The Trust Channel

Title

The Postal Service can continue to evolve and operate more like a private-sector business.” ~ Megan J. Brennan, New Postmaster’s Goal: Act Like Private Sector, WSJ.com

Trust – Postal Service’s Greatest Asset

For centuries postal services in every country across the globe have aimed to serve the people by being the trusted guardians of the written word. From innocent sentiments of a child for Santa in North Pole to private, legally binding documents of multi-billion dollar conglomerates, the Postal Service has dutifully transported and delivered messages.

Although times have changed, our need for a trusted channel to communicate has not.

In fact, the need for Trust Channel has only multiplied as new technological methods of communications like Twitter, Gmail, Facebook and even LinkedIn have come into existence. These multi-billion dollar giants of communications are trusted by people from all walks of life, each one attempting to demonstrate their worth, originality, ideas, thoughts and, on occasion, dissatisfaction… all things that make us human.

These channels play on our fundamental need “To Belong” within a virtual world that attempts to expound voices of billions of people. Nothing wrong with this at all except when more than one person speaks at the same time, it becomes extremely noisy in real-time digital communication.

Inter-human communications, as we all know, is far more complex than the latest trending topic on many social media networks.

Now more than ever, there is a fundamental need to be ‘heard’ …not by the mass of invisible crowds but by the few you would like to address, privately without third party monitoring of your communications for monetary gains.

And the only entity that can still fulfill this need for private and trusted communications between people and businesses is the Postal Service.

Conflict – To make Money or Serve the People

Neither the need for a trusted, private communication channel; nor the benefits of advanced technological communications can be fundamentally denied. They are both equally important to modern communications.

Yet these two concepts remain mortal enemies in today’s digital world.

Why?

One problem is ‘Data’. Data, it seems, is the source of golden nuggets that must be mined for intelligence to make money. And, there is nothing wrong with this at all. Twitter, Gmail, Hotmail, Facebook, LinkedIn and many other communication entities attempt to gather data, buy and sell data, mine data, add to data, statistically manipulate data, react to data or otherwise use it to make money. Without data, social media networks would not be worth billions.

So what can reconcile the delicate balance between the need for private, trusted communications between people and the need to use technological communications to make/save money?

Only an entity that does not have a required obligation of pleasing its investors and at the same time serve the fundamental need for private and trusted communications between citizens can fulfill this need.

This balance can only be achieved if an entity is mandated to serve the people first and the market needs second while sustaining the strength of people’s trust.

Can the answer to this paradox still be Postal Services?

Opportunity – Industries that Serve People

Need for private and trusted communications that is not intervened by third party monitoring is paramount in today’s technologically advanced world. Electronic communications is no longer private in any form. The only security measures holding back intervention in individual communications is the sheer volume of data available and, of course, whether the information gleaned from the data is really worth any money. Sometimes the effort is worth it but in most cases finding the golden nugget has been extremely costly.

But this is no guarantee of privacy or trust in electronic communications. It seems to be more luck of the draw than secure, trusted communication channel.

So where in the marketplace is private and trusted channel of communication still required:

Financial Services

Banks and its customers (business and consumers) require a means to communicate highly private and secure information on a daily basis in real-time. From discussion about which account number to use to what amount of money needs to be transacted to which billing account number to debit…are all highly sensitive information that require private, trusted and secure communication channel.

Medical Services

Individual medical records are private and should be private between physician and the patient. Only a secure and private communication channel can ensure that this remain such.

Legal Services

Legal records are also private unless they are legally required to be disclosed. Once again a need for private exchange of information is necessary to ensure that trust is reinforced between the legal system and the people.

Identity Services

The records of your existence are private and trust-bound. These records should remain yours and any communications associated with these records should remain within the control of the holder of identity—you.

For the longest time Postal Services have handled these documents and records within the security of its Trusted Channel. And the practice still continues worldwide.

Evolution – Innovation in Trust

Imagine the Evolution of The Trust Channel.

What if it was no longer necessary to worry about privacy and security when instructing your financial advisor about your decision on financial management through a secure email?

What if you could view your medical records online with absolute knowledge that no one but you and your doctor knows your medical conditions? What if you know which doctor has access to your records and you own the ability to block them if you don’t trust them or their judgment?

What if you and your lawyer can discuss your pending legal matter without worrying about privacy?

What if you and your government have a private and trusted channel to communicate about your passport renewal?

What if….

Fact is that there is absolutely no other entity out there today that can own and manage The Trust Channel other than an evolved Postal Service without compromising itself on the alter of privacy invasion for the purpose of making money. Only a service with a clear mandate to first serve the people and not the money can do this job.

Even if a new innovative, entrepreneurial company builds a super secure and private communications technology to be used for Trust Communications, it will eventually become part of a private enterprise that wants to make money from your private information. Case in point, PasswordBox being acquired by Intel’s Safe Identity Organization. PasswordBox was a great company with approximately 14 million downloads and as Intel evolves the technology to integrate it into its own solutions, it would be interesting to see how data is used.

