The Seven Core Principals of Digital Transformation

Digital Transformation

Digital Transformation has become a hot buzzword recently, being adopted by Microsoft as the overarching theme for their cloud based business apps and the subject of many studies from McKinsey and company, Gartner and other research firms.

I wanted to share some of our approach and lessons learned working with companies in different industries such as Insurance and Manufacturing on their digital transformation initiatives.

A transformation does not happen overnight. It is a long and sometimes painful process that to be honest, never really ends. The rate of innovation and change is increasing and new business and customer needs will constantly emerge.

Therefore, our approach is very much grounded in the concepts of agility. The right foundation built with change in mind. In such an approach, it is not always beneficial to try and document every future requirement to see how to accommodate it but to have a very strong foundation and an agile, open framework that can be easily adapted.

A good way to judge your current agility level is to perform a Digital Agility Gap test. For small, medium size and large changes business has requested in the last year, what is the gap between when the business would like to see the change made to when your organization was able to deploy? The larger the gap, the more acute the need is for a comprehensive digital transformation.

agility-gap

The following 7 core principals should drive every digital transformation initiative, large or small:

  • Business Driven. This may sound obvious but all digital initiatives need to have a business reasoning and business sponsor. Technology can be a game changer but very often, the digital channel needs to be part of an omni-channel approach. eCommerce can augment retails stores or distribution channels but will not replace them for a long while. Digital must be part of the overall business and market strategy. The new role of Chief Digital Officer is a great example for how organizations integrate the digital as a business channel with broad responsibilities and a chair at the executive table. The Digital aspect needs to be part of every major organizational strategy, not a separate one. For example: you are launching a new product, how will you design it, support the manufacturing/supply chain, market, sale and support the product using Digital means?
  • Data is King. Having enterprise information available in digital format with a single source for the truth is the absolute foundation of a digital transformation. Without “Good data” the effect of garbage in, garbage out will produce inconsistent results and systems people can’t trust. This is usually the hardest part for many companies as organizational data may be residing in many legacy systems and too intimately tied to old business applications. It also is hard work. Hard to understand and hard to put a direct ROI on. It is not glamorous and will not be visible to most people. In lieu of complete data re-architecture, most organizations start with master data management and data warehouse / operational datamarts to get around the limitations of the various systems where data is actually stored. The imperative is to know what the single source of the truth is and abstract the details through data access layer and services. The emerging area of Big Data allows capturing and processing ever larger amounts of data, especially related to customer interactions. Data flows, validation and storage needs to be looked at again with new vision into what and how data is captured, stored, processed and managed.
  • Actionable Analytics. Many organizations invested heavily in Business Intelligence and use decision support systems to run analysis and produce reports. The expanding scope of data capture and processing now allows analytics to serve as actionable triggers for real time decisions and other systems. For example, your website’s ability to make customer specific product recommendation can be a result of real time process that conducts a customer analysis and what similar customers have bought and can execute an RFM analysis to assign a tier to the customer and derive relevant offers. Marketing campaigns can target prospects based on predictive analytics etc. Closed loop analysis is critical for understanding the impact of decisions or campaigns. The ability to see the connection between an offer or search campaign and the revenue it generated is the foundation of future investment decisions.
  • Customer Centricity. One of the main drivers and benefits of the digital transformation is the ability to meet the new world of customer expectations and needs. Customers want access to information and ability to take action and interact anytime, anyplace, from any device. The new Digital Experience maps to the customer lifecycle, journey or buying flow and data is collected at every point of interaction to feed personalization, targeting and marketing. When done correctly, an intelligent user experience will improve engagement, loyalty and conversion. In designing new digital user experience, we usually recommend mapping the user interactions across all touch points and focusing on finding common needs rather than a “Persona” driven approach. Those in our experience are too generic and lead to oversimplification of the model.
  • Agility in Technology and Process. Agility is at the heart of our approach and without it you would go through a transformation every few years. It is broader than just IT and impacts many business and operational processes. Few key concepts of planning for agility:
    • De-coupling. A large part of what makes changes hard, is the intertwined nature of most IT environments. Proprietary databases, older applications without outside interfaces, hard coded database calls in code, heavily customized but dated applications, etc. The solution is to de-couple the elements and create a modular, service oriented architecture. Data should be separated from logic, services, and user interaction allowing each tier to grow and evolve without requiring complete system re-write. For example, the biggest driver of transformation in the last few years has been the user experience and the need to support users in various mobile devices. A de-coupled architecture would allow UX overhaul using the same services and backend.
    • Agile / Rapid application development. Application development needs to be able to create prototypes and test ideas on a regular basis. For that to happen, the process of definition, design, implementation and testing software has to be more responsive to business needs. Whether following Agile Methodology principles or just a more iterative version of traditional models, application development has to be able to quickly show business users what they would get, and adopt a minimal viable product approach to releasing software. An emerging model of continuous delivery allows faster, automated deployment of software when it is ready.
    • Cloud and Infrastructure agility. The emergence of cloud services is making agile environments so much easier to implement. From an infrastructure perspective, you no longer need to invest in hardware resources for your worst-case load scenario. The ability to get just as much computing resources as needed on demand and scale as needed in matter of minutes makes platforms like AWS and Azure very appealing. Many applications now offer only cloud based versions and even the large players like Microsoft and Oracle are now pressuring all customers to get on the cloud versions of their applications. The ability easily to plug a cloud application into the environment is the ideal of agility. With a common security and authentication layer, the modern corporate application landscape is comprised of many different cloud applications being available to each user based on their role and integrated to a degree that makes the user experience as seamless as possible.
    • In addition to the environment, software and infrastructure, organizational processes have to be more flexible too. Change management needs to become a process that enables change, not one the stops it.
  • Process Automation: with the new landscape comprised of so many different and independent application, process automation and leverages the open interfaces of application is becoming critical. Traditional Business Process Management application are now morphing into cloud orchestration and an ability to allow processes to be created across multiple applications and managed / updated by business users without IT involvement.
  • Security. Last but not least, the open, flexible nature of the future landscape we were describing here, requires new levels of security that should be an integral part of all facets of the environment. Data security and encryption. Services security, security in application design, all layers and components have to consider the rising threat of hacking, stealing data and denial of service that are more prevalent than ever. We see this as the primary concern for companies looking to adopt a more digital and agile environment and a large emphasis on risk management, security standards and audits should be a primary component of any digital transformation initiative.

