Ecosystems Begin to Rule - Customer Relationship Management

By the time you get to this chapter,I suspect you have realized that customers have become the dominant business force—so strong acontrolling presence in the business environment that I think we should make customers a new species or at least a new genus. Ecosystems are beginning to rule the business planet and they demand value chains that incorporate all the elements.

By creating ecosystems,the business model shifts

  • From the world of the corporation to the world of the customer
  • From separation of business from personal to the unification of the two—at least at an emotional and intellectual value
  • From value residing in the products produced and the services created to the customer themselves
  • From looking at the return on investment to seeing a return on customer

The business model has evolved too—from a business model where the company was the producer of goods and services to a model where the company is an aggregator of the necessary components to optimize a customer’s individual experience.

Take a look,for example,at a Microsoft acquisition reported in the New York Times on February 26,2008. Microsoft acquired Medstory,which applies artificial intelligence to medical and health info in medical journals,government documents,and the unstructured Internet through a sophisticated search engine.

Why in hell would Microsoft do that? Well,let’s do the math—in context that is. Probably addition. In 2006,they purchased (and this is the real name) Azyxxi—which is either Superman’s old nemesis or a company that makes software that retrieves and displays patient information from multiple sources,including documents,x-rays,MRIs,and ultrasound images.

Then they added (note the math reference) Medstory in 2008. Why would software company Microsoft purchase a company that retrieved medical records and another one that retrieved medical information? Microsoft doesn’t have a history of providing medical advice or physicians.

The Times article explains this “why”:
“The Medstory purchase,” said Peter Newpert,vice-president for health strategy at Microsoft,“was a first step in a broader company strategy to assemble technologies that would improve the consumer experience in health care.”

These companies and others are seeking ways to build businesses on the Internet that profit from what is called consumer-driven health care. The notion is that shifts in demographics,economics,technology,and policy will inevitably mean that individuals will want to,and be forced to,make more health care decisions themselves. Aging baby boomers,accustomed to personal choice and to technology,tend to want a say in their treatment decisions.

Now did it make some sense for Microsoft to acquire those companies? Actually,not if you leave it at that. Why health care? They already have the XBox 360,Windows 7,MSN Search,Office 2007 with 2010 on the way,CRM Dynamics 4.0 on premise and on demand,ad infinitum,and have penetrated both the personal and the work side of life. Do they need more than that?

It makes perfect sense if you are trying to create the all-encompassing environment that addresses all facets of business and everyday life. Health care attends to key portions of that personalized value chain— the individual’s approach to gaining control over a hopefully rich and long life. In other words,with the availability of comprehensive sources of information previously only seen by health professionals,ranging from the ability to find how one drug interacts with another to your direct health records to references for experts in a particular health field,an opportunity to get some control over your health issues is now extant. How it gets handled is more under your control,because you have the mechanism to get whatever information you need to do that.

Okay,before all you 1984 readers and privacy paranoiacs get up into Microsoft’s face about controlling your life and fulminate about the implications on privacy of this strategy,take a deep breath and remember a few things:

  1. Microsoft provides tools—not ankle shackles,technology tools. These actually can help you.
  2. You control your life,no one else. Not even Steve Ballmer or Larry Ellison.
  3. Use reason,not hyperventilation.

Microsoft’s acquisitions are wise moves for them because they provide a full-featured environment that aggregates the knowledge that you individually need for your health—making you want to use the one-shop-stop resources (at this phase,in principle) that are powered by Microsoft because of a powerful incentive—convenience. Aggregation is the model that’s powered by convenience.

But all that we’ve looked at to date—the back and front office integrations, the partners and vendors,the acquisitions,the customer involvement—are the elements to build a collaborative value chain that drives customer engagement. How do you build it? Who is the best at it? That’s what we’re going to answer in the next episode of “Whom Do You Trust to Handle Your Agendas?”

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