The Importance of Customer Experience in Product Strategy

December 4, 2010


Customer Experience is a vital element of product development strategy that is often over-looked or under-appreciated. Traditionally, product strategy begins with capturing customer requirements usually in terms of product features or attributes. This is then translated into functional requirements or capabilities that the product must deliver. Customer experience is only captured as an after-thought, and when a product is put through the customer journey, it reveals many deficiencies that call for a product re-design and, consequently, a delay in time-to-market.

A product development strategy must be designed to deliver a compelling set of customer/user experiences rather than a collection of product features and attributes. Customer experience must therefore be factored in at the very outset of product design.

Customer experiences do not occur in product or functional silos. An end-to-end approach comprehending machine and human interactions is key to understanding customer experience.

Delivering a “superior experience” begins with

  • Designing the right offers and experiences for the right customers
  • Developing, measuring, and delivering a total customer experience that enhances customer satisfaction
  • Understanding the needs that drive customers to create interactions

It’s the journey, not the destination! A customer journey maps the experience through the lens of the customer. It helps us identify:

  • Customer lifecycle stages
  • Customer needs within each lifecycle stage
  • Key touch points where a company brand/product ‘touches’ and serves its customers
  • Usecases which determine how the customer will use the product
  • Challenges and hurdles for creating a satisfying customer experience
  • Opportunities to ‘engage’ with the customer, and innovate & improve the customer experience

A customer journey must be addressed as a process map that examines concatenated processes. In the early stages, a product strategy must be designed to deliver a set of target customer experiences. The product design must be iterated and validated by examining how the processes that constitute the customer journey actually work at each step. We must walk through the journey and understand what’s working and not working from a customer perspective.

Continuous improvement in customer experience can be enabled via

  • a disciplined & pragmatic approach that correlates user experience to customer needs, usecases, product functionality, and brand strategy
  • a systematic framework leveraging value realization methodology (e.g. Infosys’s VRM) in conjunction with lean six-sigma principles to improve and optimize speed & efficiency, remove root causes of customer experience ‘defects’,  and minimize variability in processes
  • designing for target customer experiences and monitoring via quantifiable metrics to manage the customer journey and continuously improve the total customer experience across multiple channels and touch-points throughout the customer lifecycle.

It is thus important to weave a clear customer experience strategy into the fabric of the organization’s product development strategy, especially in the B2C domain. This can be a significant enabler to improving a product’s competitive positioning and lifecycle, the company brand, and customer loyalty.

Note: This article was originally published by the author at the Infosys Global Engineering Blog where you can find exciting new ideas on how you can improve your business via product innovation and engineering.


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Microsoft and Google put mobile computing within ARM’s reach

July 28, 2010

SUMMARY:

Microsoft (NASDAQ:MSFT) has realized that a strong play on the ARM platform is necessary moving forward especially in perspective of the competitive threat of the Google+ARM platform that has manifested strongly in smartphones and tablet devices.

Microsoft and ARM announced a new architecture licensing agreement that underscores the importance of ARM’s architecture on the Windows roadmap and perhaps heralds the game-changing arrival of the era of Windows+ARM based mobile computing and gaming platforms.

ANALYSIS

The convergence between mobile devices and classic desktop/laptop computing devices is resulting in new opportunities in a host of portable consumer devices such as E-readers, Tablets, gaming, media phones, and navigation devices.

While it indulged in the ARM space for smartphones where it failed to get sufficient traction, Microsoft did not see a compelling need to pursue an alternate platform for mobile computing since the WINTEL (Windows + Intel (NASDAQ:INTC)) platform had a stronghold in this sector.

Many prominent portable consumer devices however have now embraced ARM as the platform for such emerging devices. Notable examples include:

ARM’s Cortex A8 and Cortex A9 (with multi-core processing capabilities) platforms at ≥1GHz are cost competitive and more power efficient, and offer a compelling alternative to Intel’s processors for these emerging portable consumer device platforms.

Google (NASDAQ:GOOG), who has challenged Microsoft with new paradigms and business models, has sided with the ARM platform for its thrust into smartphones with its Android OS. This ARM+Android mobile platform has gained momentum among smartphone OEMs incl. Motorola (NYSE:MOT), Samsung, Sony Ericsson, HTC (TPE:2498), LGE, Dell, Acer, etc. that has translated into significant market share gain within smartphones.

Google is aggressively mounting a similar campaign to address the world of tablets, smartbooks, and netbooks leveraging the ARM hardware platform via its Android OS and the Chrome OS platforms.