Thoughts on the Future of SharePoint

In a recent event, Microsoft outlined their plans for the future of SharePoint, mostly as part of the office 365 family. It was exciting to see SharePoint coming back to the forefront. After a few years in which Microsoft plans for the product were not very clear (No on-prem future. Oh, sorry, Yes on-prem future but with Hybrid focus. Let’s call it Sites, let’s stop supporting external sites, etc.) the fog is starting to clear.

SharePoint is now being smartly positioned as the place where your office 365 experience should start. It was long positioned as such for company Intranets and users default homepage. It is a portal platform after all. It has a new responsive look and the content highlights sites you’ve recently visited or interacted with, benefits of the office Graph.

SharePoint16NewHomePage

Speaking of the Office Graph, love it or hate being tracked, it is the foundation over which all new office 365 applications are built and new API’s will allow developers to take advantage of it in building applications and should extend in the future into Dynamics 365 as well.

The new homepage is also responsive and using a new overall look and an underlying technology called the SharePoint framework. I’ll touch on all these later but let me just say it about time. Nothing made SharePoint look older and out of pace than the clunky experience on mobile. Now all spiffed up, it will offer a modern and mobile first approach throughout.

The full 2 hour presentation + demos

New Features to get excited about:

As I’ve said, it looks like all of a sudden, the flood gates are opening and after a relatively long time of minor updates, we are to expect a deluge of new things in the next few months. Here are the ones we are eagerly awaiting:

First class mobile experience + apps: some of it, like the new SharePoint homepage and iOS app, are already available. Apps for Android and Windows Mobile are coming soon.

SharePointMobileApp

As part of the new mobile first user experience overhaul, a more modern and responsive look is coming to SharePoint sites, list and libraries

Teamsite

To enable these new interfaces (which until not, required using an external JS framework like Bootstrap) Microsoft is introducing a new SharePoint framework. Built in JS and HTML5, it will support responsive design and allow for the creation of richer user experience and apps that run in the browser. Details are yet to be full released but expect it to be the MS version of the popular Angular.JS framework.

