier. value contribution over the development
process, or against an updated view of the
THREE DISCONNECTS product portfolio. They figure that value
There are three critical disconnects we see
regularly in new product development. determined once is value forever. But this

ART & SCIENCE 24


by Jeff Kavanaugh & Olu Adegoke

is never the case. Customer needs change, environment. Theyre dialed into customer
product portfolios change, and new product needs and cooking up new ideas and
specs often need to change to keep up. products. Their whole reason for being
is to optimize the customer experience,
Connecting these common gaps in product and theyd like to do so without cost
development can help companies convert constraints, thank you very much.
the usual challenges into powerful enablers They brainstorm ideas all day long.
for long-term growth.
On another floor, or in another building, the
CONNECT THE GAPS suits are hard at work in walled offices,

1 CONNECT THE COMPANY


TO THE CUSTOMER
The most radical example of connecting
thinking about productivity and efficiency,
and preparing presentations to senior
management that calculate net present value
the companys priorities with those of the and return on investment. They look at cost
customer is perhaps Threadless, a Chicago to serve and how to optimize processes.
company where customers have a direct say
in every product the company offers. Smart companies are finding ways to bring
the two together, so customer and company
Heres how it works: Threadless customers value can be integrated in every new
submit designs, a community of online users product, and not viewed in isolation.
votes on their favorites, and only
those shirts get made. The result? Every This is so critical because the starting
t-shirt the company point for any new product
produces sells out. The most radical development process is
As Inc. Magazine put example...is Threadless, generating effective ideas.
it, at Threadless, And these ideas must
where customers have a
the customer is be based on a thorough
the company. direct say in every product understanding of customer
the company offers. needs the kind of
This seamless (if understanding that comes
you will) integration between customer from first-hand knowledge shared by
research and product development is a cross-functional team of marketing,
something most businesses can only dream product, engineering, and operations
of. Product development personnel.
is guided entirely by the customer.
So thats the first step: bringing together a
According to an APQC study, only about cross-functional team to sift through and
a third of businesses include customer evaluate new product ideas.
research and metrics in their new product
development process. The rest measure These ideas then need to be weighed
success solely on internal factors (will against both internally focused criteria
the product make money? Can we ship it like technical and commercial feasibility, and
according to our plan?). customer-centric criteria like user experience
and cost. In practice, you need only a limited
At many companies, this internal/external set of well-selected criteria measuring
divide is an ingrained part of the culture, company and customer value to help make
and thats where the problem starts. On one effective decisions. Dont make it more
side you have the creatives, off in a separate complicated than it has to be.
building with purple walls, bean-bag chairs
and a no cube innovation-encouraging Once you get going on a new product,

25 ART & SCIENCE


Can You Hear Me Now?

dont lose the voice of the customer. As strategy channels resources toward the
the product development process moves most promising products, and aligns new
along, the customer voice tends to be product development to the companys
gradually drowned out. Engineering takes overall strategy: Are you a market leader
over, and the product marketers who talk to or fast follower? An Apple or a Microsoft?
customers no longer stay involved. Each has different product development
needs, in terms of speed-to-market and
Dont make this mistake. Product marketers level of innovation. Is this the right product
must stay attached from idea to execution. lineup to provide a competitive edge or
market leadership?
Another way to maintain the customer
voice is to observe lean startup A portfolio approach can also save money.
principles. Some products perform better In the auto industry, designing similar
when an early, less functional version is chassis for multiple vehicles has enabled
released to customers. So in the case of car companies like Toyota to leverage
Google Labs, users are invited to play technologies across their products,
around with prototypes of the companys significantly reducing R&D complexity
latest ideas, and offer and costs. And Apple has
feedback directly to the accomplished a similar
engineers who developed benefit by leveraging
them. The process is common sources for glass
highly iterative, unlike and chips in its iPod, iPhone
waterfall development, and iPad products.
which assumes that
once decisions are While all product
made, downstream managers in a company
stakeholders must live may benefit from
with them. improving underlying
capabilities, no one person or function
A final way to maintain the voice of the wants to bear this cost individually as part
customer is to actually observe them using of her own project. To do so would likely
your products. Procter & Gamble has drive any project below acceptable business
been an avid promoter of this technique, case justification.
actually going into customers homes to
observe how they use dish soap, or how So strong leadership is required from
they handle laundry detergent. Business- the CEO, chief product officer, and line
to-business companies could learn a lot by business executives, not only to implement
adopting a similar approach. an effective portfolio management strategy,
but to sustain it over time.

2 CONNECT THE NEW


PRODUCT TO THE
COMPANYS PORTFOLIO 3 CONNECT THE PRODUCT
TO ITS BUSINESS CASE
The strength of a business lies in having Although nearly all companies estimate a
a portfolio of products to meet different products potential value at the beginning
customers needs. But companies too of the product lifecycle, most of them stop
often view individual projects in a vacuum there. They create the business case, get
instead of balancing their portfolios. it approved, and then it gathers dust on a
shelf somewhere.
An effective portfolio management

ART & SCIENCE 26


by Jeff Kavanaugh & Olu Adegoke

Instead, companies should revisit the value as a quality control checkpoint where yes/
equation at specific, defined intervals. A no decisions are made on whether or not
stage-gate management process provides a to move forward.
ready mechanism for this.
While this sounds obvious, and all
Stage-gate management breaks the companies do this in some manner, few
innovation process into multiple stages,
actually take full advantage of what stage-
with each one consisting of a set of tasks.
gate management can offer. Beyond quality
There are typically four or five major gates
assurance, it can be a powerful tool to lean
from business case generation through out the product pipeline and maximize
product launch. The gate typically serves
yield on investment. Think about it: how
much of your design and
testing resources are spent on
features that customers do not
About Stage Gate Decision-Making: value, or for which the financial
assumptions are no longer valid?
The stage-gate process optimizes
resource allocation through each
CONNECTIONS = VALUE
phase of the product development Though product development
process, from idea generation to is probably the most important
launch. It can ensure that ideas dont enterprise process, many
go any further than their merits allow product launches fail to meet
at any given time.
expectations. There is significant
One of the greatest advantages of potential for improvement in
stage-gate management is that both top-line revenue growth
spending can be low at the beginning and more effective allocation of
and increase in a non-linear manner
resources. Success depends on
as stages are completed. If problems
closing the gaps in the process.
are addressed or prevented in the
early stages, more resources can
be committed to new products and New product development
features with the greatest potential for efficiency and effectiveness
customer and financial success. can be built upon a few time-
Implemented correctly, stage-gate honored principles: connecting
management can improve teamwork, company and customer value;
accelerate products to market, give effective portfolio management;
structure to the innovation process, and updated value measurement.
reduce rework and improve success
rates on new product deployments
Taken together, these principles
Before moving on, ask these questions: form a practical framework for
Are the objectives the same as exceeding customer expectations
when we started? while delivering financial and
operational success.
Are these the right activities to
meet those objectives?

Are the features still appropriate?

Are we on track to achieve the


intended value?

27 ART & SCIENCE


Can You Hear Me Now?

About JEFF KAVANAUGH

Jeff is a Partner in the Manufacturing practice of Infosys Limited. He is


also responsible for some of the firms strategic clients.

Jeff has been in consulting and industry for more than 20 years; over that time
he has become a noted expert on product development and supply chain.

Jeff has an MBA and Bachelors in Electrical Engineering, and is a Lean


Six Sigma Master Black Belt.
Jeff_Kavanaugh@infosys.com

About OLU ADEGOKE

Olu is a Senior Principal in the Communications, Media and Entertainment


practice of Infosys Limited.

He is a 16-year veteran of the communications industry. During that


time, he has helped launch two wireless service providers and one mobile
payment company, and has worked with established companies like Cox
Communications, AT&T, Verizon, Belgacom, Portugal Telecom, Equant,
and Orange.
Olu_Adegoke@infosys.com
Olu holds an MBA in Finance and Strategy from Cardiff Business School,
University of Wales, UK and a Mechanical Engineering degree from
University of Ilorin, Nigeria.

ART & SCIENCE 28


VALUE When companies invest in large transformations, theyre doing so to return value to the company and to customers. But several years down the road, its easy to lose
sight of these original motivations. Value Diagrams are a great way to stay on track. They provide a clear line of sight from a companys myriad change initiatives to the
DIAGRAM specific levers that drive company and customer value.