Google’s royalty-free OS model combined with the cost and power advantage of high-performance ARM processors makes a potent combination that threatens the WINTEL alliance from extending its dominance into the smartbook/tablet/e-reader space. For example,  notable players from the PC camp including Dell, Acer, Lenovo, Asus, Samsung, LGE etc. have chosen to introduce Android+ARM based tablets.

Most of these emerging consumer computing devices are ‘communication devices’ that have built in modems. As these devices become mass market plays, cost and power reduction will increasingly drive integrated (applications + modem) processors where ARM-based players Qualcomm (NASDAQ:QCOM), ST-Ericsson, Marvell, Renesas, etc. are well-positioned relative to X86 players (Intel, AMD (NYSE:AMD), VIA).

Microsoft has thus realized that a strong play on the ARM platform is necessary moving forward.

This announcement underscores the importance of ARM’s architecture on the Windows roadmap and perhaps heralds the game-changing arrival of the era of Windows+ARM based mobile computing and gaming devices. The proactive engagement will enable Microsoft to stay in sync with ARM’s roadmap and optimize their leading-edge Windows smartphone and Windows embedded OS platforms with corresponding leading-edge ARM-based products.

One thing is clear. ARM is the winner as Google, Microsoft, Nokia, Samsung, Qualcomm etc. are doing the heavy lifting, and even Apple (with its ARM based A4 chip that is the foundation of its new iPad and iPhone 4) is doing its share.

Note: There’s more valuable insight on smartphones and new wireless frontiers at http://emblazeworld.com/ in the Resources section


Renesas promises a renaissance in the mobile space

July 25, 2010

 
With its $200M purchase of Nokia’s wireless modem business, Renesas has made a chess move that is clearly challenging market leader Qualcomm (NASDAQ:QCOM) in the 3G space, as the 3G handset market rapidly grows from ~30% in 2009 (out of 1.15Bu)  to a projected 55% (out of 1.5Bu) in 2010. The more immediate threat is perhaps to current Nokia suppliers ST-Ericsson, Broadcom (NASDAQ:BRCM), TI, and Infineon.

The deal, expected to close in the fourth quarter of 2010, is for Nokia’s wireless modem technologies for LTE, HSPA+ and GSM standards. As part of the deal, Nokia will transfer around 1,100 R&D employees to Renesas.

This daring move, especially in the face of recent exits by high profile chipset players from the wireless modem business, affirms Renesas’s commitment to being a full wireless systems platform provider.

Renesas Electronics, founded only recently (April-2010) from the merger of Renesas Technology and NEC Electronics (TYO:6723), is expected to become the world’s third largest semiconductor supplier based on combined revenue. Its scale and breadth of embedded products provide the foundation to be a formidable global wireless platform provider.

Here are some implications of the announced deal.


FOR NOKIA
  • Unshackles Nokia and removes internal barriers to sign up with any standard chipset offering
  • Reduces R&D costs and allows Nokia to refocus R&D on core value-added Apps/Services and User Interface/User Experience related activities
  • Strategic alliance that gives access to advanced modem technologies for HSPA+/LTE
  • Increases supplier base for wireless modems

FOR RENESAS
  • Gives immediate access to robust, proven technology for a relatively modest price, that would otherwise have been prohibitively expensive and long-drawn to build from ground up.
  • Provides access to critical IP from Nokia, strengthening its competitive positioning
  • Positions Renesas as one of few strong players to offer a complete mobile broadband platform – Application Processors, Basebands, Integrated SoCs, Power Management, RF Transceivers, and Power Amplifiers.
  • Access to a key customer, and potentially rapid ramp up in volumes globally beyond their traditional Japanese market.
  • Positions Renesas as a key alternate source for Nokia’s high-tier smartphone platform awarded to ST-Ericcson (U8500).
  • Positions Renesas for a significant play in a broad array of wireless embedded device markets in smartphones and beyond (ereaders, gaming, personal navigation, smartbooks, tablets, netbooks, etc.)

FOR OTHER WIRELESS CHIPSET SUPPLIERS
  • It lowers entry barriers to QCOM, BRCM, IFX within Nokia
  • It brings in a strong 3G modem chipset supplier, threatening the dominance and growth of currrent leaders, Qualcomm and ST-Ericsson
  • With its SH-Mobile S-series applications processor, Reneasas increases competitive pressure in the smartphone processor domain, and especially in the integrated applications+baseband SoC space (where it has considerable experience with the SH Mobile G-series) that includes Qualcomm, ST-Ericsson, Marvell, and Broadcom.
  • It ups the ante for standalone Applications processor players to build/acquire modem technology and/or look aggressively at new embedded device markets beyond smartphones.

