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Technology: The Fall Guy

Posted by vsehgal Apr 21, 2011

Most IT projects that do not enable business capabilities mandated by the business strategies will fail. The blame, however, is usually attributed to the technology, which is simply an enabler and not the driver! If this reflects your company, there is reason for introspection and review of the process leading to capital IT investments.

Though information technology is the underpinning of modern economy and invariably the single biggest enabler for day-to-day operations of any business, its role is not necessarily well understood. When capital investments in creating business capabilities fail to produce desired results, technology is often the fall guy, the chosen scapegoat. Even though it is almost always the inability of the underlying business capability to produce any competitive advantage that is the problem. After all, information technology is simply an enabler, a tool, a means to the end, but not the end in itself.


strategy+business magazine focuses on this point in one of their recent articles on business intelligence.  The authors, Jamie Campbell, Kenny Kurtzman, and Adam Michaels quote Gartner: “through 2012, 35 percent of the top 5,000 global companies will regularly fail to make insightful decisions because they lack the right information, processes, and tools.” They further argue that, “the reason that most companies aren’t getting the most out of their business intelligence has nothing to do with the software itself” and that, “very few companies have the discipline to focus their operations in every business unit and product line on the things they do best. Those that do are the companies that identify their strongest internal capabilities; set thoughtful, strategic goals for them; and then constantly — almost obsessively — measure their performance against those goals”. The authors further claim that, “The key to designing a successful business intelligence strategy is metrics. They should be closely aligned with a company’s strategy and essential capabilities.”

What the articles says about business intelligence is actually true in the larger context of business capabilities as well – almost all capital IT projects that fail do so not because of technology but in spite of it. While some are simply ill-conceived, most of the projects fail to produce results (1) when they are not aligned with the larger business strategy, (2) they do not fill-in specific capability gaps, and (3) they are not based on a good (near-complete) understanding of the capability gaps mandated by the business strategy but missing in its operations.

This alignment of the business strategy to the functional capabilities and the underlying technology requires diligence and focused effort, it remains the holy grail for achieving the promised ROI for most IT projects. This is the focus of my second book on supply chain strategy.

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© Vivek Sehgal, 2011, All Rights Reserved.

Want to know more about supply chain processes and supply chain strategy? Check out my books on Supply Chain Management at Amazon .

Originally posted by Vivek Sehgal at

Measuring customer satisfaction has been a core strategy for retailers trying to improve it and they do it in all possible ways. Most depend on asking consumers questions about their latest interaction with the retailer and how well it went.


Temkin Ratings now brings us a new term: Consumer Experience, more accurately reflecting what the retailers have been trying to measure. Temkin defines consumer experience along the three dimensions of functional, accessible, and emotional parts of the interaction. 

  • Functional Component: Thinking of your most recent interactions with each of these companies, to what degree were you able to accomplish what you wanted to do?
  • Accessible Component: Thinking of your most recent interactions with each of these companies, how easy was it to interact with the company?
  • Emotional Component: Thinking of your most recent interactions with each of these companies, how did you feel about those interactions?

Temkin’s survey consisted of 6,000 consumers covering 143 companies from 12 industries. The winner: Amazon, a company that really does not interact with consumers in the traditional sense of it. Retailers did the best with all the major wholesale clubs, Costco, Sam’s Club and BJ’s in the top 10. Other highlights:

  • Retailers did the best followed by Hotels though the Retailers beat the Hotels by a wide margin (average score of 74% for Retailers to 66% for Hotels).
  • Health plans and TV service providers brought up  the rear as these industries scored an average of 50%.
  • Insurance Firms and Airlines made up the middle with average scores of high 59 and 60%. Banks did marginally better at 61%.
  • The lowest score among all? Emotional experience component at 37% for the famed “TV Service Providers” – Comcast customer would agree!

You can access the complete Temkin ratings here. Temkin concludes by saying that, “Companies can improve isolated customer interactions, but they can’t gain competitive advantage until customer experience is embedded in their operating fabric.” I agree – any company trying to systemically create a competitive advantage through a functional capability needs to explicitly design and build that capability: as Temkin puts it, to “embed it in their operating fabric”. Only a well-designed and deployed capability can become pervasive enough to become part of everyday “business as usual” and provide a systemic advantage.

But does having the best supply chain affect the the consumer experience? I cross-checked Temkin’s list with AMR’s Top 25 Retail Supply Chains.  At first glance, the evidence is mixed: Only four of the Temkin's top 15 retailers also appear in AMR list as supply chain leaders, these being Amazon, Wal-Mart, CVS, and Walgreens. On the other hand, only the first component of Temkin ratings is directly impacted by supply chain capabilities of a retailer – ensuring that the merchandise that the consumer wanted is actually available when they want it. In this context, given that supply chain capabilities affect only a third of the criteria for consumer experience ratings, having 4 retailers out of 15 in both the lists is not a bad correlation. 

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© Vivek Sehgal, 2011, All Rights Reserved.

Want to know more about supply chain processes? How they work and what they afford? Check out my books on Supply Chain Management at Amazon .

Originally posted by Vivek Sehgal at

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