VALUE FOR CUSTOMER VALUE FOR COMPANY

CUSTOMER CUSTOMER COMPANY COMPANY


CHANGE
VALUE OPERATIONAL OPERATIONAL VALUE
INITIATIVE
LEVERS LEVERS LEVERS LEVERS

Improve Acquire New


Buying Project A
Markets
Experience

Reduce
[Illustrative] Transaction Project B
Cost

Improve User Develop


Experience Project C New Offerings

Reduce
Project D
Operating Cost
Reduce
Cost of Doing Increase
Business Revenue
Increase Optimize
Project E
Self-Service Portfolio

Customer Increase
Transparency
Project F Free
Value Index Improve
Customer
Reduce
Product Cost Cash Flow
Service
Willingness to Pay Increase
Reduce Product
Shareholder Value
Contracting Project G
Options Complexity

Increase
Set Up Project H
Options

Reduce Cycle Improve


Time for Dispute Project I Sourcing
Increase Resolution Increase Asset
Revenue for
Productivity
Customers

Enable
Faster Project J Implement Lean
Time-to-Market Operations

Reduce
Project K Rework

ART & SCIENCE 29


by Frank Samuels & Inder Dua

GUNFIGHT
AT THE O.K. CORRAL
The Changing Consumer
Payments Landscape

T
here was a time, long ago, when the
relationship between a merchant and his
customer was simple and direct. The customer
purchased goods in cash or on a personal account at
the store, and the merchant got to keep all of what he
was paid.

Then the rise of the credit industry ushered in an era


of unprecedented convenience for customers and
retailers alike. But convenience, like everything else,
comes at a price. And much of that price is being paid
today by retailers.

30 ART & SCIENCE


Gunfight at the O.K. Corral

Just follow the complex value chain in a And electronic payments versus paying
typical credit or debit transaction, and you by cash or check are only going to
can see how many parties have a piece of increase in popularity. In just the last
the action and how big their stake is: decade alone, theyve gone from less than a
third of total transactions (in dollar value)
First, a consumer goes to a retailer like to almost two-thirds.
Target, and uses a credit or debit card to
buy $100 worth of stuff; Its no wonder retailers are itching to
do something about the current value
The Merchant Acquirer, a bounty chain (and questioning just how much
hunter who signs up retailers to use actual value each
Visa or MasterCard, gets a CONSU
member
brings to
MER m
$0.40 cut; purch
ase
akes
$100+
the table).
MERCH
Then the Payment Network Owner A bo
signs
ANT A
unty
CQUIR
hunte
ER And now
-0.40
(Visa or MasterCard) takes a cut of is the time
r th
use V up retail at
isa o e
r Mas rs to
to act. Over
terCa
about $0.15; PAYME
rd

Visa,
NT NE
Maste
TWORK
O WNER
the next
rCard -0.15
The Transaction Processor, several years,
TRANS
who handles all the back-end Back-
e
ACTIO
N PRO
CESSO a combination
trans nd proces R -0.
underworkings of the purchase, actio
n
sing
o f
15
of external
then comes in and takes his ISSUE
R BAN
trends and new
K
$0.15 cut; and players on the
Manag
e
relat the cust - 1 .
ionsh omer 60=
ip
scene promise to
Finally, the Issuer Bank, who
MERCH
ANT f
inal completely upend
manages the relationship
$97.7
0*
the status quo.
with the customer, gets the
biggest cut, at $1.60. The coming battle
should be epic,
So of that original $100, the merchant reminiscent of the
gets to keep $97.70. Gunfight at the O.K. Corral only
with less violence and more chaos. The
Thats the system as it has stood pretty first round of the shootout is already
much since the dawn of the credit era. underway, and retailers stand to gain not
While a mere $2.30 of every $100 may only a bigger piece of the action, but a
not seem like a huge price to pay, consider closer, richer relationship with
this: electronic payments (debit, credit, etc.) the consumer.
by consumers totaled almost $6 trillion last
year. Of that, merchants paid almost $136 Lets review the cast of characters and their
billion to these other parties. stake in the fight, examine the big solution
that everyones aiming for, and look at
THE WILD, WILD WEST how the various plans and schemes may
Up until recently, the merchant has had very shake out.
little bargaining power in this arrangement.
But imagine shaving just 10 cents off that KEY PLAYERS SHAPING
$2.30: thats almost $6 billion. How about 50 THE BATTLE
cents? Now were talking about real money The status quo is clearly under attack,
almost $30 billion. and its coming from all sides. Here are

ART & SCIENCE 31


by Frank Samuels & Inder Dua

a few of the players and whats driving advantage of feature-rich phones with
their actions. special payment apps offers the wireless
carriers an attractive foothold into the
SMARTPHONE-WIELDING payments industry.
CONSUMERS HAVE MORE POWER
AND CONTROL THAN EVER FRINGE PLAYERS ARE LOOKING TO
Todays smartphones can originate and JOIN THE BATTLE
consummate transactions as well as store, Companies like Google that now have a
manage, and exchange information in small piece of the consumer payments
a secure manner. This gives consumers industry are exploring ways to expand
the power to conduct more and more their footprint, either by integrating with
electronic transactions from any place at existing players or bringing in new ones.
any time. Handsets could ultimately replace Google Checkout is now expanding from
the physical wallet as the major receptacle online to actual in-store payments
for all manner of cards debit, credit, through the introduction of a new
prepaid, loyalty, rewards and even ticketing. smartphone. Theyre exploring other
Consumers could also use capabilities, like mobile banking,
them to take advantage of It is clear that an advertising and identity
digital merchant offers management.
alternative payment
(e.g. coupons
and other transaction- platform based on a mobile GOVERNMENT
based rewards). network is the ultimate REGULATORS
industry direction ARE CRACKING
MARKETERS ARE DOWN
HONING THEIR TACTICS Recent legislative and regulatory changes,
Advertisers are moving away from static, from the 2009 Card Act to the creation
mass media blitzes and paper coupons to of a new consumer advocacy agency,
focus on a clearer return on investment promise to restrict the credit card
with lower risk by targeting individual industrys marketing and interest rate
consumers, in real time, and with ever practices and impact profitability (to
more precision. Combining smartphones, the tune of $50 billion over the next
the ability to determine the location of five years in the case of the Card Act).
the consumer, and digital coupons gets Its likely that issuers will find a way to
marketers closer to the Promised Land: recoup some, if not all, of the losses
more certain return on their investments from the merchants, or from consumers
and prompt feedback through real-time through modified card agreements.
coupons and rapid redemption.
This brings us back full circle. As the
WIRELESS CARRIERS ARE various players battle it out, retailers will
AGGRESSIVELY SEEKING NEW want to pay close attention in order to
REVENUE STREAMS protect their interests, minimize total
The telecom industry has this huge payments to each party, and gain more
fixed asset base the mobile networks control over the battlefield.
they painstakingly built and theyre
looking to squeeze every last dollar out THE SHAPE OF THINGS TO
of them. Strong competition from the COME
likes of Skype and Google Voice has only Based on the early moves of these key
increased the urgency to do so. Taking players, it is clear that an alternative

32 ART & SCIENCE


Gunfight at the O.K. Corral

A Mobile Payment
Network Primer
A mobile payment network facilitates financial
transactions over a wireless network through
applications and information residing on the
mobile handset. By storing a consumers
existing credit, debit or pre-paid card
information within the phone and employing
near-field communication (NFC) technology,
the mobile phone can be waved near a
payment platform based on a contactless point-of-sale (POS) terminal to
mobile network is the ultimate complete transactions.

industry direction. [See sidebar: A Mobile Wallet as a key part of the overall
A Mobile Payment Network solution provides consumers with the interface
Primer.] to choose a preferred payment method (debit,
credit, prepaid, etc.). Turning a mobile phone
The goal of such a network will
into a mobile wallet involves adding four
be to unbundle the traditional elements to the device:
payment value chain, redesign
NFC Chip, which enables mobile devices
the value equation, and then
to send account information to contactless
selectively reconfigure it payment readers at customer checkouts
to capture in some distinct and other point-of-sale systems;
advantages for whoever gets
A Secure Element, which is used for storing
there first. and accessing applications and financial
data in a secure manner;
Success will require scale and
A Wallet Application, which allows a user
some strategic partnerships.
to manage payment accounts, initiate
Each player or group of players contactless payments, and, through an
seeking to set up a mobile interface, take advantage of additional
payments network will likely services such as advertising, mobile loyalty
and ticketing; and
still partner with or leverage
most of todays incumbents Personalized Account Information, which
(merchant acquirer, payment is applied at the point of sale to validate the
identity of the customer.
network owner, etc.) but may
also attract new participants Mobile payment networks are not an entirely
like mobile network operators, new concept and have been rolled out in some
to help provide the last mile other countries. Japan boasts the largest
deployment of contactless mobile phones
connection. used for making payments in the world by far,
a rollout that began six years ago. More than
How these partnerships are 60 million phones carrying the NFC-like FeliCa
structured and who takes on the chip from Japans Sony Corp. are in circulation.
These phones are used for a wide range of
leadership role will go a long way services like transit ticketing, airline check-in,
in defining who comes out on and building access, to name a few.
top and how long they stay there.
There is evidence of strong consumer interest
in the US and various financial institutions are
HOW WILL THIS cautiously evaluating their options while trying
MOVIE END? to understand the economic benefits and
As the consumer payments challenges it could bring them.