In summary, Renesas Electronics promises a “renaissance” in the mobile platform space, that is sure to have ripple effects in the wireless semiconductor space.

★★★ There’s more valuable insight on smartphones and new wireless frontiers at http://emblazeworld.com/ in the Resources section



The Power of Nokia Money

January 19, 2010

With the rapid growth of data centric smartphones and embedded broadband consumer devices (netbooks, smartbooks, e-readers, mediaphones, etc.), it is clear that the future of wireless is in intelligent web-centric connected devices, applications, and managed services.

Battered by decreasing margins in its handset business, aggressive competitors (e.g. Samsung) nipping at its market share, and intensified competition by disruptive new entrants (Apple, RIM, Google, HTC) in the growing and profitable smartphone segment, Nokia is fighting to regain its innovative edge and find a niche in applications, services, and markets where they will have a sustained competitive advantage and profitable revenue growth.

The one mobile frontier that has shown a lot of promise but has hardly gained momentum is mobile commerce or m-banking. Rather than technical gaps, the most challenging hurdles remain around business issues.

NOKIA MONEY, a new mobile financial service that offers consumers access to basic financial services via mobile devices, is poised to be that silver bullet which transforms Nokia into a revenue generating juggernaut over the long run.

It promises to give a boost to mobile-commerce via NFC (near-field communications), that has long been touted as the technology that will bring about a profound impact on the payment transaction world.


NFC PRIMER

Near Field Communication (NFC) is a standards based wireless communication technology (ISO/IEC 18092 and ECMA-340) allowing two devices to communicate over a short distance of less than 10 cm. The technology is an extension of the ISO 14443 contactless card standard, RFID, that combines the interface of an ISO 7816 smartcard and an RFID reader into a single device. The ubiquitous nature of mobile phones makes these the ideal device to place NFC chip technology.

NFC-enabled mobile handsets can communicate with the present ISO 14443 contactless cards and readers. The mobile handset becomes the subscriber’s key for authorizing payments, accessing services and getting information from their immediate environment. This makes the NFC-enabled handset compatible with existing contactless infrastructure as used in public transport and payment applications.

NFC has major advantages over other wireless technologies:

  1. Its short range provides a degree of security: the user can establish a connection between two devices by simply bringing them together, versus a more complex pairing process (e.g. Bluetooth).
  2. An NFC enabled mobile handset adds the advantage of user interaction (via a display and keypad) and an internet connection. This enables applications like payments, ticket services, access control and loyalty programs

NFC has three main operational use cases:

  1. Contactless reader/writer (e.g. read NFC tags)
  2. Contactless card emulation (e.g. electronic wallets, ticketing services, payments)
  3. P2P or Peer-to-peer mode (e.g. data/payment exchange between two devices)


CHALLENGES WITH NFC DEPLOYMENT

Rather than technical gaps, the most challenging hurdles remain around business issues.

Some of the key business challenges are:

  1. Too many players in the value chain seeking dominance
    — For example, non-cooperation between telcos and banks has been an impediment to mobile banking
  2. Banks/credit card institutions want control
    — For example, credit card companies desire to certify devices, readers, and financial applications
  3. Regulatory/anti-trust hurdles
    — For example, telcos cannot function as financial institutions in certain markets

NFC Ecosystem and the relationships between the key players. (Source: GSM Association) CLICK TO ENLARGE


WHY IS NOKIA MONEY PROMISING?

With NOKIA MONEY, Nokia calls the shots….and promises to provide the momentum to mobile commerce in mass markets that has largely been elusive.

Here’s why…

►Nokia has a large footprint in emerging markets (e.g. over 70% in India).

► Nokia can thus build an m-commerce ecosystem with little competition (from Apple, RIM, SAMSUNG,  etc.) in emerging markets

► Nokia could make a significant headway in introducing m-commerce before other e-payment methods reach mass markets. Credit card penetration in emerging markets is still very small. Also, cell phone penetration is far greater (and increasing even more rapidly) in comparison with desktop computers and laptops.

►Nokia can provide ‘certified’ reader technology embedded within the handset – thus promoting per-to-peer transactions between handsets. This removes the obstacle of credit card institutions certifying readers as is the case for POS credit card transactions.

