For IT to Drive Business Growth, Get to Know Your End Customers

In the past decade, technology has moved from being a back office cost center to a competitive differentiator, providing those of us in positions of IT leadership the opportunity (and responsibility) to help attract new customers and grow our companies.

Technology leaders have to take charge and combine their knowledge of the business, products and services, and technology to discover and capture the value of these opportunities.

An organization I once worked for had two divisions. Most customers actually bought services from both divisions. Internally, however we were treating these customers as two different entities. In other words, we were forcing customers to deal with the complexity of our own organization so we could avoid solving the problem ourselves.

We launched an IT-driven project to move to a single invoice per customer, which was a fairly large endeavor that involved aligning customer data, shared discounting and 360 degree customer insights.

In the end, we made our customers lives easier and reduced our costs as an added benefit. Feedback from both our sales department and our customers revealed that we were the only provider in this market offering both services. I really knew we’d improved our competitive positioning when I heard a sales rep describe how a customer had chosen us over our chief competitor because we were easier to do business with. 

How to Discover Value Creation Ideas in Your Company

The way to begin finding the sort of opportunities that will create value using technology at your firm is spending time in the field, with customers and sales reps.

When you learn how customers use your services, what their frustrations are, and what friction is created by using your products, you will have a good idea about where potential value can be created. Sales teams are a great source of ideas too, because they deal with your customers and hear their frustrations every single day.

For example, ten years ago, I worked for a medical diagnostics provider. Since this was a new industry for me at the time, one of my early priorities was to visit customers to learn the industry and how our customers used our services.

I saw customers using a medical record system to order a blood test. Then, they would fill out a paper form by hand - with much of the same information they had just entered into the system. The paper form would accompany the blood samples to the lab. But they still weren't done. As a next step, they were required to record the order for the blood test over again - with the same information - in a separate system for patient billing. If they forgot that third step, our customers lost money, because they were still paying us for the blood test.

We built a system integrating the medical record system with our ordering through APIs, which automatically placed the charge in our customers’ system when they ordered bloodwork. This made sure our customers could not forget to charge their clients.

In other words, we made life easier for our customers, and they rewarded us with incremental business over our competitors. 

Get Your Whole Team Involved

To truly have the technology operation become a driver of value, you cannot be the sole leader responsible for making everything happen. You have to get more people in your organization to be customer-focused.

Here are some recommended steps for developing a customer-focused IT team:

1. Lead by example and spend time with customers and in the field. Take team members with you to meet your customer at what is the optimum time for them. (For example, a busy emergency room at midnight, if that is your market).
   
   
2. In your all-hands and management team meetings, start discussing initiatives which drive your firm’s competitive advantage and revenue growth.
   
   
3. Invite business leaders to present their division’s products and customer value to the IT staff. This is also great for business-IT alignment.
   
   
4. Reward new ideas and initiatives which directly improve your firm’s value. This can either be monetary (criteria in performance reviews) or in visibility (awards, recognition). 

Digital Transformation Means Value Creation

Technology is a key component of of digital transformation, but not the primary driver. It’s all about how we can create new and greater value for our customers, and then capture part of the value created for our companies.

If your firm’s technology organization fully understands the end customer value proposition, you will be in the position to develop new ways to deliver value to them. This can be done by making it easier for your customers to do business with you as described above, or by creating a brand new revenue stream.

For example, GE sells wind turbines, which used to be the key revenue stream for their division. Lately, GE built out their analytics practice to provide insights to customers on how they can improve the output of their wind turbines through predictive maintenance, or use GE's data to determine the ideal placement of turbines in relation to one another to optimize turbine field performance. This has grown into a brand new revenue stream for GE.

A Win-Win Proposition

Once you really get into your products and services, and spend time in the field, your role as the senior technology leader becomes much more fun, and brings fresh energy to your team. Understanding your customers moves you and your technology organization from a cost center to the front office. It also allows you to create a more exciting workplace, which helps you with recruiting and retaining top talent. Rising IT leaders are looking for opportunities to have impact in the industry or community, not just have a job with benefits and a paycheck.