Despite the industry or organization, we live in the world where customer has the bargaining power more than ever before. This has led companies into desperate seek of ways to beat their competitors; some by innovating new products or service, which unfortunately is quite short-sighted, while the other companies focus on finding long-term success factors by researching the ultimate needs and desires of the customer and using those findings to transform them into more customer-centric organization.

According to Gartner, customer-centricity is to understand and meet the expectations of the customer. Forbes recommends having deep discussion with key stakeholders in order to provide services with extra twist of special, tailor-made experience inside it. Harvard Business Review brings the last twist into the concept of how to build customer-centric organization; the company culture has to be aligned with the customer needs. Seems quite easy to do but is it?

Start by Identifying the Barriers for Customer-centric Way of Working

My thesis focused on developing a new, customer-centric service model as the main business problem identified in the beginning was that company has over 40 different ways of working which comes from the number of employees of the company. You can only imagine the huge waste of resources, time and money but in addition, customers were not satisfied at all to the service. The on-going discussion around customer-centricity did not give me any practical advice on how to approach the issue in the case company. Thus, my investigation went deeper, and I ended up finding the framework of Jay Galbraith, the star model, which is used to design dynamic and customer-centric organization, step by step in a structured way.

Validated Framework Keeps Your Work on Track – So Do The Customers!

Star model framework can be used in many ways. In my thesis, it was used to analyse the current state of the service which brought out the weaknesses and strengths of the current service model. The framework has five dimensions which are in relation to each other, some more tightly than others. The strategy at the top is the key and pointing the direction and challenging you to think have you included your customer in it and how have you actually done it.

Next dimension will verify the previous as the structure should be aligned according to your company’s customer-centric strategy. If all good so far, you can move on to next dimension, which is information and decision processes and flow referring how seamlessly and effectively information moves inside and outside of the company. After that you stop in the fourth dimension which is rewards. Rewarding people according their behaviour and results against customer-centric strategy is highly important and has to be considered carefully when building the model. The final dimension, people, is focused on creating right kind of culture and resource pool through right kind of recruitments, which refers to know-how and mindset of employees.

Application of this model revealed that case company hadn’t really ever made any real or compelling service promise to customers on which they could commit themselves to and the same applied to the employees. As the research also revealed service delivery related issues which needed to be solved, it became clear what needed to be done. As an outcome of the thesis, the new customer-centric service model was built together with the customer and employees. Why do you think all these stakeholders were involved to the creation process? Answer is simple; customer-centric development work is always done together with a customer and internal stakeholders. Customer´s needs, desires and wishes cannot be decided on their behalf by the company management or employees. As an outcome in this case, the service model included the service promise, service delivery in addition to customer-centric service measurement and rewarding methods. All the key and standard elements of customer-centric service.

Why You Need to Find Your Way into the Customer´s Heart?

You must be wondering how this can be the invincible competitive advantage for your company. Think for the moment. Can the outcome be something your competitors copy and put in practice? Answer is clear, no they cannot. The outcome created together with you and your customer will always focus on building emotional bond between you and your customer and that is where the competitive advantage comes from, winning the heart of your customer.

Additional info:
Due to the case company policy, thesis isn’t available in Theseus. For further information, please contact:

Katja Kokko

moc.l1547915585iamg@1547915585okkok1547915585.ajta1547915585k1547915585

Pia Hellman

if.ai1547915585lopor1547915585tem@n1547915585amlle1547915585h.aip1547915585

Recommended books:

Designing the customer-centric organization: a guide to strategy, structure, and process, Jay R. Galbraith

Designing Dynamic Organizations: A Hands-On Guide for Leaders at All Levels, Jay R, Galbraith, Diane Downey and Amy Kates

Sources:

Davis, Jennifer (2018). Get Paid for Paying Attention: 4 Lessons In Customer-Centricity. In Forbes.
Accessed December 13, 2018.

Galbraith Management Consultants (2018). Star Model. In Galbraith Management Consultants.
Accessed December 13, 2018.

Garner, Benson (2015). Implementing Your Business Model With the Galbraith Star Model. In Strategyzer. Accessed December 13, 2018.

Goasduff, Laurence (2018). Is Your Organization Customer-centric? In Gartner.
Accessed December 13, 2018.

Yohn, Denise Lee (2018). 6 Ways to Build a Customer-Centric Culture. In Harvard Business Review.
December 13, 2018.

The image: Pixabay.com

I remember myself some 3-4 years ago. I had a struggle in deciding if I could go and study in Helsinki for a Master’s degree, or is it totally out of question for me, as I lived in Rauma at that time. I decided to take this crazy step and travelled twice a week to Helsinki along with a full-time job. I became a student in Master’s program in Logistics Management.