industry transformation unfolds,

ART & SCIENCE 33


by Frank Samuels & Inder Dua

we see at least five potential scenarios. SCENARIO 2:


At the moment, the first two appear to ATTACK OF THE GOOGLES
hold the most near-term potential, as the
battle is already engaged. But things are Technology players see an opportunity to
changing rapidly and anything can happen. add new revenue streams by encroaching
Lets look at each scenario and on the payments value chain and building
assess whos leading the charge, out new business models like mobile
what theyre fighting for and the coupon transaction processing.
potential outcomes:
Google has launched
SCENARIO 1: a smartphone, the
WIRELESS Nexus S, and acquired a
OPERATORS RULE company called Zetawire,
to take full advantage of near-field
As their core business becomes more communication (NFC) technology, which
competitive, wireless carriers are looking to allows consumers to wirelessly retrieve
leverage their existing mobile networks and information from items they want to
subscriber relationships to create additional purchase or simply get more information
revenue. They see an opportunity to about the item from publicly available
provide more profitable value-added sources.
services, like payments and advertising,
which will drive increased data usage. Google also plans to provide the software
necessary to process payments for all
Three of the four major wireless payment networks and issuers. The
providers AT&T, T-Mobile and Verizon company aims to earn revenues from
have announced a new joint venture processing fees, mobile coupon transaction
called Isis, and its early proof that a processing, and other value-added services.
nationwide mobile payments network is
already becoming a reality. Google is also exploring the
complexities of location and context in
Working in concert with Discover and delivering filtered information and will
Barclaycard, the idea is to enlist key undoubtedly leverage the phone and the
partners from each segment of the largely Android operating system to strengthen
physical consumer payments value chain their current position in the mobile
and then configure a mobile payment marketing space.
network brand to compete with the likes
of Visa and MasterCard. Look for other technology players to
emerge as well, like Square, a 2011
While Isis plans to run an open mobile market entrant that enables anyone to
payments platform, we expect that this accept credit card payments anywhere,
joint venture will elicit some strong using a small device connected to the
competitive reactions. Right now, Isis may audio jack of an iPhone or iPad.
have drawn first blood.
SCENARIO 3:
As the competition further stiffens, REVENGE OF THE MERCHANTS
look for all the wireless carriers to try
using their existing mobile networks and Merchants see an opportunity to reduce
subscriber relationships to wedge their current interchange fees and to also
way into services like mobile payments provide targeted marketing and
and advertising

34 ART & SCIENCE


Gunfight at the O.K. Corral

promotions to consumers in real time, MasterCard (MasterCard Mobile Money


resulting in increased foot traffic and sales. Send) and Visa (GO-Tag) have already
ventured into this space with some
As early as 2008, cafeteria operator Sodexo success, with the support of issuers like
partnered with transaction processor First Bank of America, Wells Fargo and HSBC
Data and MasterCard on a successful Bank. Visa has introduced a product
trial of a stored value card. BART, the that can transform most smartphones,
public transit system in San Francisco, including Apples iPhone, into a
also partnered with Jack in the Box, Sprint, payment device that can store multiple
and First Data on a local trial that card accounts in an e-wallet.
included payments as well as retrieval
of coupons from a Radio Frequency The network owners may be a sleeping
Identification-enabled (RFID) poster. giant, but they can surely hear the gunfight.

A merchant like Walmart could also look SCENARIO 5:


to partner with issuers, mobile networks ISSUER BANKS SPREAD THEIR
and payment processors on a mobile WINGS
payment network built around its front
and backend systems. Banks may see an opportunity to poach
new customers via mobile network users
Merchants dont necessarily have to and provide the next generation of
jump on the bandwagon immediately, services. More expediently, they may try
but exploring options is a good idea. to extend their current role to include
They all want to reduce the interchange processing payment transactions, earning
fees they pay and some of the 30 cents
better target their Merchants stand to recapture per $100 transaction
customers with a share of the value that is lost themselves.
promotions in
under the existing model.
real time. An issuer bank or a
consortium of banks
SCENARIO 4: could conceivably band together with a
THE OLD GUARD FIGHTS BACK technology provider like Apple to build
out an independent, standalone and
Facing pressure, the incumbent network open mobile payment network.
owners might seek to inoculate their core
payments business from erosion and Some have already dipped a toe in the
hedge their bets by participating in the water. Bank of America recently began
evolving mobile payments space. testing technology to turn smartphones
into payment devices, while JP Morgan
Under this scenario, MasterCard or Visa Chase and Wells Fargo are developing their
could partner with one of the wireless own pilot programs, according to Visa.
carriers to build a mobile payment Additionally, U.S. Bancorp will begin testing
platform. They would essentially take similar technology in multiple states and
over the role of the mobile payment plans to offer it to select customers in 2011.
network operator and potentially
extend their partnerships with issuers, The issuers may be behind, but with a
merchants and payment processors. $1.60 share of every $100 transaction, they
clearly have the biggest stake in this fight.

ART & SCIENCE 35


by Frank Samuels & Inder Dua

THE AFTERMATH For now, retailers will want to keep


These five scenarios are all real a close eye on the battle taking place
possibilities over the next three years. We in the first two scenarios. Whether or not
anticipate that competitive responses to merchants choose to join the fray, they
the first would do well to ensure they have enough
two scenarios, already in play, will spawn flexibility in their corporate structure to
the next three (or some blend thereof). address opportunities that arise.
Success or failure will rest on at least
three factors: Regardless of which scenario prevails,
its clear that merchants will no longer
Who plays the lead role an incumbent have to settle for the status quo. At a
or a new entrant; minimum, they stand to recapture a
share of the value that is lost under the
Whothey partner with to fill the existing model. Recovering about 30
other roles incumbents and/or new cents from the cost equation is realistic,
entrants; and and that amounts to almost $20 billion in
cost savings for them annually.
Whatcapabilities they choose to build
as key differentiators. Beyond that, merchants could gain
immeasurable value through a closer,
Looking beyond three years, its anyones more robust relationship with their
guess what the consumer payment customers, while boosting sales volume
industry landscape will look like. through new services.
One thing is clear, though: it will look
nothing like the current state. With David Haffty and Benjamin Hoster
contributing

36 ART & SCIENCE


Gunfight at the O.K. Corral

About FRANK SAMUELS

Frank is a Partner in the Information Transformation practice of Infosys


Limited. He is also a certified Financial Engineer who enjoys financial modeling
and securities pricing.

Frank has had the privilege of three professional careers ranging from structural
engineering to corporate mergers and acquisitions to (over the past 13 years)
strategic management consulting. His primary focus is on helping clients capture
value from complex business transformations.
Frank_Samuels@infosys.com
Frank is an incurable learner and is very passionate about helping others
through volunteer activities. He holds a Bachelors degree in Structural
Engineering, a Masters in Finance, and an MBA from MIT Sloan with a
focus on Financial Engineering.

About INDER DUA

Inder is a Principal in the Communications, Media and Entertainment


practice of Infosys Limited with 11 years experience in consulting,
manufacturing and media & entertainment industries. He specializes in
digital asset management, marketing operations and eFulfillment.

Inder has an international MBA from HEC France and a degree in Process
Control Engineering. He was one of the 3 finalists for a global social venture
business plan competition (for Organic Groundnuts), and he actively supports
causes of eye donation and welfare for handicapped kids in India. He is a
Inder_Dua@infosys.com
strong believer in Karma Yoga and enjoys reading the Bhagwad Gita.

ART & SCIENCE 37


by Prateek Sinha & Sally Stuart

THE HOUSEWIFE *, THE SALES


FORCE & THE COMPANY
A Collision Course in Aisle 9

T
he show Mad Men has richly revived the portrait
of the iconic 50s housewife, who made choices
for her family by reading ads in newspapers
and taking advantage of Wednesdays deals. As we all
know, that consumer is gone. In her place is someone
increasingly technically savvy, connected, perhaps more
frugal, and certainly more pressed for time.