SPFramework

Office 365 Groups will be extended into SharePoint. It has long been a source of confusion as to the different types of groups and where they appear. Microsoft is working to extend the office 365 groups into Yammer and now into SharePoint, so that an office 365 group will have a team site and vice versa. IMO, it is a much better solution for storing files and collaboration than doing it though OneDrive as it is currently done. For more on groups: https://sway.com/G_yV0w-GadIB1aA2

Intelligence and analytics. A new analytics dashboard is available in central admin with much broader and visually appealing interface. Now if only this can be available to every site owner..

SPnewanalytics

https://blogs.office.com/2016/03/15/new-reporting-portal-in-the-office-365-admin-center/

Feature-packs: for on-prem customers, Microsoft will be issuing regular feature packs that will add functionality previously released for office 365.

One more thing we are excited about is the upcoming release of Dynamics 365 and the promised common data model and services across all 365 environments. That will allow new levels of integration and automation of processes across the o365 platform from end to end.

Can’t wait!

dragon

Digital Insurance – The Myth of the Online Buyer

The insurance industry is currently dealing with digital disruption, and by disruption I’m talking about the change in the consumer and the consumer habits, what I call The New Face of Insurance.

The myth that the insurance consumer is not ready for the digital world must be dispelled. According to The surprising facts about who shops online and on mobile (Business Insider 2015):

  • One in four shoppers is actually over the age of 55
  • Millennials make up the largest portion of online shoppers in terms of dollars spent and yet they earn the least

According to Gartner, 43% of our industry revenue will come directly from digital markets by 2020. Now think about that in our current captive and broker world.

LIMRA says that:

  • 74% of insurance customers want to do research online, educate themselves before they even think about talking to an agent
  • 25% of those people will even buy online, right there and then
  • Sadly, that’s really not available in our industry

We went from captive agents to independent agents and now we’re moving to more of a I-want-to-be-my-own-agent.

An example of this would be a UK company by the name of Beagle Street. They’re attacking the old ways that we do things, attacking the old financial advisers. And what they’re saying is “come and buy online.” So how do we go with this?

Digital Strategy and Digital Footprint website redesign. It’s way more than that. It’s about continually evolving to make it easier for consumers to do business with you. You need to go where your consumers are – you can no longer expect your consumers to come to you.

It’s looking at multi-channel distribution; embracing your agents, embracing online, and embracing the education that people are looking for. Just think about the customer service improvements t by being able to reach out to them through social media when there is a catastrophe.

We’ve been invited to speak on this topic at insurance conferences a lot recently, and we’ve done a short video as well. If you’d like to learn more, contact us.

What’s new in SharePoint 2016

SharePoint 2016 is finally here and we wanted to share some of the highlights. There are a few major improvements over SharePoint 2013, and some caveats to watch out for.

General Direction:

Microsoft has good reason to want everyone to get on the Office365 cloud bandwagon:

  • No more upgrade cycle
  • Ongoing fixes and improvements
  • Integration with other Microsoft tools
  • And of course, per user monthly subscription revenue

In reality, we see two hurdles for a large number of companies waiting to get onto the cloud version – the ability to control your environment, and having your data  at someone else’s mercy – not everyone is comfortable with either of these.

SharePoint 2016 is aimed at exactly this audience and provides 3 major areas of improvement:

  1. Catch-up with many platform improvements released to the cloud in the last 3 years
  2. Improvements in hybrid environment support, allowing companies that have some cloud footprint and legacy on-prem farm a way to provide a more seamless user experience
  3. Mobile friendly user interface
  4. Improved encryption standards

The full list of new features from Microsoft

Key features worth highlighting:

Hybrid environment support:

hybrid

While the Hybrid option does officially exist in SP2013 it has quite a few limitations that made it difficult to use. SharePoint 2016 adds the ability to follow SharePoint Server and SharePoint Online sites, and see them consolidated in a single list. Users will now have a single profile in Office 365, where all of their profile information is stored (although it is not a 2 way sync).

Most importantly, search can now include both on-prem and Office 365 sites.

Microsoft’s view is still assuming Office 365 is your primary environment and the on-prem is legacy that has to be supported for now, but these new features make a hybrid solution much better for users.

Mobile user interface:

mobile

A new and improved mobile interface is a very welcome upgrade. While it is not a completely responsive experience, the OOTB use is much better and can be more easily customized using Bootstrap to be responsive.