Actions – Re-Modelling the Business of Postal Services

Postal Services are no strangers to innovation and risk-taking as they have been addressing the issue of shipping and delivery for centuries. Well before Amazon’s drone delivery services, Postal Service was experimenting with human-powered drone services. Here is a picture of Autogyro from 1930s piloted by John Miller demonstrating shuttle mail delivery to Washington D.C.

Autogyro

Source: Library of Congress

Perhaps, it is time to rejuvenate the spirit of innovation once more and re-consider how Postal Service business model should serve the people and businesses. The opportunity does not solely include mail delivery and parcels, it spans into meeting the need for trusted, private and secure communications for foundational businesses and people across the globe.

As USPS has already demonstrated, Postal Services should partner with the private sector, enable new communication technologies, address the problems of modern retailers, and rebuild the foundation of The Trust Channel once again.

Private sector technology and government entities should not be enemies.

We are not enemies, but friends. We must not be enemies. Though passion may have strained, it must not break bonds of affection. The mystic chords of memory will swell when again touched, as surely they will be, by the better angels of our nature.
~ Abraham Lincoln

There is no perfect business model or solution for modernization of Postal Services but it is worth searching for one to keep the trust of the people.

The answer may be found in balancing two extreme principles that at first seem to be mortal enemies in digital world:

making profits vs. serving the people.

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OPEN WRX Consulting Inc. is committed to helping companies improve competitiveness through effective decision making by applying strategy to tech solutions, building plans that create value and sharing knowledge that drives innovation.

openwrxconsulting.com

 

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ReEvolution of IT: Why CIOs should Own Digital Future

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As products evolve to contain more and more digital components, the skills, experiences and best practices of IT become crucial for success of product development in a digital world. by Patrick Meehan and Tomas Nielsen

Owning the Digital Future

I remember when this IBM commercial first came out in mid 2000’s.  I was very excited about how technology would change everyday life forever. Unfortunately, RFID required large investment in infrastructure and couldn’t connect products with customers from end to end. And so it failed to complete its true promise of connectivity.  Majority of the retailers could not invest in the technology at the scale required. Instead RFID became an instrument of back room inventory and logistics management along with improved operational efficiencies on manufacturing floor. But it did not deliver the promise of “The Future Market”. 

The good news is that today many companies are re-creating “The Future Market” with their own products.  Once again, a new generation of inventors are building a world where products can talk to people through phones, websites and connect throughout the lifecycle. This time digital products or digital components are being developed by both grassroots inventors and product teams in large enterprises everywhere. Finally, the promise of “Digital Future” has value that is driving action and engagement.

Now is the time for CIOs to re-evaluate how IT can add value to the product portfolio by enabling digital products and components to create strategic, long term benefits for customers and company.

Why

Driving Strategy

CIOs have an opportunity to drive business strategy by building functional products that will generate revenue, brand value, customer experience, and valuable customer data.  Objectives may vary based on industry, regulatory environment, customer needs, etc.  But enabling a digital product is a long-term business strategy that can help grow value for customer and company.

CIOs and IT have tech knowledge and methodologies that are indispensable for long term evolution of the company’s product portfolio.  The processes for System Development Life Cycle (SDLC) and Product Design are similar in that the competency can be easily transferred from one to the other. (Source: Gartner, 2014)

SDLC-Prod Des

Table

The most important gap that exists between IT and New Product Development is business strategy. The business strategy for new products can include understanding target customer, product lifecycle relative to target market, having a measure of market size, pricing, sales, marketing and customer experience just to name a few.  Having an understanding of these important product concepts can allow IT to better transition from the tech side to the business side.

Architecture

IT has the competency to integrate digital products with existing platforms within the company to ensure ongoing service management, upgrades, error correction, etc. IT no longer has to be a back room activity that drives a company’s competitive advantage without directly connecting to the customer.  They can take initiative to ensure that they own the long term vision of product digitization for the company and integrate systems to create one customer experience, one perspective of customer relationship and one representation of customer activities.

Governance and Strategic Partnerships

CIOs already manage governance of information across the enterprise. Adding digital products to the mix will be like adding a new program to governance portfolio.  IT already has the policies, processes, ownership and compliance structure defined and enforced as part of existing governance process for all technologies. Digitized products will simply be an addition to the existing structure with new business owners, policies, processes and compliance reviews. It is important to note that as you change your portfolio, flexibility in governance policies is important. A strategic mindset always aims to explore new options and new ways of accomplishing objectives. 

Another important aspect of governance is building strategic partnerships that can enable higher value for the company and customer through digital products. CIOs and IT have long been working with tech partners and have the know-how to start a symbiotic relationship that can be beneficial to both parties. Again, adding another strategic partner is no more work than enabling a new set of business objectives via contractual relationship. 

Data Capture and Analytics

The greatest strategic advantage digital products offer is data. CIOs can drive a comprehensive information strategy that can not only continue to inform future product development but also marketing, operations, human capital and future strategies. Data is the core of why products should be digitized. Collecting information about how the customer is using the product, when they are using it, why they are using it is essential to long term digital strategy. 