Carrying a mobile device, todays consumer strides


purposefully through supermarket aisles, scanning bar
codes to compare prices in real time, reading food
labels, browsing Coupons.com, and making buying
decisions based on digital ways of looking at the world.
She works in real time, and so must her suppliers. This
consumer requires just-in-time information and prod-
uct availability. She wont accept were getting more of
those next week, or we dont carry that.
*
Apologies to the househusbands; we tried to go with something
gender-neutral, but housespouse didnt really roll off the tongue.

38 ART & SCIENCE


The Housewife, the Sales Force & the Company

Large retailers like Walmart, who deal sheets. He believes his real value is in the
directly with the new consumer, have relationship, and its hard to blame him:
known this for a long time, and have been he has no real line-of-sight from the local
pioneers in just-in-time inventory manage- mom and pop or mega-store in his ter-
ment. Unfortunately, the consumer pack- ritory to his companys P&L. On top of
aged goods (CPG) companies of the world that, he is given competing priorities, so he
are up against an ongoing problem: how to has to use intuition and work-arounds to
manage a large, distributed field sales force decide what needs to be done where, and
against the demands of a big box retailer, a by when.
small mom and pop, and the demands of
the consumer in the aisle. The most progressive consumer products
companies have begun to address this
DIGITAL VALUE CHAIN breakdown with mobile,
This new complex world dictates CPG web-based collaboration tools.
Business Units
the need for a digital value They are finding that, al-
chain a near real-time Account though difficult to imple-
Team
feedback loop that con- ment, web-based col-
nects the consumers laboration among all
wishes with the inventory the many players the
and supply systems of Retail Store
company business unit,
Consumer
the retailer, all the way the brand manager, the
back to the CPG company Sales Force sales force, and the retail
and its business, marketing stores can deliver ben-
and R&D departments. Also Supply Chain efits to the tune of hundreds
somewhere within that loop is the of millions in incremental
sales rep for the CPG company, who has a revenue and margins for all involved.
longstanding personal relation-ship with the
retail store manager. THE CHALLENGE
But theres a reason CPG manufacturers
And this is where the breakdown in the have been slow to embrace technology to
digital value chain nearly always occurs. enable their sales reps. And just as it was
with the rep who wields a spreadsheet
Because the sales rep is out on the floor, to manage inventory, its hard to blame
pushing product, placing displays, handling the CPG companies: they have 100+
in-store signage and overseeing in-store products across 30,000 stores in 100
trade promotions, youd expect theyd have different regions. Add in all the product
access to all sorts of market information. authorization required for warehouse and
Youd also expect that information would be direct-to-store supply chain variations,
digested, analyzed and transmitted back to as well as managing a 1,000+ field sales
corporate, to help drive better decisions. organization, and P&L management by
the business units at headquarters, and you
But this kind of analysis and data transfer can begin to visualize the complexity of a
on an enterprise level requires technology. systemic organizational change.
And most sales reps use spreadsheets and
manual lists to manage promotions, prod- So, yes, these transformations do not hap-
ucts, stores and inventory. pen overnight. But they have to happen.
Even when enterprise tools are provided, No packaged goods company can afford
the sales rep often does his own shadow to have a sales force that is underleveraged
accounting on the more familiar spread- and ineffective.

ART & SCIENCE 39


by Prateek Sinha & Sally Stuart

ing communication gap between the ac-


THE TECHNOLOGY SOLUTION: count team and the sales team, so they can
STEP BY STEP collaborate and discuss execution plans.
To deploy a truly useful collaborative Using this platform, account teams should
platform, companies must get information be able to send activities tailored to each
to flow seamlessly among the retailers sales rep, and direct them to perform the
business teams, the sales reps for the highest ROI activities first, while ensuring
consumer packaged goods company, that the reps are not under or over allocated
the packaged goods companys brand activities for a particular store.
managers, and its business units. There are
a few critical steps that must happen first. The retail execution platform, however, is
only as good as the performance across
THE FIRST STEP: DESIGN IT FROM A the packaged goods company as a whole,
SALES REPS POINT OF VIEW leveraging feed-back from the sales reps to
Any change in a sales persons life will only plan for the next week, and communicating
be adopted if its either his idea, or you the feedback across the sales organization.
make him believe its to his financial benefit. Reporting also enables the CPG company
The introduction of a new gadget might to measure the effectiveness of its reps and
be received with initial enthusiasm, but it identify training or coaching opportunities
could soon give way to my sales are down to improve in-store execution.
because you made me use this
thing... NEXT UP: THE HARDWARE
A big part of the solution design will
The only way to avoid this fate is be arming the sales reps with tablets
LE

to secure buy-in and ownership or smart phones that are easy to use in
SA

for a transformation from the the field and cool to carry.


sales leaders and all-star
sellers. Sales people are notorious late adopters,
and for them to get into a technology, it
Next, you want to think about what the must be mobile, immediately useful, and
sales person needs. When you design the non-threatening to their personal relation-
platform, you want the ability to segment ships. Choose a tablet or mobile device they
stores, align the reps time with the high can learn quickly and will be proud to carry.
investment locations, and prioritize the ac-
tivities a rep does in a store so the highest FINALLY, THE ACTUAL
revenue producers are done first. APPLICATIONS
Quite simply, if the applications are simple
To kick this off, the companys business and easy to use like apps on a smart
units should determine the revenue and phone, rather than ERP systems the reps
margin a particular activity could have are going to be more likely to adopt them.
based on historical and Nielsen data, Also, any software should provide data
allocate how much time each sales rep and feedback to help the sales rep make a
should spend in each store based on their case to a store manager for repositioning
volume, and create custom retail activity a product or putting an item on display.
plans for stores based on the allocated With a few clicks, he should be able to see
time. and show the store manager the result:
This will give you a 50% lift in traffic
Your platform should also bridge the exist- and an incremental $200,000 during the

40 ART & SCIENCE


The Housewife, the Sales Force & the Company

promotion period itself. The software all retail stores drive equal revenue. So sales
should help the sales rep do his job bet- reps have to be given information that will
ter, get higher incentive pay, and empow- encourage them to plan retail execution
er him with mobile insight. more effectively to focus their time on the
stores that generate the most revenue, and
At the same time, the software should to spend time in the stores most effectively.
empower the account team as well,
helping them prepare presentations for While we know that salespeople feel their
various store chains, and helping them personal relationships are always more im-
monitor sales force activity or promo- portant than technology, and often distrust
tions success. software designed by corporate, there
is reason to believe that corporate can get
SUMMARY smarter, and that the current handhelds,
Consumer packaged goods companies can smart phones and tablets are finally getting
increase incremental revenue by becoming so easy to use, even adults can use them.
more effective in planning and executing
retail activities including trade promotions. At the very least, when the salesman collides
Every promotion generates a lift for both with that modern consumer in the aisle, his
the company and the retailer, although not technology should be worthy of hers.

About PRATEEK SINHA

Prateek is a Senior Principal in the Retail, Consumer Goods and Logistics


practice of Infosys Limited.

He has 15 years of CPG, Retail and consulting experience. During this


time, he has launched a coffee brand, managed a beverages business and led
transformations for various global organaizations.

Prateek has an MBA and a Bachelors degree in Computer Science &


Engineering.
Prateek_Sinha@infosys.com

About SALLY STUART

Sally is an Associate in the Retail, Consumer Goods and Logistics practice


of Infosys Limited. She is an expert in Sales Force Automation, Marketing
Resource Management, and Promotion Planning and Optimization.

Sally has a BA in Economics from the College of Arts & Sciences at


Cornell University.

Sara_Stuart@infosys.com

ART & SCIENCE 41


by Sharad Elhence & Saurabh Agrawal

METRICS WHAC-A-MOLE
What Most Companies Get Wrong,
and How to Get Metrics Right

I
f youve been around corporate metrics programs,
youve probably heard the horror stories. The
fast food chain whose employees started making
every chicken sandwich to order because management
began measuring the amount of waste. Sounds good,
but order time and wait time went up exponentially,
and customer satisfaction scores dropped precipitously.
Or the more common: the customer service rep who
dumps callers abruptly after helping them in order to
meet call volume targets.

Its Corporate Whac-a-Mole. Solve one problem, and


another pops up.

And thats the dirty little secret: most metrics programs


have become meaningless exercises in paper shuffling
that either dont deliver the desired results or, even
worse, deliver unintended bad results in another area.

