Forget Users; It's External Customers That Count

Way back in 1998 when I published my book Customers.com, I began receiving fan mail from CIOs and business executives to the effect that one of my principles for success -- help customers do their jobs -- applies to internal and external customers alike. Over the years, however, I've discovered that you get into serious trouble when you focus too much on the end users of the application software you're designing and deploying. You don't want to make it easy for employees to do their jobs; you want to make it easy for external customers to do theirs. And often, the two objectives conflict.

For example, the CIO at one large manufacturing company spent 12 months streamlining processes and workflows with the active engagement of a cross-functional team of internal users. Then his team of IT staff and consultants spent another 18 months on a phased ERP deployment. The result was a successful project, except for one big catch: It failed to offer the access and flexibility that external customers demanded. They couldn't view their transactional history, custom-configure the supplies they were ordering, or make changes to orders in progress. The new ERP system was optimized to streamline the work of the internal staff, not to serve business customers well.

The error proved costly. "Now we're at least two years behind our competitors," the CIO laments. He wishes he had taken their approach: Start with customer portals to see what the buyers want, then re-engineer the company's internal processes accordingly.

What's the moral of the story? Don't rely on your internal customers to design their own applications. Of course, you'll want to involve them, but always start by driving every project from the outside in.

There are no internal-only applications anymore. Whether you're redesigning HR apps to simplify expense reporting, revamping your billing systems to be more accurate, or replacing your inventory-management system to streamline multichannel distribution, everything impacts your business customers in some way. Your job is to understand how they measure their success and then optimize your internal processes to address their current and future needs.Cemex learned this lesson well. Initially, the company penalized local contractors if they changed their scheduled delivery times. But then it switched gears, optimizing its delivery system to meet any customer's needs within an hour. By abandoning its former practice, Cemex became the world's most profitable cement supplier.

So, whose metrics are you using?

Patricia Seybold is the author of Outside Innovation (HarperCollins Publishers, 2006)