My studies were very interesting and fulfilling, but I could not get rid of my worries at work. My job challenge was to gain real benefit for the company by introducing common transportation and logistics services (by air and ocean) throughout a big corporation operating globally. This was a big and real challenge. Fortunately, I was able to concentrate on this problem in my Master’s thesis project. I researched the current state of logistics in business units, and revised the existing approach with the help of my colleagues and thesis instructors. These efforts helped to take a new perspective and look at the old and familiar problem with new eyes.

The key suggestion for the company was to strengthen the global logistics by managing it through an effective steering global logistics group. This group should be connected by well-working communication between the responsible persons in business units. The next step was to investigate, collect and prioritize the needs and wishes of the business units, as well as to investigate their experiences with current logistics. Based on this information, and with the help of the members of the steering group, to establish a list if KPIs for the corporate logistics provider, that would address their needs, and conscientiously select the best out of the desirable providers. Only after it could be possible to introduce corporate contacts for transportation and logistics.

The key finding was, that launching contracts with a global transportation and logistics providers alone is absolutely not enough. The critical issues are: (a) to involve the business units in constructive cooperation by identifying and following mutual interests and gains, and (b) to closely follow the implementation by monitoring a carefully selected list of KPIs that would reflect the real needs of business units. In short, to establish the needs, to identify mutual interests, and to closely follow the performance.

This was an interesting and challenging job. I learned a lot while working for Metso and Valmet where all types of logistics were well-organized and extensively used, and my experience there was diverse.

Half a year ago I got the position in Cargotec where I have been leading Logistics for the Cargotec group. The company has over 10 factories where equipment is produced in such countries as US, Poland, Malaysia, and China. On the other hand, spare parts warehouses are located, for example in France, and multiple other countries. All of these places need to be connected with well-working logistics.

This is a challenge and a big gain for the company. Interestingly, this is also a continuation of my thesis topic, but growing in size and scale. After the first implementation, it will make another round of testing myself, the selected approach, and the new steering logistics group that will play a key role in these developments.

I am looking forward to the future, to effective cooperation and enthusiastic and experienced colleagues, and to find good solutions together. The next immediate steps include defining the global logistics strategy for the next three years, hearing everyone, exploring the current ways, finding mutual gains, prioritizing and deciding together, and following implementations effectively.

In addition, I want to thank my work colleagues, my fellow students, and Metropolia instructors from my previous studies. I use all my lecture notes and my thesis results from Metropolia still today. They have been absolutely helpful.

Even though I graduated two years ago, I still remember your contribution to get us to graduate in time. It was really worth of travelling 67 times between Rauma and Helsinki, nearly 35 000 kilometers in total, between September and May 2016 by Onnibus. I am now living in Turku, where we moved from Rauma, and almost every week I am in Helsinki, Ruoholahti, passing by Metropolia. My many thanks to you all, from Pasi Kurkinen, the “long distance man”.

Pasi Kurkinen

Pasi Kurkinen, Master of Engineering in Logistics Management (2016) lives in Turku and works for Cargotec Corporation as a Global category manager for logistics. He moved to this position half a year ago, after working with global logistics in Metso and Valmet. Two years ago Kurkinen also completed his Master’s thesis project in Metropolia UAS on his key challenge at work – how to implement unified logistics contacts in a global company, and how to commit business units to change from individual to corporate transportation and logistics.

Kuvalähde: paulbr75,  Pixabay.com, CC0.

 

Robotics is strongly impacting the daily service operations today, both globally and on the micro level.

What is RPA?

Robotics Process Automation (RPA) in services industry is ‘an application of technology leading to automating business processes’. In other words, this is a situation when a ‘software robot’  captures and follows the same steps as a human worker would do when managing business processes: in transactions, data manipulation, and even communication with other digital systems (Willcocks et al. 2015).

RPA is a concept imitating human thinking that is based on reasoning. The PRA process means a succession of definitions and optimization of steps, the same as in the process done by a human, but also streamlining it, and then checking and testing it.

In the era of innovation, RPA is a quite young concept in the business science, only a few years old, but already perceived as the key element of the 6th innovation wave, along with Intelligent Automation (IA) and Artificial Intelligence (AI).

PRA innovation for business and society

This visible change to robots from human workers has provided a lot of debate in society. Similar magnitude of innovation, that disrupted traditional ways of doing things, happened already multiple times in human history. Each time it caused some bias and uncertainty among people. Among the most recent disruptions are the growing computer power, mobile and digital networks, and innovations in biotech industry. Every time, a new wave of innovation seemed to displace the old types of jobs and caused some degree of fear, or even panic in the population.