Improved Security

SharePoint 2016 now supports TLS 1.2 by default. SP13 required TLS1.0 to work properly and we have many customers who wanted to turn that off but could not. https://technet.microsoft.com/en-us/library/mt346121(v=office.16).aspx#encrypted

 Deprecated features

A few important notes about deprecated features:

  • There is no longer a free version. The WSS/Foundation free version has been around for a very long time and enabled small companies or teams to use SharePoint for free. There will not be an equivalent for SP16 so companies that currently use SP Foundation will need to migrate either to a Standard version of SP16 or to office 365.
  • Some 3rd party integrations will no longer be available. The SAP module (Duet) will not be supported. SalesForce also has shared with us that they have no intention of upgrading their SP2013 integration. They clearly see the direction Microsoft is taking in moving everyone to the cloud and do not see a future in supporting future on-prem installs.
  • Excel services will require an online office server in order to work.
  • Lastly, the seldom used Notes and Tags are formally gone.

Final thoughts

Microsoft is very clear about SP16 being a transitional product in the path towards cloud. It will support customers who are not yet ready to make the leap but will emphasize the hybrid options. More and more capabilities will start to depend on the cloud (like Excel services) and 3rd parties will stop supporting the on-prem installation. The future is clearly in the cloud so if you are on an older on-prem version and thinking about an upgrade, check the cloud version first and only if it is not a viable option for your organization consider the on-prem/hybrid options.

Productivity-for-PR

You can rescue a failing IT project

If you work in the IT world, you’ve probably seen projects that have come off the rails and require a major course correction to get back on track. In this blog post, I will highlight the warning signs of a failing project from a recent client, along with the process we follow to get critical initiatives back on track.

Danger ahead!

This client was replacing an important legacy system as part of a long-term modernization program. The project had been in danger from the start:

  • High IT team turnover rate led to new hires that didn’t know the business
  • No strong project management on the team
  • Selected this project to initiate an Agile development approach
  • No Product Owner to represent the needs of the business

After two years only one major module had been delivered and the updated project timeline was three times longer than the original schedule. The alarming and unexpected extension of the timeline was the motivation our client needed to contact Edgewater for help.

Project Assessment

Our first step was to conduct an assessment of the project to better understand:

  • Major risks
  • Staffing and capabilities
  • The estimation approach
  • User involvement
  • Agile adoption

In this case, the findings clearly indicated a project at a high risk of failure.

Recommendations

Given the determination of “high risk”, Edgewater recommended some bold changes:

  • Establishing a realistic project schedule with achievable milestones
  • Hiring a full-time Product Owner to lead the requirements effort and build the backlog
  • Doubling the size of the IT development team to increase productivity and reduce the timeline
  • Using a blended team of full-time resources and consultants
  • Adding a full-time Project Manager/Scrum Master to lead the Agile development team, keep the project on schedule, and provide reporting to senior management

Initial results

After the first six months, the results are very promising:Productivity-for-PR

  • The project timeline has been cut in half
  • The development team has increased productivity by over 50% and has delivered modules on schedule
  • The requirements backlog has doubled
  • The client IT team is learning best practices so they will be able to support and enhance the system on their own
  • The Project Manager is mentoring the team on Agile roles and responsibilities, and managing the development team

Our client is extremely happy with the productivity improvements, and the users are excited to work on this project.  There’s still a long way to go, but the project rescue has been a success.

To learn more, watch our video then contact kparks@edgewater.com.

bittercube-products

Lean Manufacturing in Practice – Bittercube

bittercube-productsIn this blog series, I’m showcasing products manufactured in my home state of Wisconsin. In addition to sharing some fun facts about the various companies and their products, I’ll be highlighting the Lean Manufacturing Principles that are best exhibited at each respective organization. These principles are derived from the Japanese manufacturing industry and center on making obvious what adds value while reducing waste muda. The six Lean Manufacturing Principles are: 1) Workplace safety, order, and cleanliness 2) Just in Time (JIT) production 3) Six Sigma quality 4) Empowered Teams 5) Visual Management 6) Pursuit of Perfection.

A cocktail renaissance has swept across the country, inspiring a new fascination with the ingredients, techniques, and traditions that make the American cocktail so special. The use of bitters, liquor that is flavored with the pungent taste of plant extracts, has been gaining popularity over the past decade. Originally developed for medicinal and digestive purposes, bitters now serve mainly as cocktail flavorings. The alcohol functions as a solvent for botanical extracts as well as a preservative.

