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Standardization vs. Personalization - Where do you draw the line of equilibrium?

In my previous blog, we identified the drivers causing a continuous tug of war, for an enterprise, between standardizing the business operations and IT assets AND meet the consumer's demand for an increasingly personalized product experience. However, with the realities today being limited resources, fast evolving technology and convergence of a multi-vendor marketplace, organizations, in order to survive and accelerate, need to redraw the boundaries to answer questions like
  • What should be standardized?
  • How much should be customized?
  • Where should we begin?

While cost of investment and time-to-market are essential drivers towards answering these questions, the problem statement is defined by the OUTCOME - an outcome that allows businesses to simplify operations and remain flexible and agile enough to meet customer demands.

A new consumerism is emerging - one that demands shared experiences. In hunting for the new order of things therefore, it is necessary to start and evolve with the new digitally equipped customer. The essential questions which organizations are asking themselves have changed from ones based on cost to those based on customer engagement and customer equity.

  • How would the standardization of a system / function affect my customer's experience with products / services?
  • How would standardization of a system / function affect the way in which my customers interact with me?
  • How would standardization of a system / function affect the way my customers talk about me?

Let's understand this better with the help of an example of a business selling personal computers with a high degree of configurability to retail customers via online and telephonic channels; with a promise of fast and free delivery and best in class after sales support.

  • For some functions like payroll, corporate finance etc., standardization solution may be a platform which incorporates industry's best practices.
  • For functions like portal payment systems, customer relationship management etc. a standardized solution is an absolute NO GO as these have a direct impact on the customer's experience.
  • Functions like supply chain logistics, maintenance outsourcing etc. have partial impacts on the business value proposition and standardization must ensure that the processes and handoffs built-in warrant minimal / no negative impact to the customer's experience. 

All in all, the closer a system / function is to the end users in a value chain; the lesser will be the degree of standardization. However, it is a tightrope walk to draw out the line of equilibrium mapping the correct path. But, as the line gets drawn out, it will decide between the businesses those will succeed and those which will fade into oblivion.

With low investments, fast returns and low risks being the minimum expectations for any large scale transformation, the line of equilibrium, in actuality, is the critical path to success.

Comments

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