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Why online means the end of IT as we know it

October 22, 2013 Leave a comment

If you work for any fast growing company these days it’s highly likely that enabling customers to access your products and services through online is a key plank in your company’s strategy and success.

Which, in an age of mass technology consumerism, probably also means that your company has a technology-enabled workforce to support your customers. And your Information Technology department has a dual focus of supporting the enterprise as well as an external focus in creating great digital customer experiences.

And what I’ve firmly come to believe is that this situation of having the most technologically-skilled part of your workforce getting it both ways is bad for your IT department and bad for your business.

If you look back this wasn’t the nature of IT departments when IT departments originated back in the  60s and 70s. Your original IT department was born out of the teams of skilled technicians who made the telephone network in your organisation work; kept the fax machines humming and were the team responsible for grappling with the implication of the 4004 microprocessor post 1971.

But because most companies weren’t technology-focused, IT weren’t part of the “business” as we’d recognise “the business” now. They were the electrical engineers who kept the lights on and spent their days ensuring the workforce could communicate and share information as efficiently as possible. They would never, or rarely, deal with the needs of external customers.

With the dawning of the internet and the growth of digital businesses in the 80s and 90s it suddenly occurred to businesses that these backroom guys were also the ones who were also able to code web pages; build servers and were suddenly essential to digitally enablement. IT’s role was now about building internet experiences and more for your external customers and also keeping the phones and fax machines running.

So the technology guys suddenly became absolutely key to business strategies and the customer experience. For technology companies founded in the 1970s like Apple, Microsoft the IT department was the business. To work for one of these companies you obviously needed to understand technology – but equally obviously your customer needs as well. These technology companies, so familiar now, changed the face of business and IT forever.

Amazon is a company founded in the mid 1980s and whose success is purely due to embracing the new paradigm from the get go. This was an IT department selling books to the world who then ended up selling IT to the world. Their CEO Jeff Bezos came from Wall Street but was, and is, intensely customer focused.

He once said: “I’ve always been at the intersection of computers and whatever they can revolutionize.
True to his words Bezos created a company that didn’t separate the IT department from the business, its IT department was its business.

And Amazon’s success should be a template for all companies worth their salt these days – and for most digital start-ups this is the case. The techies aren’t in the basement cooking up the medicine – they’re in customer-facing delivery teams working alongside the product and marketing teams.

The focus of an IT department should be not just on satisfying internal customers. They need to be part of the business (if not the business) that’s working to satisfy the customers who buy your products and services. Drag them out of the basement and get them in front of real customers.

In the companies I’ve worked for in the last 10 years (Orange; Telecom NZ and Kiwibank) I’ve experienced both ends of the spectrum as the pendulum has swung between IT teams being integrated or not integrated into business units. In that time the most success I have seen is when IT hasn’t been IT, but been driving the business from the front. And that’s why many companies, including my own, are embracing Agile software development and delivery.

That’s great for external customers – and internal staff too:

Google CIO Ben Fried: “I see a lot of CIOs spending a lot of time — which is very important to do — on major business initiatives. But I often see an inadequate amount of time spent where the day-to-day, most frequent touchpoints are, which is with all the other ways the people in the company are their users. One of the big changes that has come with the mass consumerization of technology is that IT needs to flip that around a little and spend more time focusing on the overall employee experience.” There’s more from him here.

With online being a key strategy for all large businesses I believe the pendulum is now stuck and the era of large IT departments is over. IT is our business.

Flabby finances and fit bodies

April 15, 2013 3 comments

You would think personal finance management – the art of managing your money and achieving goals – would be the easiest thing to provide an online solution for.

That was certainly the thinking three or four years ago when every bank worth its salt started developing online tools that allowed customers to get a rich and useful picture of their overall finances – Kiwibank’s Heaps is an example.

heaps logo

Heaps! personal finance management

I mean it makes perfect logical sense – every bank has a wealth of transactional information that, when packaged right, can provide a huge amount of insight into where a customer’s money is going and also through automation take out all the hard work of having to manually pull together a budget.

This was the topic of a great cubicle conversation with one of my colleagues this week. D and I have been working together for the past five years on a number of major online projects – including online personal finance management.

Now D is probably one of the fittest and strongest men I know as he puts his body through a regular gym/cross fitness regime every week – and has done so as long as I’ve been working with him. His physical and mental discipline have given him a toned and hard-muscled body that would put most of us to shame. That’s his thing and even through major life interventions such as children, injury, work pressure he has kept at the training and never stopped.