42 ART & SCIENCE


Metrics Whac-a-Mole

Why are metrics so hard to get right? multiple spreadsheets, in a fire-drill of a


Your car has a metric, and it encourages quarterly process with an end result that
exactly the behavior it should. When means nothing to anybody but the CFO.
the gas gauge alerts you that you are
low on fuel, 99% of people (save the Take, for example, the industrial
teenage population) will find the next conglomerate that measured its financial
gas station and refuel. Or, theyll watch success with a complex metric called
this important metric and refuel before See-FROG-See [CFRoGC] Cash
it signals an immediate need. Flow Return on Gross Capital. That
metric, the result of intense efforts to
So what can we learn from the fuel account for risk adjustments and cross-
tank metric? When a metric measures currency aggregations, was impossible for
something simple, does it clearly, and is employees to understand and couldnt guide
very closely tied with a negative outcome, decisions or actions.
it will have a clear effect on behavior.
A corporate metrics program should Better to break these complicated metrics
do the same: alert your down to their component parts the
Solve one
managers to issues, so they exact balance sheet or income
can be fixed before they problem, and another statement line item they
become problems. pops up. correspond to (Revenue,
COGS, SG&A, Working
HOW METRICS GO Capital, Fixed Capital
WRONG Efficiency, or Effective Tax Rate). Then,
There are several reasons metrics programs hunt down the specific processes that drive
dont achieve their desired results, and chief those numbers, and measure these, because
among them is the guy in the mirror. Its they are your value levers.
basic human nature. When managers set
their own departmental metrics, they are likely Making sure everything that is measured
to set the hurdle at a height they links to higher level operational and
know they can clear. Beyond this natural financials metrics owned by the executive
fear of accountability which is not to is the key to having the right information
be underestimated there are several to drive decisions.
supporting reasons metrics often go awry:
theyre too complex, they cant be attributed The best financial metrics accurately
to one group, or they just dont measure the track progress toward specific goals, so
right thing. Lets pick these apart. wise goal-setting is key. Review last years
actual performance, then set goals for
TOO SMART FOR OUR OWN GOOD income, cost of goods, gross margin,
Most metrics are owned by the CFO operating expenses, and net profit.
or the COO, who is setting the agenda Set goals grounded in the reality of past
based on what he or she is rewarded performance, making sure your monthly
on, so the entire company dashboard financial statements are accurately adjusted
becomes financial in nature. Managers for work in process, and summarizing your
will say they measure Return on Invested statements in a
Capital (ROIC) or Net Present Value budget tracking report.
(NPV), but they have no idea how their
day to day activities impact those metrics. THEY JUST DONT MEASURE
ROIC and NPV are ethereal numbers, THE RIGHT THING
culled from complicated calculations and Which brings us to another point.

ART & SCIENCE 43


by Sharad Elhence & Saurabh Agrawal

A lot of companies use metrics to measure a result of periodic overcorrections.


financials. But if your metrics program One month, manufacturing was told
doesnt have operational or business they were being measured on productivity,
process metrics in addition to financial so they expanded batch sizes and
ones, its hard to tell how the business is produced at record levels. Of course that
doing. created a very high level of inventory,
which sales couldnt offload, so they were
Suppose you have a complex operational given short-term incentives to dump
metric, like Customer Satisfaction Index, excesses into the discount channels in
which has multiple embedded nuances order to save working capital from being
like churn or repeat purchases in it. You adversely affected that quarter. They were
must be able to find out what actually in a massive cycle of overcorrection
causes your customers to be satisfied. between sales and manufacturing.
Is it on-time delivery (OTD)? Or is it
delivery against customers How did they resolve the
expectations? The two can problem?
be very different. They agreed that
Manufacturing and
If you tell a customer Sales would jointly
youll be there own an Inventory
between 12 and 4, and metric. Manufacturing
you arrive at 4, that may would still measure
feel like 100% OTD to the productivity and sales
company, but it certainly doesnt would still measure its teams
feel that way to the customer, who performance, but the two would have
blocked off that four-hour slot, and has to collaborate in the Sales & Operations
already tweeted four times how angry she Planning process to get inventory levels
is. From her point of view, she blocked just right.
off 12-4 for your visit; now she has to
stay an extra hour or more while the Like quantum physics, all processes in an
actual repair work is done. enterprise are interconnected, and so are
the metrics. There is no individual metric
OWNERSHIP: THEY CANT BE that can really be controlled by a single
ATTRIBUTED TO ONE GROUP manager. So causal linkages in a metrics
A frequent complaint we hear from hierarchy should be well understood.
managers when it comes to metrics is Otherwise, one individuals actions
that they are so inconsistent: One cycle or operational decisions may have an
inventory is too high, the next cycle we undesirable impact on another area of the
have significant stock-outsI cant drive same process.
processes to an optimal outcome.
HOW TO DO IT RIGHT.
A metric is an absolute measure. But no On the opposing page, we offer a simple
one action in an enterprise is isolated diagram for selecting the right metrics,
from all other actions. A single isolated ensuring ownership, and making sure
metric can lead to some very they encourage the right behaviors.
undesirable outcomes.
THE FRAMEWORK
For example, a recent client was Any measurement strategy must address
witnessing wild swings in inventory as what it is measuring (process inputs and

44 ART & SCIENCE


Metrics Whac-a-Mole

How do we align the metrics hierarchy


with the organizational hierarchy, and
drive the right accountability?

What to Who to
Measure Measure
Process Inputs Process
and Outputs Owners
Align to
Strategy

How to
What data is required Measure What dashboards and
and where should Technology reports do we need? How
it be captured? do we automate delivery?

outputs), who it is measuring (process airline wants to cut costs, so it measures


owners and participants that can impact fuel used, and pilots adjust their behavior
the outcome) and how it is being by flying more slowly and leaving the
measured (through appropriate use of air conditioning off. This drives on-
information and technology). time arrivals down and causes customer
satisfaction scores to plummet. If all the
Today, in many organizations, metrics customers begin flying another airline,
reporting is considered a chore. This lower fuel costs wont matter.
framework recommends automating the
delivery of metrics elevating it to the A better approach is to start with the
status of a critical business capability. key business objectives. Then identify
Using technology to enable stable and the processes that drive those objectives.
reliable data acquisition is the last (but a Youll want to also note the customers
fundamental) piece of the metrics puzzle. of each process, and what their interests
are before you move on to selecting
Ultimately, alignment with strategy metrics. So the airline above would have
implies a strict prioritization measure realized that a metric on fuel usage might
what is important and what directly impact customer experience or on-time
impacts strategic objectives not more, arrivals, and would instead have found
not less. Lets go clockwise around where fuel is wasted, and set a metric
the diagram. around that.

WHAT TO MEASURE Select metrics that measure the behaviors


SELECT THE RIGHT METRICS you want to change or monitor. Always
The biggest mistake companies make is ensure that the trade-offs implicated and
that they start with a metric they want to the associated metrics hierarchy are aligned.
measure rather than a business objective. A key approach to selecting the right
A classic example is the one where an metrics is to ensure that you are measuring

ART & SCIENCE 45


by Sharad Elhence & Saurabh Agrawal

the critical customer requirements/ capabilities of the organization. Metrics


outcomes from the process in question. should change to accommodate your
teams changing focus or your companys
Keep the metrics program simple with shift in strategic priorities.
few metrics to drive focus. A good rule Of course, you dont want wild swings
of thumb is to monitor a minimum of in what you measure, or youll never
three and a maximum of five metrics on have a baseline or something to compare
a dashboard. You could have additional progress against. But you need to make
metrics that are relevant in special cases, sure each metric is not encouraging a
but three to five metrics are adequate similar trade-off in behavior somewhere
to help you track the steady state else.
performance of a process or operation.
In fact, every business has one WHO TO MEASURE
magic metric that holds ENSURE
the key to its performance. OWNERSHIP
It may be sales revenue per Select metrics
transaction, returns, page that align the
views, or percentage of
growth, but chances
are, the CEO organization
and Board with strategic
unconsciously priorities by
know what it is. linking CXO metrics with those of
CXO-1 level, and -1 level metrics with
Select metrics that ultimately measure -2 level, and so on for the rest of the
value to the shareholders and customers. organization. Conversely, think about
How does the metric you own roll up your own performance metrics. If they
through the organization to produce do not directly enable your supervisors
shareholder value, and how can you metrics, then you may not be completely
influence it? Once you understand that aligned with the organization.
relationship, you can drive behavior
correctly. Ensure ownership and accountability
for each metric. If a metric has no clear
Select metrics that not only provide a owner, consider taking it out of the
historical view of performance but also program. Why measure something if no
include leading indicators. A historical one is responsible for changing it?
view and context of the metric is critical
to understanding what the metric is HOW TO MEASURE
telling us, and therefore what action to PROVIDE VISIBILITY
take. Intuitively, you would know that Dont try to measure anything for which
holding too much inventory is bad. But you dont have accurate and timely data
a historical view would allow a team to available. If you cannot support a metrics
determine how much is too much, and program with the right technology, it will
whether the inventory level is in fact eventually fail. So start by measuring what
rising with time. you can, and evolve from there.