Recently, following a rapid growth of service offshoring industry and facing consequences of relocating operational tasks to more cost-efficient locations (Kedziora et al. 2017), more and more companies have started looking towards robots and automatic solutions.  Business sees PRA as a remedy to ease a huge amount of various repetitive business tasks.

The trend in the 1990-2000-s was visible in using global sourcing (in simple words, outsourcing production and services). It later changed to nearshoring in the 2010-s (or getting production and services closer to home). Then, very recently business has shifted to digital sourcing (robotic workforce).  This change in global services was triggered by the need to transfer some tasks to a ‘more efficient delivery source’

Robotization is gaining speed as we speak

Presently, the popularity of robotics started rising really fast! There are many reasons for that:

• first, because robotics makes repetitive work faster and cheaper
• second, based on the estimations, there is around 35% of legacy systems in companies. They will need replacement in near future
• finally, similar to other current solutions, robotics is based on the Cloud. It makes its operations faster, cheaper and more sustainable.

This last reason is especially important from the technical perspective. Cloud computing is based on the delivery of hardware infrastructure, applications, and systems software as a service(Armbrust et al. 2009). In other words, it provides a wonderful platform to sit a robot in a highly secure cloud computing facility. It is also more sustainable and ‘green’ to use.

As a result, robotization has proven to be more effective that having humans in different countries. It optimizes capacity and makes literally ‘zero’ mistakes. It also makes a greener and more sustainable solution by reducing multiple types of operating costs.

How to build an RPA solution?

To address the demand for robots, the top global companies started offering Automation as a Service (AasS), a new business model for automated services. The software robot is able to automate various business processes (such as invoicing, procurement, customer service, etc), available 24/7, and operating interruption and error free, since robots rely on well-described processes with rules and structured data. The execution of change, according to the IA management framework, enables to develop virtual workforce in the cloud, which can be referred to as Centre of Excellence (CoE) (Norian, 2018).

Presently, AasS solutions are based on first, the rule-based robotics, and second, Artificial Intelligence (AI) and Machine Learning (ML). Thus, we as users witness a paradigm shift from traditional coding and programming to the use of machine learning.  

Furthermore, ML algorithms are increasingly ‘taught’ to generate business rules for the robots, through exploring, describing and utilizing big data. Since such a data-driven approach requires large data sets, robotics is meaningful for such processes that are done massively, repetitively, and need high accuracy. In this case, investment in robotics will absolutely pay off.

Optimization and management of a robotized process is possible through the Advanced User Interfaces (AUI) such as used for chat bots. They are based on natural language processing, and in the future, with the increased understanding of meaning in voice commands, will also be managed by voice. Most likely, the next coming trend is Cognitive Automation, and the future of robotics is very bright and promising.

Damian Kedziora

Damian Kedziora is a Doctor of Science in Industrial Engineering and Management from Lappeenranta University of Technology (2018). He has been working for top global corporations of banking and ICT industry for the past 6 years, focused on efficient service migrations for offshore locations. His focus of interests moved from the outsourcing of services to robotizing processes and using artificial intelligence in operations. Dr. Kedziora is currently an Intelligent Automation Solution consultant at NORIAN Accounting Oy*. He shared his insights about the trends in Robotic Process Automation (RPA) to Master’s students in Industrial Management.

*NORIAN helps over 2,000 businesses in Northern Europe and Germany simplify their business and administrative processes. NORIAN has been serving businesses for twenty years and have been continuously investing in improving services and the newest technologies. The company is home to “Intelligent Automation by NORIAN”, one of the leading Nordic providers of Robotic Process Automation. Visit www.norian.eu to learn more.

References

1. Armbrust, M., Fox, A., Griffith, R., Joseph, A. D., Katz, R. H., Konwinski, A., Lee, G., Patterson, D. A., Rabkin, A., Stoica, I.& Zaharia, M. (2009). Above the Clouds: A Berkeley View of Cloud Computing, Technical Report No. UCB/EECS-2009-28
2. Kedziora, D. Academic Insights on the Service Offshoring Industry’s Challenges Outsourcing&More Magazine. Mach 2017. Vol. 33, No. 2. (ISSN 2083-8867)
3. NORIAN (2018): ‘Free your employees from monotonous tasks’ // access date, 23.10.18: https://www.iabynorian.com/services/free-employees-monotonous-tasks/
4. Willcocks, L.P., Lacity, M. and Craig, A. (2015). The IT Function and Robotic Process Automation. The Outsourcing Unit Working Paper Series, pp. 1–39, The London School of Economics and Political Science, London, UK.