Customer Centricity: Outcomes Capabilities

Community Manager

4 years ago

This blog is part 4 of a 4-part series on transforming a product-siloed organization into a customer-centric one. In part one, we discussed Actions Capabilities, in case you missed it, you can part one, part two and part three. In this blog, we are moving on to the third capability in consideration of customer-centric decisioning, outcomes capabilities.

Pillar 4: Outcomes Capabilities

Measure your success objectively and thoroughly to create an environment of continuous learning and business strategy evolution

Simulation

In the context of strategy/model implementation., customer centricity is no exception: performing a “what-if” analysis (simulation) before deploying any changes to credit decisioning is of paramount importance to ensure no unexpected pernicious effects are produced by the new logic on the affected portfolio.
Ideally, organizations aspiring to achieve full-fledged customer centricity should have in place a solution that provides business-friendly simulation capabilities to validate decision assets such as business rules, analytic models, or complete decision strategies. Results could be analyzed relative to an isolated step in a decision process or in relation to the fully integrated decision strategy.
This simulation solution should allow users to test concurrently several alternative strategies and models or replicate alternative market conditions all within a safe environment for experimentation.
Simulation allows business users to:

Validate that their business logic produces the expected business results
Analyze results to identify risks and opportunities to improve strategies
Compare alternative strategies to see which best achieves business goals
Understand business impact before deploying new or updated strategies
Avoid costly errors in strategies that might otherwise be missed
Include simulation results to accelerate the approval process and hence reduce the time to production

Reporting

Standard MIS containing scarce – if at all - customer level metrics would result in a lack of a true measure of the potential to increase customer relationships.
Standard MIS should define customer-level metrics that summarize the depth and value of the customer to the organization. Distributions should be created to understand the number of products, the value of products, and condition of accounts.
The customer-centric risk reporting framework should provide the appropriate level of detail for all the various stakeholders within the bank to clearly understand how the business is performing against the established targets so if necessary, appropriate corrective or pre-emptive measures can be promptly adopted at any time.
Effective monitoring provides early identification and understanding of issues, opportunities, and trends, and enables rapid response by the business and therefore competitive advantage.
Management Information should be accompanied regularly with relevant commentary from a Risk Management analyst, including a brief description of the deviation encountered along with the estimated impact on portfolio performance over time and consequent recommendations. Such information substantially facilitates management decisioning and guides appropriate either pre-emptive or corrective action in an agile and timely manner.
Having the ability to automate the portfolio monitoring reporting framework generation should be imperative for a customer-centric organization. The benefits of portfolio monitoring reporting automation are abundant:

It ensures information integrity, uniformity, and consistency
Avoids time-consuming repetitive tasks that keep credit analysts away from value-added activities
It guarantees that reports are produced with the desired frequency
It improves agility by empowering business users and reducing dependence on IT

Governance / Organization

From an organizational and governance perspective strong enterprise commitment and senior sponsorship from the executive leadership team for customer centricity is imperative. A mild or “let’s see what happens” leadership approach will highly likely lead to failure.
Final ownership of customer-level models and strategies, both within and across decision areas, must be centralized.
Two governing bodies responsible for the oversight and execution of the organization’s vision of customer centricity should be established.
The first one would be primarily in charge of ensuring that the overall customer-centric business strategy is executed. Its main responsibilities would be:

Set integration strategy and priorities
Foster executive alignment to ensure a common vision between all business units, functional areas, and teams
Resolve executive-level integration issues promptly, and approve integration plans and budgets
Establish program governance
Control customer definition
Establish success metrics
Facilitate and encourage collaboration
Accelerate cross-functional learning and awareness

The second one would own responsibilities associated with the customer-centric data strategy

Assure quality, robustness, accessibility, and scalability of customer-centric data
Execute customer definition compliance
Assure accuracy, the flexibility of access, speed, and granularity of customer-level data
Qualify new data

If you are thinking to start your journey towards customer centricity, remember the old African proverb: “If you want to go fast, go alone; if you want to go far, go together.” Do not try to reinvent the customer-centric wheel. Do not hit the walls others did in the past. Give us a shout. We will be happy to travel together with you.

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Updated 4 years ago

Version 3.0

banking

collections agencies

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digital twins & simulation