Be open to evolving and refining the Once you begin assigning metrics to
metrics from one period to the next individuals or departments, make sure the
in line with changing priorities and metric owners have continuous visibility

46 ART & SCIENCE


Metrics Whac-a-Mole

to data so they can adjust levers and To make a metrics program successful, it
behaviors to drive performance. Having must avoid the common pitfalls and: a)
a scorecard of performance as a visible measure the right performance given the
reminder of pending action is a significant company strategy, b) allow for the right
motivator. Visible success is an even ownership, and c) be systematic
stronger motivator. Once an individual, and consistent.
team or the whole organization can visibly
see improvement in metrics towards theSo while metrics are absolutely critical,
desired target, they will be motivated to
relying solely on them to understand
sustain the momentum. whats happening in a business is a sure-
fire path to failure. A little qualitative
CONCLUSION analysis and anecdotes can be quite
Be careful what you measure, because telling and should complement any
you may get more of it than you want. metrics program. Most importantly,
While this is an often quoted clich, get engaged; youll see if a process is
it is true without exception. achieving the desired outcome, and if
not, why.

About SHARAD ELHENCE

Sharad Elhence is a Partner in the Strategy practice of Infosys


Limited and works with F500 clients in the Manufacturing,
Retail, and Distribution industries. He specializes in addressing the strategy,
process, and technology issues that might be impeding business performance. He
is also the global leader for Infosys Value Realization MethodTM.

Over the last 23 years, Sharad has served many clients. He got his start at
American Airlines, was trained in consulting at McKinsey, and then worked
for supply chain software company i2 Technologies. He holds a Bachelors degree
Sharad_Elhence@infosys.com
in Mechanical Engineering from the Indian Institute of Technology in Delhi, a
Masters in Industrial Engineering from SUNY Buffalo, and an MBA from Wharton.

About SAURABH AGRAWAL

Saurabh is a Senior Principal in the Strategy practice of Infosys Limited.


His career has spanned 5 different countries, and included stints in sales,
product operations and consulting. At Infosys, Saurabh has developed deep
expertise in Supply Chain and Infosys Value Realization MethodTM. He is
one of the co-inventors of the Value Diagram.

Saurabh has an MBA and a degree in Mechanical Engineering.

Saurabh_Agrawal06@infosys.com

ART & SCIENCE 47


by Akash Bhatia

SOCIAL BUSINESS
The Rise of Unstructured Data

F
rank Eliason, a lone customer service manager
for Comcast, was sitting in his living room fielding
customer service calls on his headset, when he
saw an article about a new status messaging service. He
thought it might be another way to reach the customers
who called him daily with service problems.
So Frank logged into the service, registered under the
handle @comcastcares, and began to make history.

Frank turned Comcasts image around almost overnight


by monitoring Twitter behind the handle @comcast-
cares, and responding to complaints on a timely, person-
al basis. Although it was labor intensive for Frank, Twitter
users were vocal about his quick response to
their issues, and they sang the praises of Comcast.

48 ART & SCIENCE


Social Business

But even more than being a new vehicle From the structured data, we can learn
to reach and serve customers, Twitter data that 2010 Model X is a car model,
taught Comcast what kinds of problems Navigation System is a component, and
its customers were having, so it could defective is a condition: we can define
tweak its products and eliminate the prob- the relationships between those three
lems. It also made Frank into something fields so we know that the navigation
of a social media star. system in a particular 2010 Model X is
defective.
Frank was a pioneer in a new form of
business social business wherein cus- UNSTRUCTURED DATA IS
tomers expect to talk to brands, and expect DIFFERENT
to be answered, often in near-real time. He Unstructured data, on the other hand, is not
got information about Comcast customers stored in a relational database, or at least
that was not available before social media. not one in which the data model is relevant
to the meaning of the data. For example,
Now imagine if you could get that kind of someone posts to an automotive forum on
insight into your prospects, your custom- the internet:
ers, your competitors, your products and
what customers like and dislike about your The GPS in my 2010 Model X is constantly
product without all that People today are getting me lost!
manual monitoring. People leaving a vast digital It stops receiving any signal for
today are leaving a vast minutes at a time, and when it
data trail on social media
digital data trail on social finally decides to tell me where I
media sites, in customer sites, in customer call am, half the time its wrong. Of
call center issues logs, and center issues logs, or in course it worked perfectly when I
in emails. was at the dealer for my last oil
phone calls, but most
change. How do I demonstrate
But most companies dont companies dont tap this the problem for them
know how to tap this data unstructured data and so that they can fix it?
and use it to improve their use it to drive business
business. The same basic informa-
insights.
tion is contained in this
Although its impossible to paragraph, but the database
know for sure, some estimates say 80-85 that stores the text cannot tell us so. This
percent of the data handled by modern database is organized around different
businesses is unstructured data. Even as pieces of text, dates, times and the users
the volume of structured data explodes, who post to the forum.
unstructured data grows even more quickly
because of the shift to social business. Examples of unstructured data also in-
Customers never talked back to the brand clude e-mails and notes from call centers.
before. Now they can, and they do.
UNSTRUCTURED DATA
WHAT IS STRUCTURED DATA? HAS CROSS-FUNCTIONAL
The structure in structured data comes BUSINESS VALUE
from an abstract model that is created to The best way to get a good view of your
describe the data. The model gives names business is to look at a mixture of unstruc-
to each field in a database and defines the tured and structured data. Lets return to the
relationships between the fields. Take, for example of the defective GPS to demon-
example, an automobile manufacturer. strate how both kinds of data are important.

ART & SCIENCE 49


by Akash Bhatia

Assuming that the defect is present across maker get compensation from third-party
multiple vehicles, the automaker will find suppliers.
out eventually, from service center records And for public relations reasons, its in the
(structured data), that there is a flaw in companys interest to contact a customer
the component. It will then launch an who is having service problems and cor-
investigation into the root cause, craft an rect the problem at a higher level.
appropriate, cost-effective process for
handling the defective part, and then com- HOW DOES THIS WORK?
municate and train its service centers on No company wants to pay an employee to
this process. sit and search automotive forums all day,
counting potential issues and taking notes.
The sooner this process can be developed, So IT managers need a system that moni-
the lower the overall cost of the defect will tors not only the structured records from
be to the automaker. Hence the earliest its service centers, but unstructured data
warning benefits the automaker the most from online forums, twitter streams, blogs
especially if this warning comes before and other types of digital social media.
customers even start showing up to have the
defect repaired (unstructured data). Luckily, search and indexing technology
to monitor publicly-available unstructured
For certain vehicle components, it may be data is abundant. So is business intelli-
more cost-effective to simply replace a de- gence (BI) technology that enables manag-
fective component than try to diagnose the ers and statisticians to define and create
problem and fix it. Hence, the service center the reports and predictions relevant to
records (structured data) may contain very their business.
little data about the symptoms of breakages,
while the online forum postings (unstruc- The third technological pillar of an
tured data) may contain a lot of detail and unstructured data mining system is text
this information would be necessary to mining the use of computer processing
determine the root cause of the problem. to understand patterns and trends in text.
It uses techniques such as natural language
Knowing the root cause can help ensure processing to help understand syntax &
that future components do not carry the context, sentiment scoring to discern posi-
same defect, and perhaps help the auto- tive and negative attitudes, and intelligent