Milwaukee has contributed to this cocktail renaissance with the help of Bittercube. Founded by Nicholas Kosevich and Ira Koplowitz in 2009, Bittercube handcrafts eight varieties of artisanal bitters, using only naturally sourced ingredients. By happenstance, the operations are run from the location that Foamation once occupied. Milwaukee was perceived as an untapped market with room to grow. Also, the low cost of operating expenses allow for maximum revenue generation.

Henry Ford created the first all-inclusive manufacturing strategy. However, it was Eiji Toyoda, a Japanese engineer, who after analyzing Ford’s methods, improved upon them by keeping an eye out for waste. Waste (or muda in Japanese) refers to any kind of wasted motion, effort or materials in the manufacturing process. Toyoda popularized the concept of Reducing Waste, which has become a basic tenet of Lean Manufacturing and falls under the principle of Pursuit of Perfection.

The objective of Lean is that every step must add value and be waste-free. A non-value added, or wasteful activity is one that neither adds value to the customer nor provides a competitive advantage to the organization.  Some non-value added activities include waiting and inappropriate processing. Waste can also take a tangible form, such as idle raw material or defects. Although transportation is an important aspect of the manufacturing process, it is a non-value added activity, as it adds to cost but not to value. It should be noted that some non-value adding activities like accounting and regulations are important and cannot be avoided.

Lean-manufacturing-bwThe continuous Pursuit of Perfection encompasses the idea that one must always strive to eliminate waste in the organization, while constantly making improvements, even if those improvements are small and incremental.  Improving processes results in reducing or eliminating variation, and improving the process flow or speed. Learning and consistent measures for improvement should be part of all processes if an organization intends on growing.

Bittercube has reduced waste by improving on their processes. In the past, they used a generic, high-density plastic container to process the bitters. There was no way to remove the botanical material after the batch was processed, other than to climb into the container and physically remove it by hand. Although this left the person who cleaned the container smelling of cinnamon, cloves, and vanilla, it wasted time and did not add value to the process. They have since updated to a custom-built processing/cooking tank with a bottom compartment where botanical material can easily be removed and cleaned.

Bittercube previously used generic boxes that weren’t cost efficient to ship. They have since opted for custom-made boxes with dimensions that maximize the number of bottles in each box, thus reducing wasted space and shipping costs.

Lean supports the notion that nothing should be wasted and a use must be found for everything. Bittercube has also reduced tangible/physical waste by reusing and recycling the processed materials. Instead of discarding the used botanicals, Bittercute has begun composting these materials. The finer botanical sediment will be reused in other products, such as an ingredient for Purple Door Ice Cream.

Autumn is upon us! Try this seasonal Maple Old Fashioned recipe!

2 oz. Johnny Drum Private Stock Bourbon, Fat .25oz. Maple Syrup, a dash of Jamaican #2 Bitters, a dash of Bittercube Bolivar Bitters, Garnish: Fat orange peel

To view other recipes and product offerings, visit Bittercube.

To read more about bitters, visit The History of Bitters

For more information on Lean Manufacturing see: Lean Waste Stream by Marc Jensen, Lean Enterprise: A Synergistic Approach to Minimizing Waste by William A. Levinson and Raymond A. Rerick, and Learning to See: Value Stream Mapping to Create Value and Eliminate MUDA by Mike Rother and John Shook

RHA blog cover

Ranzal Healthcare Analytics (RHA) Productivity Management Overview

In this brief demo, you’ll see how to leverage your interactive dashboard to drill down by department, by pay period, by job code, by employee, by any productivity metric you gather, to support and enhance your day-to-day labor management activities.

Cheesehead Logo_TRANS_200wide

Lean Manufacturing in Practice – Foamation

HiResLogoOriginal

In this blog series I will be showcasing products manufactured in my home state of Wisconsin. In addition to sharing some fun facts about the various companies and their products, I’ll be highlighting the Lean Manufacturing Principles that are best exhibited at each respective organization. These principles are derived from the Japanese manufacturing industry and center on making obvious what adds value while reducing waste muda. The six Lean Manufacturing Principles are: 1) Workplace safety, order, and cleanliness 2) Just in Time (JIT) production 3) Six Sigma quality 4) Empowered Teams 5) Visual Management 6) Pursuit of Perfection.