►Nokia Money gives Nokia influence over the value chain (see diagram above)
– HANDSET: Nokia is the OEM
– TSM:  OBOPAY (in which Nokia has an investment stake)
– APPLICATION OWNER:  For peer-to-peer transactions, Nokia can be the application provider on both the handset and the reader, thus removing dependencies on many 3rd parties

►Emerging markets are mostly ‘retail markets’ (consumer driven) as opposed to ‘operator driven markets’ characteristic of the western world (NA, EU, Japan, etc.). Nokia is thus not at the mercy of TELCOs, and has greater control over the definition and design of handset features.

► There are no regulatory hurdles in emerging markets – Nokia can bypass banks and financial institutions to create its own financial services brand.

►Pre-paid is king in emerging markets. A pre-paid SIM card in a handset can thus act as “cash in an m-wallet”. Merchants can accept m-commerce transactions on their handset readers instantly as credits/top-off to their SIM cards.

►Micro-transactions are the norm in emerging markets. The financial risk posed by security breaches are thus mitigated relative to situations involving large-dollar value transactions.

►Nokia possesses significant security expertise within the handset and significant brand recognition in emerging markets. This plays well into its long term strategy of strengthening its “trusted and reliable handset company” image.

►With a stake in OBOPAY, their chosen TSM (Trusted Service Manager) partner, Nokia gets the cake and eats it too (little transactional costs passed on to banks)

 

►In some emerging markets such as India, banks and telcos are set to push mobile banking and m-commerce, and have agreed on a revenue sharing model to roll out mobile banking. This will only enhance the momentum for NOKIA MONEY, as Nokia will be a central player in enabling m-commerce in this market. The Unique Identification Authority of India (UIDAI) is working on an aggressive plan to issue unique IDs to mobilize m-banking. While individual banks and mobile companies would initially work to create closed networks of m-banking systems, UIDAI and the National Payments Corporation of India (NPCI) aim to mobilize interbanking capabilities by 2011.

In summary, NOKIA MONEY could indeed be that profitable revenue machine which transforms Nokia into a formidable services provider it has long yearned for. The question then is — how well will Nokia execute?

★★★ There’s more valuable insight on smartphones and new wireless frontiers at http://emblazeworld.com/ in the Resources section (see whitepapers)


What’s your smart (phone) call?

August 21, 2009

Smartphones are poised to be the fastest growing handset segment in the coming years, rising from 14% of global handset shipments in 2008 (Ref 1) to a projected 32% in 2010 (Ref 2).

Further, smartphones command higher ASPs (average selling price) on the order of US$350 (2008)  signaling higher revenue and profitability potential for handset OEMs. This has heightened the intensity of competition among handset makers.

Historically, handsets have evolved more as ‘fat modems’ where application processing and modem communication were all handled on the same chip. On the other hand, application centric devices such as PCs, gaming devices etc. evolved as standalone devices based on discrete applications processors. Connectivity was added on via discrete connectivity modules.

While data speed does impact user experience, application and related services offer many dimensions to differentiate personalization and user experience, thus leading to higher ARPU over voice centric services.

The two worlds are set to collide to create converged devices with vast possibilities (Refs 3 and 4). It also means non-traditional wireless players whose core competency is more on the applications side will enter the fray. For example, Intel is pushing its application processor, Atom, from Netbooks down into Smartphones (Ref. 3). On the other hand, Qualcomm has just announced it is targeting its integrated application and baseband processor, Snapdragon, at Smartbooks (Ref 4).

CRITICAL QUESTION  – DISCRETE vs. INTEGRATED PROCESSORS?

The handset designer is now confronted with a daunting choice – the use of a discrete applications processor in conjunction with a discrete baseband processor versus an integrated SoC that combines an applications processor with a baseband processor in a single chip.

Product management and handset designers need to evaluate the trade-offs in reaching an appropriate decision. Here are some key trade-offs that influence the decision process:

Discrete vs. Integrated Smartphone Components

Discrete vs. Integrated Smartphone Components

Neither is a silver bullet.

Both have a rightful place and will jostle with each other to dominate this growing segment.

The choice however can have significant implications on product and business competitiveness via such dimensions as system cost, time-to-market, power consumption, flexibility to spin out devices for different communication standards, performance maximization, harmonization of user experience, device form factor (via PCB size & component count) and component supply chain management.