SQUEEZING INSIGHTS FROM DATA


Internal Sources
Unstructured Data

Email

Call Center Transcripts

Forums, Blogs

Dashboard
External Sources & Alerts
Social Networks
Forums, Blogs

Videos

Text Mining &


Human Analysis

Internal Sources Reports


CRM
Structured Data

Point of Sale

Service Tickets

External Sources
Industry Research Data

Financial Market Data


Automatic Feeds to
Other Systems

50 ART & SCIENCE


Social Business

data joining to incorporate key elements CALL, CHAT AND EMAIL


from structured data. TRANSCRIPTS FROM CUSTOMER
Text mining technologies have developed SUPPORT OPERATIONS
at a rapid pace in the past decade and Most companies accept phone calls and
have become relatively sophisticated, but emails from customers, and more and more
there is still no out-of-the-box text are able to interact via chat. The records of
mining solution that plugs into existing these interactions typically have only basic
BI systems. Thats because every busi- structure perhaps a high-level classifica-
ness has unique discovery needs after tion, plus date and time, with the most
all, every business is concerned with its important information residing in a blob of
own products, its own unique network of transcript text.
competitors, and its own industry. And
every business has its own Analysis of customer support
internal unstructured transcripts can not only help
data sources to consider. companies understand the
details of issues that their
Thus, insights are customers face, but can
squeezed out (see fig- help them standardize and
ure, facing page) by analyz- streamline their customer
ing multiple sources of support processes. For ex-
data using a mixture of ample, an online retailer might
clever software and hu- mine transcripts to identify the
man assistance. This last phrases used by the best
part is important; most companies simply customer support agents at resolving returns
rely on software alone. The right solution calls, and add these phrases to the standard
is a mixture of human intelligence and ef- scripts to replicate success.
fort along with soft-ware. Art and science,
if you will. SOCIAL MEDIA ACTIVITY
Defined simply, social media is anything
WHAT KINDS OF DATA CAN thats being said about a company outside
WE DO THIS WITH? the control of the marketing department.
Thankfully, text mining can be applied The most prominent venues include Face-
to any available data source, provided book, Twitter, forums, blogs and media
it is made of or can be translated into sharing sites such as Flickr and YouTube.
text. Companies can now understand Consumers are creating an explosion of
the contents of e-mails, call center notes, data there, and smart companies have
RSS feeds, user groups, Facebook prod- active Social Media Listening teams or tech-
uct pages, twitter feeds, chats, SMS texts, nologies to tap into this data stream
reports, letters, presentations, word pro- and act on it.
cessing documents, surveys, white papers,
marketing material, web pages or audio SOCIAL CRM DATA
recordings. Many companies, especially those with
intensive sales, service or support processes,
Techniques have even been developed for are launching social networks and forums
analyzing the content of still and mov- on their own digital properties. These
ing images, although the latter is still in its forums help company personnel structure
infancy. their interactions with customers, enable
re-use of content, and bring down costs
So where do you start? by enabling customers to actually support

ART & SCIENCE 51


by Akash Bhatia

Look for the following attributes when looking


for the viability of unstructured data.
Clarity of Keywords Ability to associate comments with leads
With what level of confidence can we identify Can we create new leads or attribute comments
the relevant keywords? to existing lead records?

Ability to attribute demographics Ability to respond


Can we attribute the voices to relevant Are we able to craft and deliver a relevant
market segments? response to the customer?

each other. Most companies start out on the rise. Marketing can test reactions to
with comprehensive human monitoring various price increases. Product develop-
of their forums, but as the activity levels ment can learn which features customers
grow, this often becomes too labor-inten- are responding most to.
sive to scale.
SERVICE PROVIDERS
While social CRM platforms typically With this much opportunity, there should
include some data structure, such as dis- be a clear market leader in unstructured
cussion categories and contributor ratings, data analysis. Instead we have a host of
mining the meat of the discussions competing tools & vendors, making the
can be rewarding. For example, a semi- tool / services selection difficult.
conductor manufacturer might choose to
monitor its engineer forums for mention In general, the tools / services fall into
of competitor products. This could help three main buckets Business Intelligence,
it learn about features that its customers Online Analytics and Predictive Analytics.
are interested in that the company doesnt The BI market is well established and domi-
currently offer, or even about customer nated by Oracle, IBM and SAP. The online
accounts that might be in danger of being analytics space has been attracting the most
lost to competition. attention (especially social media), but the
rate of innovation in this area is slowing.
And dont just give the unstructured data The area that usually comes last to mind for
assignment to marketing and IT. Although most companies is predictive analytics, yet
most of the attention is typically focused the most rapid innovation is occurring in
on marketing in getting better infor- this space.
mation about potential customers, or
customer service there are many other Unfortunately, there is no ERP
scenarios where insights can be shared for analytics.
across other business units to reduce costs
or provide better service. GAME PLAN FOR SUCCESS
Thus, although the opportunity for making
For example, insights from customer sup- use of unstructured data may be clear,
port can be used to drive product lifecycle; there are a few challenges in making this all
or research from competitive intelligence work together. We recommend a struc-
can drive R&D investment. HR can learn tured game plan focused on business value.
what recruits and prospective employees
say about the company in social media, First, companies must try to articulate the
and it can learn why employee turnover is business value that unstructured data would

52 ART & SCIENCE


Social Business

add; most attempts at a justification will be companies suffer from a fragmentation of


illustrative and not grounded in facts, so ownership of data - i.e., there is no Infor-
beware the tyranny of numbers here. mation Czar with the authority or man-
Second, companies should hone in on date to tap data from multiple business or
the functional domains to be covered and functional units. You may need to assign
define the business scenarios that would someone with cross-functional reporting
be impacted by such analytics. It is in this relationships to own unstructured data for
phase after the business scenarios have the entire company, or at least groups of
been articulated that we recommend the related functional areas
choice of technology vendors. The market (e.g. Sales and Marketing or Customer
for service providers and vendors is con- Support and Product Management).
fusing. Most of the investment dollars in
this area usually go to the safe areas (BI) Companies most likely to succeed in this
or to the areas that have the most hype new age of social business will use
(Social Media analytics). Dont be like ev- analytics to drive competitive differentia-
eryone else; look at some of the emerging tion and tune up HR, marketing, sales and
opportunities as a way to differentiate your support. Theyll start small, figure out
data-mining program. where the business value really is, and make
analyzing unstructured data someones full
To make this all work, companies need to time responsibility.
consider an organizational angle, too. Most

About AKASH BHATIA

Akash is a Senior Principal in the Manufacturing practice


of Infosys Limited.

He is an expert in digital operations and IT strategy, and has helped several global
organization on digital business strategies, process improvement, and implementation
management.

Prior to Infosys, Akash was an early employee of a software startup (since acquired
by IBM), where as a product manager, consultant and general man Friday he
Akash_Bhatia@infosys.com helped define, market and sell portal dashboard solutions. He has graduate degrees
in Physics and Computer Science.

Q&A
Q What is your fundamental rule of Q Forecast the biggest trend of the
consulting? next five years.
Simplify the complicated. Consumerization of IT or Enterprisation
of consumer IT. Fancy ways of saying
Q What would you never be caught I like the way Facebook, iPad, iPhone,
without? Twitter and Skype work for my life, and
My pants, at least in a business setting, I would like the same at work. Please.
and a sense of humor.

ART & SCIENCE 53


by Pete Maloof & Brandon Bichler

WHY PROJECTS FAIL


Improve Your Odds of Success

S
omewhere in a boardroom right now, a $50
million business transformation project
is getting the green light. For the next
several years, it will consume massive amounts of
the companys resources, and generate reams of
requirements documentation and process flows.

And in the end, the project will fail.

54 ART & SCIENCE


Why Projects Fail

This shouldnt be news to anyone. requirements, design, build, test, and


The facts have been known for years. deploy is thoroughly ingrained in the
culture of most organizations, and its
followed by rote. Companies continue to
The Standish Groups CHAOS Report
do the same thing, each time expecting
S UC
CE different results.
S
SU
C
S

16%

CE
WHY PROJECTS FAIL:

SS
32%

44%
THREE KEY MISTAKES
53%
31% But it doesnt have to be this way.
24%
There are three major mistakes
companies make in their transformation
1994 2008 projects that, if avoided, would improve
their odds for success:
SUCCESS CHALLENGED IMP
IM
IMPAIRED
PAIRED

In 1994, 84% of all major projects were either 1. They fail to recognize the importance
challenged or cancelled. Fourteen years later, of the set direction phase;
68% of projects still meet that same grim fate.

2. They believe software alone can fix


An ongoing study by the Standish their process problem; and
Group has shown that only a third of
major business transformation initiatives 3. They neglect to conduct pilots of
achieve success on time, on budget, the solution at points where failure is
and with the features and functions relatively benign and cheaper to fix.
expected. Only 33 percent! A quarter of
them are complete failures, and the rest Lets look at each of these problems in turn.
land somewhere in the middle: coming in
late, running way over budget and, most MISTAKE #1
often, delivering disappointing results. UNDERESTIMATING THE SET
DIRECTION PHASE
And yet, like gamblers at a Vegas craps
table, executives continue to roll the dice, Theres a familiar pattern to the way
hoping to beat the odds and come up projects are born. The CEO issues a broad
with lucky number 7. Why do they do declaration to Wall Street and to the firm
it? Maybe they feel that this time will be We will grow to $15 billion by 2015!
different. Or perhaps theyre counting on Suddenly the funding spigot is wide open
the possibility that theyll be long gone and everyone scrambles to lap up their
by the time the accountability chickens share, dusting off pet projects from their
come home to roost. long-dormant wish lists.