When you tell someone that you’re from Wisconsin, it’s almost certain that you’ll be associated will be the iconic Cheesehead® hat, worn by devoted Green Bay Packer fans. In the mid-1980’s the term “cheesehead” started being used to describe Wisconsinites at baseball games. Rather than be insulted by this term, Ralph Bruno, founder and owner of Foamation, decided to embrace and reappropriate the concept. He cut up his mother’s couch, and the first foam Cheesehead hat was born. For nearly thirty years, Foamation has been producing Cheesehead hats (along with a wide array of foam merchandise). If you placed Cheesehead hats back to back, they would stretch across America and into the sea!

Although the Cheesehead hat still leads in sales (especially during football season), this company continues to add new items to their product offerings, along with fulfilling high quantities of custom orders. “Even though we’re associated (not officially, but in some consumer’s minds) with the Green Bay Packers, you don’t have to like the Packers to like our brand. What other fun, goofy, silly thing can we do?” stated Production Manager, Mario Busalacchi. Should you already own a Cheesehead hat, you could purchase other headgear or accoutrement, such as: a baseball hat, cowboy hat, hanging dice, tie, bad-call brick, fireman hat, or ice cream hat in chocolate, strawberry, or mint chip.

Lean ManufacturingThe factory floor is the core of any manufacturing company, but a lean factory alone does not make a lean enterprise. There are also other functions that support manufacturing and contribute to the Lean Pursuit of Perfection. Design Engineering falls under this general category and includes the following attributes: Designing for Manufacturability (DFM), Being Reasonable about Critical Parameters, Having Knowledge of Logistics and the Need for Standardization, Driving New Product Design from Marketplace Needs, and Shortening the Design Process all while considering the Voice of the Customer (VOC).  (For more on VOC, see: Critical to Quality Trees, Kano Analysis, and Customer Segmentation.)

Lean companies include the customer in new product decisions so as to avoid wasting design efforts on an undesired product that will flop. In order to embody the Pursuit of Perfection principle, companies must constantly strive for improvement with an anti-waste mindset and understand that the organization exists primarily to provide value to its customers.

Foamation pursues perfection by constantly evolving and enhancing their products based on customer feedback. Through online analytics, social media, and general observations, this company identifies opportunities and sets the development process in motion. Foamation discovered that there were opportunities to better serve women and children by producing products geared toward their preferences.  Women who would rather not wear a foam hat, now have the option of showing off their brand loyalty through other products such as Cheesehead earrings, and children now have the option of wearing a smaller version of the Cheesehead hat.

Foamation is also aware of the importance of technology in their customers’ lives. They are Driving New Product Design from Marketplace Needs by offering NFCheese key chains and necklaces that have Near Field Communication tags embedded within the foam. With this Radio Frequency Identification (RFID) technology, fans can converge their digitally enhanced Cheesehead product with their mobile device.

Here’s to a great season…Go Packers!

To view all of the Cheesehead products, visit Cheesehead.com.

For more information on Lean Manufacturing see: Learning to See by Mike Rother and John Shook, published by The Lean Enterprise Institute (www.lean.org), The Lean Turnaround by Art Byrne, and Creating a Kaizen Culture by Jon Miller, Mike Wroblewski, and Jaime Villafuerte.

Project Management Methodology

Projects are like a box of chocolates

How many of us remember the famous quote from Forrest Gump, “Life is like a box of chocolates. You never know what you’re gonna get.”? Being assigned a project is a little like that box of chocolates – you never know what you are getting until you take that first bite. A project is like taking that first bite of chocolate – unique, but having enough similarities to fit inside the chocolate box.

  • How do you determine the best methodology when you start a project?
  • Do you have a PMO that dictates the methodology?
  • Are you in a company that has adopted Agile as its methodology?
  • Are you using Waterfall?
  • Or, as the project manager, do you have the authority to determine the best methodology for the project based on its assigned team, scope, timeline and cost?

Like that box of chocolates, each project might be unique, but it still needs to work within an agreed upon methodology that is flexible enough to support small to large, complex projects. If the methodology cannot handle the flexibility, it needs to be re-evaluated to support all project types within the organization.

Create a project methodology that supports all project types by defining the critical project artifacts for each project type (e.g., small, medium, large). At the end of the project, perform an analysis of the project and determine what worked \ did not work, and adjust the project artifacts to suit the project.