REFERENCES

Ref. 1:  ABI Research – Smartphone and OS markets (Q1-2008)
Ref. 2:  Qualcomm- Evolving Wireless Services (Jan, 2009)
Ref. 3: Sharp unwraps ‘world first’ Intel Atom phone
Ref. 4: Qualcomm Enters Intel Territory

★★★ There’s more valuable insight on smartphones and new wireless frontiers at http://emblazeworld.com/ in the Resources section (see whitepapers)


Embedded Wireless Consumer Devices – Catch the Wave !!

June 25, 2009

Embedded wireless broadband is a tremendous growth opportunity in the consumer electronics (CE) space such as laptops, netbooks, digital cameras, e-book readers, gaming, portable navigation, and other devices.

Embedded wireless provides network operators the opportunity of maximizing revenues and profits via the efficient use of network capacity and spectrum assets, and potential revenue sharing from applications and services. At the same time, device OEMs can innovate to open up vast possibilities in the consumer electronics space in ways never imagined before.

More importantly, network operators now have an opportunity to leverage their core competencies and transform themselves from staid bandwidth providers to solutions/managed service providers who help companies leverage embedded wireless to foster innovation & differentiation in new markets, promote new business models, and enhance revenue opportunities ….much like IBM transformed itself from a pure hardware and software player to a solutions and managed services provider.

But many hurdles have to be overcome before embedded wireless can be mainstream in consumer electronic devices. New players, new devices, and new market dynamics will call for creative business models different from the traditional handset business model.  The challenges may be categorized into seven key areas.

Key Challenges for Embedded Wireless Consumer Devices

Key Challenges for Embedded Wireless Consumer Devices

1. Lower entry barriers for OEMs

  • Easy wireless integration by OEM with minimal BoM (bill-of-materials) impact
  • Easy device provisionability with minimal burden on OEM
  • Easy device upgradeability
  • Easy integration into IT infrastructure and back office systems
  • Expedient Testing & Certification – Simplified and efficient

2. Win-win business model between OEMs and Operators

  • Clear OEM/Operator business strategy
  • Clearly identified target market(s) and ROI
  • Clearly understood impact on current business model
  • What are the strategic competitive advantages?

3. Device design targeted for well-defined user experience

  • Specific device type (Data-only versus Voice+Data) targeted at well defined application/user experience at optimal cost
  • Ergonomic accessibility features
  • Features for enhanced user experience
  • Content, multimedia & graphics, page length, and download times optimized for specific device and user experience
  • Upgradeability – Device renewability, OTA upgradeability, Content portability

4. Application, Content, and VAS developer ecosystem

  • Win-Win business model between Application/VAS providers and OEMs
  • Developer-friendly environment incl. a standardized ‘open’ application development platform, and easy access to SDK, device simulator, and toolkits
  • A centralized App store (either through OEM or through the Operator) to distribute the applications
  • Expedient Application Testing & Certification

5. Efficient device deployment

  • Out-of-the-box flexible provisionability – Pre-provisioned, or simple 1-step on-line post-provisioning
  • An ‘Open network access’ model where any device can operate on any network.
  • Traditional distribution channels must be empowered to distribute easily

6. Simplified business model for consumers

  • Straightforward, simple, and compelling value proposition – centered on enhanced user experience and customer ownership
  • Targeted at lower total COO
  • Customized business model (versus one-size fits all)

7. Compelling end-user experience

  • Enhanced convenience, mobility, productivity, and user experience.
  • Built on familiar usage patterns
  • Easy out-of-box experience (Learn, Pre-loaded applications & content, provisioning/activation)
  • Enhanced operational (normal) usability experience – Overall ease of operation, accessibility, performance & responsiveness, battery life, reliability, peripheral connectivity to other devices
  • Superior aftermarket service – Customer service, Accessories
  • Availability of content, where applicable

Embedded wireless heralds a paradigm shift and a new revolution in consumer electronics.The new embedded wireless device world will provide opportunities for all players in the mobile ecosystem – Operators, Device OEMs, Application/VAS developers, System Integrators, Module providers, and Chipset providers.

2009 is the Year for Embedded Wireless. Beyond consumer devices, embedded wireless is finding its way into new domains – M2M communications, smart grid or smart meter technologies (energy conservation), and wireless medical devices (remote health monitoring).

This is a new frontier and it calls for new ideas and fresh perspectives. Many Operators (AT&T, Sprint, T-Mobile, etc.),  OEMs, and consumer electronics companies have created separate divisions, un-shackled from their old ways of doing business, to address this emerging segment.

The opportunity is NOW! Are you ready?

★★★ There’s more info & insight on how you can penetrate the embedded wireless space at http://emblazeworld.com/ in the Resources section (see whitepapers)