Or maybe theyve come to accept the The VP of Sales bends the CEOs ear,
fact that this is the way it is long- claiming the sales force has been hobbled
term projects rarely produce the results for years by bad software. Its time to rip
expected. And this fact is so widely it out and replace it with something that
accepted, the actual consequences for works! Make it so, the CEO orders,
failure are minimal. sending the IT people into a frenzy,
evaluating software, getting a systems
In the end, its very likely that they integrator on board and working feverishly
simply dont know a better way. The to get the project going before the funding
typical process cycle analyze, gather is turned off.

ART & SCIENCE 55


by Pete Maloof & Brandon Bichler

This is the kind of situation that leads What happened?


to bad decisions and failed transformation
projects. The pipeline has been closed for so Among other problems, these companies were
long that once it opens, theres tremendous in such a hurry to minimize their investment
pressure to start delivering value right and move past the Set Direction phase that
away. The meter is running and the Set they neglected to set a clear direction.
Direction phase is viewed as pure expense
as opposed to subsequent phases, where The Set Direction phase should continue
the assets created are tangible and can be until three tasks are completed:
capitalized.
First, come to a clear understanding of
As a result, people are looking to cut corners what will drive value for customers. This
and shave costs. And not enough time involves a detailed analysis and drill-down:
is spent making sure everyone shares the
same vision of success. The CEOs definition What markets are we in?
of success may differ from a directors,
for instance. And those definitions arent Who are our customers in each
particularly solid or well thought-out in the business unit?
first place.
How can they be segmented?
Its not enough to look at the business
case to determine what the end solution What will it take to win that customer in
will look like. You really need to ask the each segment? What will success
question in terms of how this will affect look like?
customers internal and external and how
those customer benefits will be Second, develop a clear understanding of
captured. what
will drive value for the company:
The problem was first
illustrated in a seminal How will we grow
study a few years ago by an revenue? By broadening
influential market analyst firm. our customer base or
Executives were surveyed about their increasing revenue from each
priorities and concerns at both the outset customer?
and completion of a major transformation
project. If we want new customers, who are they?

During the Set Direction phase, budgets If we plan to grow organically, how are
and schedules were their top priorities, we going to do that? Is it a matter of
and delivering measurable business benefits pricing? Cost optimization?
ranked in the middle of the
pack of concerns. And unless youre running a
philanthropic organization, value for the
But once the project was concluded, the customer should translate into value for
concerns flip-flopped: a majority of the company.
executives complained that the program
did not meet quantifiable business objectives, while Third, figure out what capabilities
budgets and schedules landed near the are required to create customer and company
bottom of their concerns. value.

56 ART & SCIENCE


Why Projects Fail

Here you have to conduct an end-to-end with todays special on a silver platter,
process continuum analysis, to show the initial cost may be the least of the
what the desired customer experience will companys concerns. But once program
look like across the enterprise. Include sponsors commit to a system, they begin
all stakeholders from sales to order to understand its true costs. They try
management to fulfillment to installation to minimize the rest of the program by
to customer service. taking short cuts software gets randomly
customized, test cycles are reduced, any
Too often companies waste endless effort at change management is skipped.
amounts of time gathering requirements And they discover too late that software
when they should be defining alone cannot fix process problems.
capabilities. Requirements-gathering
relies too much on anecdote Sheila in Without a clear process for handling
Accounts Receivable wants a specific prioritization and weighing such issues
feature that will make her job easier. as customization versus standardization,
Never mind that it costs $125,000 and chaos reigns. Personality and subjectivity
has no quantifiable benefit. rule the day, and people overrun the
process.
Instead, they should ensure capabilities
are driven by features that customers When looking for where to start or what
actually value. Armed with that to improve, trust your customers, not
knowledge, companies can set a direction just the loudest guy in the room. Getting
that truly addresses customer needs. back to our VP of Sales (and hes just
todays example it could just as easily be
Take the time to answer these three marketing, manufacturing or anyone else),
questions upfront, and the overall odds he might grab the CEO and complain,
of success will go up dramatically, while Were spending too much time keying
total investment over the long term stuff into our CRM tool. I dont want to
should decrease. key anything in. So to make his rainmaker
happy, the CEO sends down an order:
MISTAKE #2 Were going to stop keying stuff in.
BELIEVING SOFTWARE ALONE
CAN SOLVE A PROCESS Now the order management and
PROBLEM fulfillment people who rely on that data
Software vendors can be aggressive in dont have the information necessary
selling the sizzle of their software, and to do their job, and they get the order
executives tend to eat it up like a big wrong. So when the order shows up in
T-bone steak. New York instead of Omaha, the sales
guy is now resolving customer support
And its no wonder. Theyre hungry! And issues instead of focusing on his next
overwhelmed, with data, processes, internal sale. All because one influential person
resource performance problems. Between ended up setting the priorities for
web interaction, call center reports, emails, transformation.
service calls, chat forums, and social media
sites, communication is all-encompassing The voice of the customer adds a powerful
and never-ending. Companies struggle to element of objectivity to the internal
get a handle on it all and properly interact debate. Too often, political considerations
with the customer. and whoever pounds the table the hardest
wins the day. Rather than appointing a
So when a software vendor shows up person to make decisions, its better to

ART & SCIENCE 57


by Pete Maloof & Brandon Bichler

establish a decision-making process founded How do we fulfill orders?


in customer value.
How do we contact customers?
MISTAKE #3
NEGLECTING TO PILOT WHEN How do we provide customer service?
FAILURE IS CHEAP
The third major mistake in transformation And it plays all of that back in front of
projects is a failure to discover critical stakeholders and executives.
problems early on in the process when theyre
easier and cheaper to fix. The conference room pilot is neither
clean nor quiet nor perfectly scripted.
The Deployment Phase, when youre 18 Its interactive and messy. Its not a time for
months into the project and about to roll out executives to sit back and watch. Its a time
the solution to three countries, is a bad time for them to get up on their feet and poke
to realize the design decision you made in the holes in the solution. Its not intended to
beginning was the wrong one. If youre going be a bullet-proof representation of the
to fail, you want to fail early. To be solution; its a way for participants to
identify gaps and inconsistencies.
One technique that many companies have
found valuable is a conference room pilot, The conference room pilot provides an
which is a safe environment where they early opportunity to view the business from
actually invite failure. The conference end-to-end. It tests assumptions and forces
pilot brings all the stakeholders from all the stakeholders to agree on and validate
technology, business and operations the solution direction. By the end, youve
together in one room, to experience how established clarity around where youre
a future process would work. headed before youve made the serious
investments in getting there.
Its like kabuki theater for IT geeks. Its a way
of portraying solutions in as much detail as Its a major commitment of resources, but it
possible, through pictures, slides and demos. sure beats failing on a big stage, publicly and
It brings the process changes and customer in front of your customers.
experience to life in a rich way that could
never be achieved with hundreds of pages of CONCLUSION
requirements on paper. When it comes to taking risks, most
executives have a split personality. On one
The conference room pilot breaks down the hand, they fearlessly roll the dice on big
process in a clear way and asks questions transformation projects, ignoring the well-
like: documented evidence that the odds for
success are against them. On the other hand,
What customer are we trying to win? they tend to fear failure when they should
embrace it the most at the early stages
What does the business transaction look when the costs are minimal.
like?
That, along with setting the right direction
How do we market to them? from the start and replacing anecdotes and
subjectivity with an objective process, can go
How do we sell? a long way toward improving your odds for
success.
How do we capture orders?

58 ART & SCIENCE


Why Projects Fail

About PETER MALOOF

Peter Maloof (an ex-Infoscion) was a Senior Principal in the Process


Transformation practice of Infosys Limited. With over 19 years of consulting
and industry experience, he has been both a consultant and a client. Peter
started his career in political consulting, which, he often states, is just
marketing for a one day sale.

A seasoned leader and Six Sigma certified Black Belt, Peter has led
Customer Operations transformations for various clients. He has also received
the top business consultant in the world award from his son, Aidan.
Peter Maloof

About BRANDON BICHLER

Brandon Bichler is a Partner in the Process Transformation practice of Infosys


Limited.

Brandon has been delivering large-scale, IT-enabled business transformation


programs across Europe, Asia and North America for the past 15 years.
He joined Infosys from Tyco Electronics Power Systems, where he led several
business transformation initiatives as head of European Supply Chain
Operations. Brandon began his career in Price Waterhouses management
consulting practice.
Brandon_Bichler@infosys.com

Brandon holds a degree in German and Political Science from the University of Texas at Austin. His
band Sub Ether Radio has an album (Fuchsias Jewel) available on iTunes.

ART & SCIENCE 59


Leonardo da Vinci, master of art & science