Cloud computing hype has been “deafening” lately, as the Economist puts it plainly. But, is it really hype or is it an accurate vision of the future of enterprise?

Given the straitened times, you would have thought that cash-strapped companies would be jumping at the chance to outsource their computing operations to the Amazons, Googles, Salesforces and Microsofts of the world. Along with others, such providers have been vying to offer their customers access to data-processing and storage capacity, plus all the usual business software running on their own servers, via the internet or more private connections… Yet there have been few takers. What is holding IT managers back is fear about security. // via Tech.view: Cloudy with a chance of rain | The Economist.

I value the opinion of the author of this article, as he brings up valid objections to the technology, but ultimately, I believe that cloud is the future of IT; notwithstanding the security threat belabored above.

Why?

Because history has proven many times that firms that focus on their core competencies survive and thrive. Yes, security is a valid concern for in-house control, but I can envision a world where cloud companies will have more than adequate levels of protection, given the nature of their core competency–the cloud.

Companies that are not enterprise software or consulting firms should let the heavy lifting take place by the pros. It’s as simple as that. Companies should focus on what they do and let the business service firms come in and do what they do: cut costs, optimize, and deliver high performance results.

Beyond that simple business logic, it just makes sense that firms will start putting assets in the cloud. Why maintain systems, clients, software, and enterprise applications when another company can incur those costs and just charge you for what you use? Scalability is key here, and will continue into the future.

Fear

Clearly, firms are scared about security. Rightfully so. They are also scared about up-time and stability. Microsoft and Google have recently dealt with very public issues regarding cloud technology (think Sidekick and Gmail outages). BUT–flexible computing is the future, and you will see, as the technology is slowly adopted, more firms will jump on board. The future is in outsourced computing and the cloud.

In the cloud, a company can contract for redundancy, and why not let the people who specialize in these technologies be in charge of maintaining your data. After all, if you are a baker, you wouldn’t expect to install the ovens and supply your own gas to fire them, would you? You would get a specialist: an oven installer, and contract with a utility to supply the store. Here, the cloud is the utility. They manage the processes that supply your bakery’s pipeline.

The analogy is scalable. If you are in enterprise, you wouldn’t expect to be an expert in implementations of databases and customer relationship management software, so why not let an expert deal with that, so you can focus on what you do best, interacting with your customers. Technology is a partner, and helps facilitate business, it is not the core of your business. And for that reason, the cloud is a perfect solution.

Risk and Rewards

Yes, there is risk. There is risk in everything we do in business. Calculated and managed risk can involve great reward and with technology improving at such breakneck speeds, these risks can be minimized. Redundancy and security solutions can be customized to alleviate any concerns a company may have regarding outsourcing technology and processing information. So, why not let a professional that has expertise in assuming those levels of risk, and manages global security on a holistic scale do that, rather than go it alone when it’s not your forte?

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Due to the nature of my job, I find that I am constantly thinking about how to improve customer satisfaction, but as a consumer, it’s also something that I am acutely aware of when it’s done incredibly well (see my post about J.Crew).

Add technology to the mix, and you can bring satisfaction levels to new heights with process innovation and customer facing technological improvements.

I also believe that an acute and strict focus on customer service is also increasingly important for all business transactions — even if your firm is not in the retail or hospitality industries. Why? Because there is always a competitor eager to snap up your customers if you don’t meet their expectations perfectly. This is where technology can greatly add value, and create competitive advantage. Just ask Apple and USAA.

Technology Drivers in Satisfaction

This year Apple has ranked third in Business Week’s customer service survey. Apple’s service technology including the genius bar, and “roving in-store checkout clerks” were primary reasons listed for their success.

The company’s sleek devices and user-friendly software aren’t its only innovations. Appointments at Apple’s (AAPL) “Genius Bars” and its roving in-store checkout clerks are just two ways the company has pioneered new approaches to customer service. The iPhone maker is likely got a bump this year as more companies created customer-friendly apps for their own services, helping to burnish Apple’s customer service brand. // via Customer Service Champs 2010: No. 3 Apple - BusinessWeek

The article continues that USAA (an online-based banking/insurance institution for the military) has taken the number two spot, mainly because of the use of technology within it’s “brick-and-mortar-less” operations and their iPhone app. Just think, when you are in Iraq, how are you going to get to your nearest branch? What about mailing in a check? That’s where technology comes into play.

When Staff Sergeant Corey Mason wants to deposit a check, he doesn’t use an ATM, a teller at a branch, or even a stamped envelope and deposit slip. Rather, the 37-year-old GPS systems specialist takes a picture of the check with his iPhone, uses an app to send it to his bank, and within minutes the money shows up in his account. // via USAA’s Battle Plan - BusinessWeek.

In reading the business week article about USAA, it’s remarkable how their revolutionary technology has increased customer satisfaction, and created life long relationships and brand loyalty.

It’s not just the people piece any more, it’s the technology behind their customer interactions. What I find even more surprising, is that they are able to quantify their return-on-investment in technology with top-notch customer service ratings and rankings in these types of surveys. So very difficult to make a business case for these technologies, but with the right filter, it can mean the difference between a world-class and mediocre firm.

Take Note

It is remarkable how technology has influenced customer service in today’s marketplace and world-class brands like Apple and USAA are at the forefront of this phenomenon. This is certainly not an easy feat these days, but is something that other service brands should take note of and strive for in order to survive the onslaught of Consumer 2.0.

 — 

Full Disclosure: I am an employee of Apple. I am not commenting on the company other than to report a positive Business week article. Any opinion above is my own, and that not of my employer.


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This week, I was fortunate (and unfortunate) enough to have been by my 88 year old grandfather’s side as he passed away from what Hospice called “adult failure to thrive.”

In essence, he was ready to let go, and did so peacefully and at home with his remaining two children, and two of his grandchildren. He was a kind man, and a devoted United States Marine who was given an Honor Guard at his funeral for his service during World War II. Quite a fitting send off for Sgt. George J. Coppola, Sr. You will be missed.

The hours and days leading up to his peaceful departure were anything but that. I’ll spare the details, but with the blizzard and some emergency work situations that needed my attention, there was not much time left for me to think about packing to go home to see my grandfather.

When I realized that my grandfather was deteriorating at an alarming speed, and the end was near, I rushed home to be with him and my family. In the chaos that led up to my trip, I forgot most of the clothing I would need to wear to the services, viewing, funeral mass and repast that we would be having–the Italian heritage bleeding through.

(I know that in the grand scheme of things, this is quite trivial. And the customer service I received after trying to find something suitable to wear to the funeral to honor my grandfather, was anything but trivial.)

Around 11p two days before I would need my suit, I noticed it was not with me. How could I forget that I didn’t have a suit for the funeral? I was agitated at myself for such a simple mistake. As a Marine, he always made sure the grandkids were dressed, and his funeral would be no exception.

I had to make a quick decision, and I remembered reading an article in the New York Times about CEO Mickey Drexler and his retake on American suiting at J.Crew, and how well received it had been. I felt that my best bet, for a properly fitted, last minute suit, would be through their brand.

No Solution.

I called the 800 number, already agitated, and explained my situation to the call center agent. I thought that I was speaking with one of their “personal shoppers” which I receive weekly postal-mail about, and special “front-of-the-line” phone numbers to call. (Marketing!)

I said that I had an emergency and that I am without a suit but I need one by tomorrow afternoon. I explained I could not get it online, but that if the agent could let me know what stores carry men’s suiting, I would be able to see if they had my size, and problem solved.

The young lady told me that the online store doesn’t have that type information, and I would have to call each individual store to see if they carry men’s suiting, or I would need a particular part number and she could find out if it was a retail part.

What?

I was thoroughly confused. J.Crew has been over advertising their “white glove” personal shopping service, and for me to get the response I did, I was dumbfounded.

Conveniently, J.Crew lists a 24-7 email address that I sent a brief but specific query to. I needed my suit for an emergency situation, and I needed it the next day. I just wanted help in finding a store that would meet my needs.

J.Crew Customer Care

Within 10 minutes, at 11:40 that evening, a representative from J.Crew called my cell. I realized that I didn’t provide my cell in my email, which I’ll speak to later. The agent offered her apologies for the mix up, explained the process, asked for my sizes, and said she would be back to me within 30 minutes or so. Either by email or cell.

At 12:15a, I received another phone call, and they had located a grey suit for me, and they were placing it on hold. They also had just sent me pictures and the details to my email address with this information. The following morning, just after 9a, another agent called and said he had already talked to the personal shopper at the store, and everything will be ready for me to pick up when I get there.

My WOW Moment

I was blown away by a few things about this experience. First their customer service was exceptional. I wasn’t expecting a return phone call, and yet, had one within minutes. I didn’t even give them my phone number, so they used their relationship manager to uncover my past “contacts” and called me at the most likely number I would be reachable at.

I then wasn’t expecting to have them find a suit for me, and yet, they did, but what was most impressive, was that the technical ability for them to do such a thing would not have been possible without a proper CRM system in place, and the training of their more veteran staffers to take care of unique and unfamiliar situations.

For them to take my size from me at midnight, find a store nearby that they were certain would have it in stock, and then place it on hold without anyone in the store was remarkable.

This is why I love working in technology. Take a situation like the one I was in, and from a systems stand point, J.Crew did an amazing job at repairing a relationship that would have caused me to bring my business elsewhere. It worked out so well for me, that I’m spending time writing about this, and sharing my fondness for the relationship management systems they have in place and training they provide for their people.

Job well done J.Crew

Glad systems integration is truly having an impact on your customer’s lives.

Update (03/04/10 9p)

I’ve had some comments from friends relating to the fact that what transpired was “people” related, as opposed to technologically related, but I will gladly elaborate on why I feel this is a win for technology, without downplaying the people piece.

Yes, it was a phone call that initiated this exchange, and a return phone call that made me think twice about the customer service that I received from J.Crew. But, it was a CRM package that allowed the rep to contact me in a matter of minutes when my email came through the generic “24-7@jcrew.com.” It was a CRM package that gave the rep my cell phone number when my email failed to list one. It was an ERP package that allowed the rep to track down inventories at closed locations, and place them on hold for me, and it was a CRM system that triggered a follow-up phone call the next morning.

The processes that are in place and the technologies that are integrated into said processes, are what enabled the “people piece” to work flawlessly. The training systems, the exceptional customer service levels, and the quest for client satisfaction are all filters that firms use to transform mediocre experiences into those of the exceptional variety. But, to have these experiences on a global level with the sheer volume of transactions that take place, it absolutely requires incredibly integrated systems just to handle the simple workload, let alone, keep track of the progress of each customer “touch.”

So, yes, it was ultimately a personal experience between myself and many service reps at J.Crew throughout their store and their personal shopping center, but it was the technology working behind the scenes and systems integration of those technologies that made it all possible. At least, in my biased opinion.

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When I speak with my colleagues about problem solving and structured thinking, I find that a common theme has been the “systems development life cycle,” as it has been incredibly useful tool for me in these very situations.

As I have these conversations, it’s become clear that I truly am an incredibly process oriented individual and I find great value in structured thinking and structured problem solving, especially when it involves a system of sorts. I believe that this type of thinking can lead to innovative solutions, and more times than not, it will ensure positive results.

I believe that this also pertains to another area that I have been talking about with my team, driving results. How do you motivate a group of individuals to come together to accomplish a task that may seem insurmountable to some?

I believe it happens through structured thinking, through small steps and positive feedback loops which help to ensure success over time–sustainable competitive advantage–if you will.

Lately, I have also been thinking a great deal about my style of leadership and how I generate results, how I motivate, and what my problem solving process looks like. With all of these conversations happening at once, I came to a rather obvious conclusion: most things can be treated as a system that needs refinement.

Everything is a system.

What I mean when I say “everything is a system” is really that most situations one encounters within the business world can be classified as a series of smaller units working together to achieve a greater result.

Therefore, when dealing with a goal or task, you can almost always break said goal down into smaller, more manageable parts, and deal with each of those parts separately and jointly to solve the problem at hand. Sounds rational and a bit like common sense, no?

I find myself doing this daily during typical problem solving.

When needing to maintain strong performance in specific business metrics (which area is almost always complex) it is important to be process oriented and follow a structured methodology to achieve results.

Systems Development Life Cycle

The systems development life cycle (SDLC) is a process of creating or altering systems and refers to the models or methodologies that people use to develop those systems.

It is typically a project management technique that divides complex projects into smaller, more easily managed phases. Segmenting projects allows managers to verify the successful completion of project phases before moving forward with subsequent phases. It typically follows a logical process order, which involves the requirements stage, design stage, implementation stage, verification (testing) stage, and maintenance stage.

This is a very specific methodology to solving complex systems issues–and depending on the scope of the project–there are two main types of methodologies that one might utilize: the Waterfall method, or the newer, quicker, Agile method. There is endless debate as to which is the “proper” method to follow, but in order to continue the discussion, it is important to provide a brief background on each.

Waterfall (tried and true!)

The Waterfall method is such that one follows a linear and strict set of stages during the entire development process, and one is unable to revisit any previous stage without restarting from the beginning. Because of this format, it is considered on of the best methods for extremely large and detailed systems.

It follows seven unique stages: identification and selection, initiation and planning, analysis, requirements, design, implementation, and maintenance.

This process brings discipline, rigor, and order to the problem solving and development process of these complex systems, while facilitating a knowledge transfer at each stage. This enables the ability to verify the success of each stage. Using the waterfall method will often times result in high quality systems that exceeds client (internal/external) expectations, reaches completion within time and cost limits, and is efficient and effective.

The method moves forward through the stages from top to bottom just like a waterfall, hence the name. This does not mean that the phases may not overlap, but ideally, there will be no backward movement in the life cycle.

However, some critics argue that such a specific and forward moving process means that “glitches” or problems that arise early-on can exponentially grow in cost as the project develops. For example, a $10 glitch in the analysis phase, can reach $1M+ by the implementation stage, and moving backwards to fix such a problem is practically an impossibility due to the complexity of the system.

Other critics argue that clients may not be aware of exactly which requirements they need, and only by reviewing a working prototype and commenting on it will they become apparent. Frequently, clients may change their requirements, and the Waterfall methodology does not permit this type of ambiguity. For this reason, ensuring accurate analysis and requirements collection is of the utmost importance, which requires extreme diligence and rigor by the business analyst group working on the project.

Agile (quick!)

With the critics of Waterfall touting the seemingly unnecessary level of risk involved, Agile comes into play.

It is a “low over-head method” that “emphasizes values and principles rather than processes.” Working in cycles i.e. a week, a month, a quarter, etc., project priorities are re-evaluated at the end of each cycle and changes are made to ensure stages meet requirements. The system is in constant testing with this method, and it allows for quick course correction and level setting throughout the entire system development life cycle. (Major Benefit!)

The Agile Introduction site specifies the four principles that constitute Agile methods as:

  1. The reigning supreme of individuals and interactions over processes and tools.
  2. As does, working software over comprehensive documentation.
  3. Likewise, customer collaboration over contract negotiation.
  4. And again, responding to change over plan follow-throughs.

To synopsize the difference between the two, one can say the classic Waterfall method stands for predictability, while Agile methodology spells adaptability. Agile methods are good at reducing overheads, such as, rationale, justification, documentation and meetings, keeping them as low as is possible.” And, that is why Agile benefits small teams with constantly changing requirements, rather more than larger more complex projects like ERP.

The Agile Introduction site continues with “Agile, based on empirical rather than defined methods (Waterfall) is all about light maneuverability and sufficiency for facilitating future development. By defined methods what one means is that one plans first and then enforces these plans. However, Agile methods involve planning what one wants and then adapting these plans to the results.”

Waterfall vs. Agile

Waterfall’s well-defined stages allow for thorough planning, rigor in process (especially for logical design, implementation and deployment) and work best with incredibly large and complex systems. Think ERP, server farms, building or construction projects.

Agile methodology is a sound choice for small projects, certain software development projects (quick to market), or web-based design; and with the proper mindset, firms can successfully implement Agile solutions. It’s still not great for systems that don’t allow for backwards movement.

But–in all of the conversations I’ve been having with various consultants and business analysts–they tend to say that waterfall is the methodology of choice for the larger complex systems that are being developed and deployed by their firms today.

A Hybrid Methodology for Business Problem Solving

Then, there’s a hybrid methodology, which is a system that is not as rigid as the Waterfall method, and not nearly as malleable as in Agile. I find it describes my daily problem solving system.

As a manager, it is my job to motivate individuals, inspire team members to achieve our group goals, and be accountable to the results of the business. It is also helpful when one needs to be focused on increasingly larger goals as set by my corporate leadership and to ensure my team’s adoption of those goals.

Waterfall is too rigorous for my current needs, and Agile has it’s limitations (pdf), but when it comes right down to it, I incorporate many of the processes of both methodologies into my daily routine. As such, I believe it is imperative to follow the “standard” stages when moving through a problem solving life cycle as in the systems development life cycle; BUT–in certain situations–it is also important to revisit and revise these stages periodically to verify success. If these stages have not been successful, then it is time to realign the current action plan and revisit previous stages.

  1. Determine goals! - write them down
  2. Determine the requirements for assessing the system - write them down
  3. Assess the state of the system against the requirements - logical and methodical
  4. Design a plan to attack the problem.
  5. Implement plan (Build and change behaviors)
  6. Test plan
  7. Analyze plan - objectivity and logic win!
  8. Adjust or maintain progress depending on analysis
  9. Implementation
  10. Adjust or maintain progress

How I use this daily methodology with people / technology

For example, let’s say you are asked to achieve sales goals of 10% over prior year during a recession for a key product for your firm… This may seem insurmountable to some, but I believe that with the proper problem solving skills, you can achieve your desired results.

And it starts by asking the right questions (goal setting, requirements gathering, and assessing)! By being dedicated to the process, writing down the criteria, breaking the goal into smaller pieces that can be positively impacted, implementing change, and readjusting and realigning to ensure the goal is being met, you will be able to ultimately add up the results and exceed the goal.

Most importantly, if something isn’t working or has changed, go back and revisit prior stages. Which is why I call this a hybrid approach, as it varies from the standard IT version of the SDLC. A true waterfall method would allow zero backward movement, and true Agile is not nearly as strict. I imagine most people do this in some way or another, but to be truly successful with this approach, one must follow the process (write the goals/requirements/assessments down!) and be objective when determining when to realign.

It is also important to note with being process oriented, one must also be able to adequately deal with ambiguity and challenges as they arise. Too many times, can one become paralyzed with inaction due to the “thinking” involved in the systems approach, so keep the pace.

Conclusion

Problem Solving is a Process! Structured thinking helps you look at problems in a rigorous and methodical way, which brings logic and organization to a problem with which natural thinking most certainly does not. It helps with analysis and implementation of solutions for business problems (and other problem solving situations) and can ensure that you have a good starting point where others would feel intimidated.

MindTools has a great introduction to other structured problem solving techniques.

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What is your passion?

17 January 2010 Business Logic

Lately, I’ve been thinking about “passion,” what drives people and what leads them to be successful. Everyone says that you must do something that you care deeply about, otherwise there’s no chance in being happy. Does that translate to success? I think there’s more to that equation, and it typically involves hard work, perseverance, and […]

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IT to go “strategic” in 2010

14 December 2009 Business Logic

I’m a bit surprised that this is just beginning to be a trend… but nevertheless…
A recent survey of business leaders, conducted by the Economist Intelligence Unit and commissioned by Accenture, revealed what those IT and business leaders are discussing in their closed-door budget meetings. The results hint at one thing when it comes to IT: strategy.
via […]

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Summers Predicts Job Growth by Spring

13 December 2009 Information

It should be noted that unemployment “stabilized” in November and if the trend continues, we should see the rebound starting to take place.
Lawrence H. Summers, President Obama’s top economic advisor, predicted on Sunday that by the spring the ranks of working Americans will start to grow once again.
via Summers Predicts Job Growth by Spring - NYTimes.com.
Jobs should continue […]

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Calculating Consumer Happiness at Any Price

13 December 2009 Economy

If technology and systems didn’t come so naturally, I really believe that I would have become an economist. I just find it fascinating. The “business information systems” major was such a perfect fit for my abilities, that I didn’t really think twice about selecting it when I was choosing my major at Lehigh. But, as I […]

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Sunday’s Business News

13 December 2009 Weekly Roundup

Nakheel PJSC’s possible non-payment of its Islamic bond due tomorrow will trigger defaults on two other securities, bringing the total of affected securities to $5.25 billion, bond documents show. [Bloomberg]
U.S. Commerce Secretary Touts Climate Change Policies —  Commerce Secretary Gary Locke tells delegates at the United Nations Climate Change Conference in Copenhagen that nations must stop subsidizing the […]

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Business Round Up

4 December 2009 Economy

Job Drought in U.S. May Be Near End as Temporary Help, Working Hours Surge — The worst U.S. employment slump in the post-World War II era may be about to end as companies hasten to hire temporary workers and boost hours, according to economists such as John Ryding and Zach Pandl. [Bloomberg]
G.E. Makes It Official: NBC Will […]

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