My thing is Aikido. I’ve been training three times a week for as long as D and I have been working together – so it’s a good common bond that can set off some good conversations about the physical and mental sacrifices and rewards you get from long-term, dedication to doing something positive with your body.

And that’s how we got to talking about the similarities between personal finance management and physical body management – whether that be the cross-training gym, the dojo or even an organisation like Weightwatchers or Jenny Craig.

“Never be too rich…”

I don’t think there’s one person I know who wouldn’t have just a little sympathy for Wallace Simpson’s notorious quote that: “One can’t be too rich or too thin”.  By that I mean probably 95% of us would love to be a few kilograms lighter and a few thousand dollars richer. Not obsessively thinner or richer – just in control of both.

The trouble is 95 per cent of people who attempt to lose weight fail. This year it’s estimated in the US  100 million people are dieting trying to achieve the latter part of Mrs Simpson’s edict. It’s a billion dollar industry but for most it is a cyclical pattern of joining a gym or weight-loss program in January and abandonment sometime after.

With trying to get your finances into shape it’s a similar pattern – even with tools that take out all the hard work. Some people do stick at it religiously – but they are the people who were running a budget on a spreadsheet before they got these great online tools.

Finance writer Amanda Morrall says the trick is not to treat personal finances as something separate from the rest of your life. In her latest book Money Matters: Get Your Life and $$$ Sorted, Morrall looks at how average people, with ordinary  jobs, have achieved financial management, and indeed wealth, through actually connecting with their true selves. It’s a powerful insight and a great book that combines solutions with motivating tips to get people living the life they should be living.

A quote in the book has been resounding in my head since reading it. Morrall quotes the Dalai Lama responding to a question about what surprised him most about humanity:

“Man. Because he sacrifices his health in order to make money. Then he sacrifices his money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die; and then dies having never really lived.”

I think that describes too many of us.

Common link

But back to my cubicle conversation with D. After a bit we found a common link between building physical strength and muscle; mastering a martial art; losing weight and keeping it off or spending less than you earn and building wealth. What’s the secret?

I think it’s a mixture of truly understanding what your life’s purpose is and, as Morrall writes, building your life around that. Otherwise you end up risking falling “into the trap of consumption where financial vampires are only too willing to take advantage of your vulnerability and exploit your financial weaknesses”.

Joining a gym or a dojo or a weightloss programme are pretty much in the same vein as opening up a tool like Heaps, Xero or Sorted. They are all capable of enabling a life-changing action – but only if they can be coupled with some internal motivation to make a life-changing action.

True it may only take one small step to begin the journey – and online can be a powerful source of sparks of inspiration – but the first step must be followed by many others heading in the same direction to get somewhere meaningful.

Creating personality online

March 28, 2013 Leave a comment

Kiwibank customers have been engaging with their Online Relationship Managers for a a year or so now.

Kiwibank ORM

Kiwibank Online Relationship Manager Becks on mobile

I have written about our unique online customer champions before and they also received a fair amount of media attention (for a banking innovation) when we put them into the Kiwibank mobile banking app on IOS and Android. And to cap off the publicity they won the 2012 NZ Innovators Award for Marketing and Communications late last year.

The rationale behind the Online Relationship Managers (or the Oh-Ar-Ems as they have become known at Kiwibank) was to reinvent the traditional personal banking relationship model for customers who are now more at home in a digital world rather than a bricks and mortar one. And, as most banks know, that’s a mobile digital world these days.

The good old days

The traditional, 20th Century-style relationship manager is someone you meet when you first join the bank at a branch somewhere in town. Most people meet them once and then probably won’t see them again until there’s a life-change moment requiring a lending or investment decision e.g. you need a bigger house; want to go on a trip; upgrade the car etc. This happens maybe every couple of years or so. If you’re like me you try and deal with bank relationship managers mostly by email – rather than sacrifice a lunchtime walking down to the branch and sitting in an office for an hour.

And if you get a good one the irony is you probably won’t have them very long because the bank, for good reasons, will probably promote them and they’ll be off become a branch manager somewhere else. With my first bank after coming back to New Zealand from the UK I had three relationship managers in four years. It didn’t bother me too much because I knew I was just another name in a very long list of customers and I tried to keep my dealings with them to emails, because it was easier for the few interactions I had.

The first was reasonably extrovert and bubbly late-20s early 30s woman and sorted out my mortgage; the next was sporty-looking late 30s-early 40s Kiwi bloke who during my set up for internet banking managed to misspell my log in name so I’ve had to misspell it ever since. Maybe not a biggie – and probably made it more secure – but I’ve still always felt that I’ve had to carry a small bank error with me in every online interaction.

