A business framework for the Omnichannel era: The Customer Machine.

Porter's Value-Chain - 1985 (wikipedia)

In 1985, Michael Porter popularized the now-famous concept of a business "value-chain".  This quickly became the 'go to' framework for strategic planning, org design, and process improvement.  The term has since contributed to the development of revolutionary approaches to process improvement including value stream mapping and 'lean' methodology.   Quite extraordinary really.  Again, 1985....

Ok great. But...

Since then the telephone was detached from the wall, then put into pockets.  Telephone books practically disappeared.  Print novels have been replaced by e-books -- Amazon's e-book sales have now exceeded their print book sales.  For that matter, what about Amazon? -- since 1985, the Internet, as we know it, was invented.

The world is a very different place.  In 1985 who could have imagined that, by 2013, we could instantly (and simultaneously) voice-call, video-call, chat, sms, process payments, and view digital content on pocket computers (attached to our mobile telephones, connceted to this ubiquitous network of content, media, and society -- called the internet)?

Current-day: there is only *one* thing static anymore, the customer himself/herself (and even they're on the go).

It's time we update the framework a bit.  Enter "The Customer Machine."

The Customer Machine (TM) - 2013

Where the traditional "value-chain" model is focused on the idea of individual and disconnected functional areas adding value to products, "the customer machine" is about adding value to customer experiences through *content*, via all channels. The role of content is to connect customers to products, and marketers to customers. The traditional value chain is often depicted as a series of silos flowing one-way, while the customer machine is about fluid, dynamic, reactive functional areas.  It is about meeting customer expectations and shifting the focus to outcomes, rather outputs.  E.g. is social media about tweeting and facebook likes, or is it about learning which products to place at the front of your retail isle this week, then next week, etc (more on outputs vs. outcomes in my next post).

In the customer machine, Production (or Merchandising) and Logistics are the legs of our customer-centric business.  It goes without saying, that if you don't have products (/services) in-stock (/available) for your customers, you don't have a leg to stand on.

In this customer-centric business, IT is absolutely everywhere.  It is the glue that pulls everything together.  In this business, IT is not seen as a constraint, rather, it's embraced as the enabler.  It is the backbone of your omnichannel business.

The "head" in our customer machine model, is Marketing.  This is because marketing listens to customers via the "insights" they're able to glean, and with the help of the IT enablers, vendor partners, and channels, they respond.  IT and Marketing become the central nervous system of our customer-centric business.  They enable our limbs to move -- i.e. they provide instruction on what the customer needs are.

Our channels, virtual or physical, become extensions (and only extensions) of our core business and our core brand.  They *are not* businesses in-and-of themselves.  They enable the business to reach customers and the customers to reach the business.  Their sole purpose is to connect customers to products (the legs) and to marketers (the brain).  This is why channels must be flexible to customer needs, not the other way around.  The customer-centric business also recognizes that customers don't stop at channel boundaries.  The channels are modeled in such a way that they can seemlessly "hand-off" transactions and experiences, mid-journey.

Finally -- Content.  The lifeblood of a customer-centric business.  Content is the heart of the organization.  In today's day and age, customers go where the content is.  A strong content curation, production and distribution strategy can make-or-break most B2C businesses.  It's time to think about content as being as important as the product or service that it serves to promote.  Think about how content can be repurposed across channels, used by marketing on campaigns and promos, and potentially even used by logistics and merchandising to validate/purchase/monitor merchandise.

Content is the heart --  IT is the backbone -- Marketing is the head.

These are your firm's critical organs, make them work and your channel integration efforts will quickly fall into place.