Managing the Enterprise Customer Relationship
(Part 2) by
This is the second article in the series "Managing the Enterprise
Customer Relationship," where we discuss how managed service providers (MSPs)
can effectively manage complex customer relationships while delivering
solutions to the enterprise customer. In the previous article, we
highlighted the importance of resource alignment in managing the
customer's whole experience. In this article, we present "Four Quadrants
of the Relationship" to illustrate the dynamics of the resources involved.
Four Quadrants of the Relationship
There are four distinct quadrants that a managed
services provider must be aware of in managing the enterprise customer
The following communications patterns are typical of
the 4 quadrants:
Horizontal communications are good based on a
relationship of trust, developed over time
Vertical communications through the "power-line"
are sporadic, reactive and only occur when there is a problem
Diagonal communications are nonexistent
This communication behavior has implications in all
Quadrant 1: The business manager doesn't truly
understand the value that is being delivered by the MSP. They only hear
reference to the MSP when there is a service problem. When it comes time
to reduce expenses, they are hard pressed to justify the line item
representing the cost of the MSP. Meanwhile, their internal organization
"bids" on the project indicating that they can do it more cost
Quadrant 2: The Sales Representative has
little to no insight into how the company is "truly" leveraging the
product, the benefits that are being realized, the issues being
experienced by those using the product and the value being delivered by
the "service organization."
Quadrant 3: The customer's end-users and
technical contacts play a key role in the effective use and performance of
the MSP's service. They are also key in shaping the business manager's
perception of the MSP. However, the only time that they discuss the MSP is
when there is a problem. They don't discuss all the great things that the
MSP has done on a day-in / day-out basis.
Quadrant 4: Customer Service / Technical
Support typically observe that "all things are well with the customer."
This impression, which can often be false, is created because the
customer's end-users maintain a courteous working relationship with the
MSP's service personnel, to make sure that they can continue to "get
things done" when they really need to.
All Quadrants: When a significant business
disrupting problem occurs (which it WILL), the customer's end-user remains
calm, cool and collected when speaking with the MSP's service team. The
service team doesn't find it necessary to escalate awareness of the
"incident" to the MSP's Sales Representative or Senior Management because
they don't understand the level of impact being experienced by the
customer. Because the customer's business "is" being significantly
impacted the business manager is engaged, becomes irate, and calls the
MSP's Sales Representative and/or senior management, neither of whom is
aware of the incident "in progress."
The end result is total (yet avoidable)
embarrassment, lost credibility and a bunch of people resembling a deer in
the headlights. MSP - Put your suit on…It is time to go meet with the
customer and "fall on your sword."
Recognizing the quadrants and the dynamics at play
between them will help you properly align your resources to manage the
customer's whole experience. In the next article, we will discuss the role
of the Account Team in managing the enterprise customer relationship. If
you would like to learn more about overcoming the common challenges that
managed service providers face with their enterprise customers, feel free
to contact us.
View previous articles in this series
A Logistics Perspective (Part 4):
More Strategies for Becoming -- and Remaining -- a Preferred Supplier
Becoming, and remaining, a preferred supplier is an
important strategic advantage over competitors. In the previous
article in this series, we discussed two strategies intended to
help achieve and maintain preferred supplier status. In this
edition, we present two more strategies.
Strategy 3 – Audit Your
When you consider the major business
processes involved in supply (characterized by some as Plan-to-Position,
Purchase-to-Pay, and Order-to-Cash) it's important to know that, despite
the particular way your company is organized and operates, these processes
already exist. They are common to you and your competitors and link to the
corresponding processes of your customers and your suppliers. What's at
issue is how well they are designed, managed and executed and what other
factors may be present that facilitate or impede performance. The purpose
of the audit is to address these issues.
Thankfully, there are various tools
available to accomplish the audit. In addition to the templates and
analytical process decomposition techniques that improve visibility into
an enterprise's actual detail processes there are compendia of "Best
Practices" that depict what they should be and how they should link that
include descriptions of corresponding inputs, outputs and enabling
factors. On top of this, they also identify appropriate performance
metrics. All of this provides numerous opportunities for consultants like
me to analyze "as-is" supply operations and create road maps for a "to-be"
state that efficiently and effectively embraces best practices and
increases customer delivery value.
Advantages of this strategy include
greater objectivity, a clearer focus on strengths and weaknesses, and a
comprehensive view of your supply processes. Additionally, I have always
found the analytical exercises themselves to be tremendously valuable as
an education for the process owners. They invariably emerge more as
knowledgeable and effective implementers and managers of the "to-be's".
Another nice feature in this approach
is the ability to meaningfully benchmark your firm's performance with
others since with best practices you measure consistently designed
processes with common metrics. With some external support you can know how
your operation stacks up to your competition and where your relative
strengths and weaknesses lie.
Strategy 4 – Work with Your
We talked in the previous installment
about talking to your customer to identify his supply-related priorities
and the perceived strengths and weaknesses in your company's performance
as they relate to them (Strategy 1). Now let's take a look at some of the
improvement opportunities that open up when you consider changing the
whole supply equation. There are a growing variety of methodologies that
deliver direct, measurable benefits that are readily identifiable by all
involved parties, including your customer. Some of the better known are
vendor-managed inventory, scan-based trading and rapid replenishment.
Others are process improvements that enable, rather than deliver,
benefits. This type includes CPFR and rapid/accelerated planning.
These are just a few examples and they
all deserve a separate article in this newsletter just to describe how
they are applied to increase supply value. Whether the measurable benefits
lie in cost reduction or sales increases or both, the key is the value is
linked to a tighter relationship between your company and your customer.
To summarize, in this and the previous
newsletter, we have enumerated several approaches to improving your
customer's perception of your service. Not surprisingly, better
communications lies at the heart of most. I regret that due to the normal
restrictions articles of this type face, we couldn't more thoroughly
explore the specific opportunity examples identified in adopting these
If you would like more information, I
encourage you to contact us. In the next, and final, chapter of this
article I will point out some of the more common pitfalls incurred in
striving for Preferred Supplier status without proper motivation, planning
View previous articles in this series.