The third was a down-to-earth 40-something proud Mum of two who nailed a “moment of truth” refinancing request at a critical time for me and my family. And she also gave me a humorous insight into how her bank set and communicated its interest rates by cheerily sharing with me some insider stories as she tapped away at her computer.

Good eggs each and every one of them – although as I only got to meet each of them once over that four year period I never felt we were that connected.

My banking rite of passage

My interactions with these relationship managers were very different from the first experience I can remember with a bank manager. I would have been about 11 or 12 and my father took me down to our bank branch in Ashburton as “it was about time you met the people at the bank”.  As we approached the glossy pale-wood varnished counter a female teller greeted Dad. Behind her a large man in a dark suit and tie appeared from out of an office and, with a very hale and hearty salutation, came from behind the counter and pumped Dad’s hand. Dad introduced me and said he “thought it was about time my son met the Bank” in a kind of jokey fashion.

The Bank Manager turned his full attention to me, looking me right in the eye and shaking my hand, my other hand clutching the cash to deposit. As my face grew redder as a result of this unrelenting adult attention – he told me how pleased he would be to look after my money over the years. He asked if I wanted to give over that money, I looked to Dad and he nodded approval of this action. I was then directed to the teller where I went through the process of handing over my cash and receiving a passbook with the cash translated into a single entry in blue pen, dated, stamped and signed. The teller explained that over time the bank would pay me interest on what money was in the account – so the more I put in (ie the less I spent on trips to Christchurch toy shops) the more money the bank would pay me.

As we left the bank I felt like I had been inducted through a rite of passage. I had been given an insight into an engine of society and met an engineer who managed that engine. He knew my Dad and now me – so I was now inextricably linked by more than just my passbook and some numbers in it. The Bank Manager knew my name and my face and even though I knew my humble finances were small in this scheme of things – they were now generating interest, both financial and personal. And therefore I was now a person of interest.

And as with many other experiences in life that was the glamour moment of banking for me. After that it was vanilla and in the background as banking became more and more commoditised. Like buying toothpaste or petrol – the only standout experience being Barclays in the UK who gave me a fantastic student package which made the difference during my university years. I stuck with them for 10 years after that before being seduced by a revolving home loan deal with a building society.

For most of us the bank managers of old, who knew you, your business and your family, and could exercise that personal touch at moments of truth have gone the way of the Moa and the Dodo. Their replacements, while decent people, aren’t set up by banks to be anything more than a pale comparison. And most of us don’t have the time or inclination to troop down to their office to engage – what’s the point if there’s no real personality to deal with. You might as well do an email.

Putting the personality back into personal banking

So what if you could have a real individual to look after your banking with all the convenience of online, to ensure your interaction with the bank was on your terms? That’s what we asked ourselves at Kiwibank and came up with the Online Relationship Managers – the relationship managers for 21st century banking but for all our online customers. They would turn the traditional model on its head by focusing on three key problems that came out of customer research :

1. I want to be treated as an individual;

2. I want the convenience of delegating my issues online:

3: I want to deal with one person

What was key was that the service experience had to embody the values of Kiwibank – Make It Easy, Do What’s Right, Raise The Bar and Go Further Together. To be a part of Kiwibank you really have to sign up to these – it’s the only place I’ve worked where they are not just lip-service.The hardest conversations we had in the project were about how we could ensure the Online Relationship Managers would live up to these values. In my opinion they are our Taonga and what make the difference in our service experience.

The easiest decision was to put the Online Relationship Managers onto our mobile app. The internet is now all about mobility and this suddenly meant customers now have a bank in the palm of their hand.

But at the heart of it,  our Online Relationship Managers are not about technology – it’s a service innovation by putting people into an internet banking environment that has been purely about transactional information in the past.

The reaction of customers has been fascinating. There have been two marriage requests; a few “fancy dinner?” invites; regular delight at being wished a happy birthday or Kiwibank anniversary date.

ORM FB comment 2

The most heart-warming was from a woman who needed help to finance a trip for a relative who was dying of cancer and whose problem was sorted out by their Online Relationship Manager.

Bill Gates once famously prophesised that society needed banking, but not necessarily banks. Banks that have looked to gain scale by automating and removing the human factor are living up to that statement. Banking has always been more than a ledger and without personality in the online environment, Bill Gates’ words are bang on.