How?

  1. Determine the methodology framework – Agile, Waterfall, WaterScrumFall (blend of Agile & Waterfall).
  2. Define what artifacts are needed for each project type – then map the processes using a tool such as Visio and share the process with others.
  3. Projects are more than producing documentation because that is what the PMO dictates – involve and evolve your PMO to a strategic partner.
  4. Provide feedback to continuously improve the process.

Projects are like those chocolates. We can savor each project’s unique flavor and make each a success if we follow a standardized approach that can also flex to support the uniqueness of each project. The approach should be like the chocolate box, able to accommodate each unique shape within a larger, coherent framework. Our job is to understand the uniqueness of the chocolate while appreciate the box in which it sits.

customer segmentation

Voice of the Customer – Customer Segmentation

When it comes to predicting customer behavior, historical sales data may contain critical clues. Who are repeat customers for a product or service? Have all segments of the target customers been identified? Segmentation is used to divide customers into groups based on their demographics, attitudes, or buying behaviors and target the specific groups with a message that will best resonate with them. The more you know about a customer, the easier it is to predict their behavior.

During this season of prediction making, you may want to consider playing the popular German game of Bleigießen “lead pouring,” in which your future is foretold through lead shapes. A spoon with a small amount of lead is held over a flame until the lead melts. The melted lead is then quickly poured into a bowl of water. Upon contact with water, the lead solidifies and forms a unique shape. The shape of the cooled lead is then compared to a list of meanings.

You might not have any control over shape formation (i.e. fish “Fisch” = luck “Glück” vs. cross “Kreuz” = death “Tod”), or what personal changes will manifest in 2015, but one area in which you may have some control is in increasing your company’s profitability. By implementing Customer Segmentation, a Voice of the Customer tool within Six Sigma methodology, you’re able to zero in on target customers who create the highest value and ultimately increase your profitability and bottom line.

What Does it Do?

Customer Segmentation identifies and focuses on subgroups of customers who create the highest value and prioritizes efforts to allocate appropriate marketing resources. Companies oftentimes neglect or miss opportunities because they treat all customers as bringing equal value or fail to understand the economic, descriptive, and attitudinal criteria of their core business.

Segmentation criteria can include:

  • Economic (revenue, frequency of purchase, loyalty, company size, etc.)
  • Descriptive (geographic location, demographics, industry)
  • Attitudinal (price, service, value)

The following Bleigießen examples exhibit segmentation criteria:

Customer segmentationShape 1. Ring “Ringe” = Marriage “Hochzeit”

Customers can be segmented demographically by marriage status (single, married, divorced). Married couples often have distinctly different purchasing behaviors compared to single consumers. This can relate to purchases such as cars, financial products, or holiday entertainment. For example, travel agencies would not offer similar holiday packages for bachelors and married couples.

customer segmentationShape 2. Mouse “Maus” = to be thrifty / economical “sparsam sein”

Customers can be segmented by purchasing power or behavior. These customers could be segmented demographically through social class (lower, middle, upper). Social class is a term linked to education, tradition, income (low, medium, high) and parenting. Alternatively, customers could be segmented attitudinally through values or lifestyle (conservative, economical, trendy). If your target customer is upper class, marketing via coupons will be a waste of time for a group indifferent to saving a few dollars.

customer segmentationShape 3. Bell “Glocke” / Egg “Ei” = Birth announcement “Ankündigung einer Geburt”

Customers can be segmented demographically through family size (couple only, small family, large family) and family lifecycle (young married no kids, married young kids). Customers can also be segmented attitudinally through needs or motivations (convenience, value, safety). If you’re considering entering new markets/regions and your target customers are children, you may want to avoid certain European countries, such as Spain, where there are 1.4 children per female.

How to Do It:

  • Identify the product or service being analyzed
  • Brainstorm to identify customers
  • Identify segmentation characteristics
  • Develop profiles of the segments
  • When gathering information, include members from each segment
  • Document results
Product/Services (Output) Customers Potential Segments
BleigließenGame  US Customers West Coast
East Coast
European Customers Western Europe
Eastern Europe

 Benefits of Tool:

  • Understanding customer segments and segment behavior can help tailor marketing and sales strategies
  • Reach profitability goals by demoting customers who don’t generate value
  • Formalizing segment profiles provides a common language

For related blogs that cover additional VOC tools: