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Has the Cloud Changed the Model?

While the evolution of technology has impacted, and benefited, all the value disciplines, we’ve seen the most dramatic influence in the discipline of customer intimacy.

For more than two decades the principles outlined in Michael Tracy and Fred Wiersema’s Harvard Business Review “Customer Intimacy and Other Value Disciplines” remain tried and true. However, no aspect of business has seen greater change since 1993 than technology. And while the evolution of technology has impacted, and benefited, all the value disciplines, we’ve seen the most dramatic influence in the discipline of customer intimacy – with innovations in the cloud changing the game.

The complete Harvard Business Review article can be found here. However, let’s look at one paragraph on customer intimacy and explore the cloud’s impact on the model:

“While companies pursuing operational excellence concentrate on making their operations lean and efficient, those pursuing a strategy of customer intimacy continually tailor and shape products and services to fit an increasingly fine definition of the customer. This can be expensive, but customer-intimate companies are willing to spend now to build customer loyalty for the long term. They typically look at the customer’s lifetime value to the company, not the value of any single transaction. This is why employees in these companies will do almost anything—with little regard for initial cost—to make sure that each customer gets exactly what he or she really wants. Nordstrom is one example of such a company; IBM in its heyday was another; Home Depot is a third.”

There is no doubt the use of technology to get closer to customers, meet their unique requirements, and develop lasting relationships has historically been an expensive, time-consuming process – for both the company and the customer. First, there’s the infrastructure costs of servers, software, networks, and more, which are expensive to implement. Then there are development costs, with high-priced resources and long development cycles to customize or code solutions. And finally, you need to maintain the systems and the software, which brings a hefty price tag. No wonder the cloud is revolutionary in technology as it’s dramatically cut these historical costs.

At first glance, the cloud might be more about “Operational Excellence” than “Customer Intimacy.” When it comes to the customer you have to look at what’s in the cloud. For some time, Software as a Service (SaaS) companies have been offering customers applications without all the overhead of system and programming costs. The common use of App Stores, such as by Salesforce.com, allows business users to circumvent traditional IT processes and approvals and go straight to the source to solve their needs. But what if you have a unique need or set of requirements and there isn’t an app out in the cloud that’s “prebuilt” for you? Do you need to go back to the high-cost, long-cycles model of “old?”

Coras embodies the customer intimate approach. CorasNow—our cloud-based, low-code/no-code, rapid application development platform—gives users the ability to quickly build and customize applications, without the help of developers or IT. But wait, aren’t “build” and “modify” words that describe the “old” process? Nope, not with CorasNow. CorasNow is based on visual, model-driven development. That’s the industry’s way of saying that we have a drag-and-drop, point-and-click approach to building and customizing apps – no code required.

So the cloud not only dramatically reduces infrastructure costs, it dramatically reduces development costs too – all in the name of Customer Intimacy.

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