When Nike first got into the data-collection game it stuck sensors to elite athletes running, jumping, spinning and generally doing those impossible things they do. The idea was that the data collected would point Nike designers and engineers toward building better shoes. It did that, but the Nike brain trust understood there was much more the data could unlock”, says Stefan Olander, VP Digital Sport at Nike. “We quickly realized that data can be applied much more broadly,” Olander says. “Why wouldn’t we take all this knowledge, all this innovation and give it back to everyone?” ~ Nike Shoe Sensors Boot Up Performance Data, Michael V. Copeland, CNBC.com.

CIOs can also append product data to other information far more effectively because they own the flow of information from channels, functions and partners. The strategy is to have direct product use data married up to central customers data thus enabling a singular view of the customer from end to end. Analytics can reveal insights about the customer that is both product specific and customer centric.

How

Envisioning Digital Business Model

CIOs should lead the effort to envision a Digital Business Model for their business. The objective of this exercise is to take the traditional business model where technology only automates and improves efficiency of existing processes and “Re-Evolves” it to identify a new value proposition.  This exercise will require team members who think in design and work in technology. But instead of thinking one product at a time, the goal is to think in a product portfolio unified with multi-product customer experience.  These will be challenging discussions that include such questions as who “owns” the product portfolio, customer information and experience. (Gartner, 2014) Given that IT will lead this discussion the owners of the strategy becomes obvious: Information Technology.

But there is another reason why IT should lead the discussion:

 To achieve economies of scale with digital business models requires the development and reuse of digitized platforms across the enterprise. Without such shared platforms, the IT units in companies implement a new solution in response to every business need, creating a spaghetti-like arrangement of systems that do meet specific customer need but are expensive and fragile – and don’t scale enterprise-wide ~ Optimizing Your Digital Business Model, MIT Sloan Management

In order to ensure Digital Business Model is envisioned as a long term strategy, a strategic planning process and roadmap activities are necessary. And creating a Digital Business Model is not only about developing digital products or components but “creating strategic positioning by performing activities differently than rivals do.”  ~Michael E. Porter, HBR.org

Nurturing Key Competencies

Beyond envisioning the Digital Future, CIOs should also consider nurturing key competencies required to enable a strategic direction.

Org

Innovation Mindset

There is an absolute need for IT organizations to evolve their culture to an innovation mindset.  This battle must be fought by all managers, business and tech, within the company. Every manager knows that “change” of any kind is generally a massive undertaking and the thought of re-thinking, re-building, re-evolving requires a brave heart in IT. Yet, this is exactly what is required when you enter the fray of a Digital Future. The word “No” should no longer be the response to “change”. CIOs must encourage the troops to close this mindset gap first and foremost.

How should this be done? Establish a change management team that creates the necessary momentum and maintains it. One of the failings of strategic effort in IT is that after the initial momentum in driving strategic change, people abandon the battle of managing change. So to enable a long term strategy, the troops must battle on, even when things are looking bleak. And giving change management the authority to help manage the tough times is more important than initially building the momentum for change.

Consulting Team

The consulting layer involves selecting or hiring a team of business consultants who ‘get’ both technology and business functions. These are the ‘sales’ managers and the ‘doers’.  CIOs must consider communications with the functions to be the greatest challenge in driving a strategic Digital Future. Gaining the support of key C-Level managers and their subordinates will drive a company wide commitment. Consultants can help manage this communications. Ideally each business consultant would have a speciality and will be the conduit to conversations across the enterprise…both strategic and tactical in nature.

IT Skills Expansion

IT organizations already have many skills that are transferable to new product development platform.  But it is always best to ensure that there are no gaps. Some gaps that may need to be filled include a pure corporate strategy, analytics and customer experience competencies. If IT is to lead the long term Digital Future of the company, having these skills within IT will be valuable. Corporate strategy role will help establish the strategic positioning of product portfolio and internal technology from a business perspective. The analytics role will assist in designing and commissioning information necessary to back the strategy. Customer experience acumen will ensure that regardless of the strategy or information, the Digital Future is serving the customers first. With these skills and the current IT organization, CIOs can’t lose in building and collaborating with the business functions to realize the promise of a “Digital Future”.

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Kiran Sohi’s career has focused on leading businesses to success by enabling strategic decision making. While my passion is strategy and technology, my work spans a number of corporate disciplines including marketing, finance and operations.

OPEN WRX Consulting Inc. is committed to helping companies improve competitiveness through effective decision making. Services include structuring, facilitating and implementing strategic planning process and strategic solutions for businesses, functional departments and/or channels.

Visit openwrxconsulting.com for more info.

Service Level Agreements: Building Long Term Partnerships

Image“Business partners are the second most significant source of new innovation for enterprises.” ~ IBM Survey, 2006

Problem

Service Level Agreements in technology can often lead to a contentious relationship between a company that needs the service and the one that provides it.

In one of my engagements I found myself in a situation where there was much anxiety between a Fortune 500 company and one of its technology partners.  Neither party was clear on how to proceed with an agreement that required management of hundreds of unique deliverables, quality of  technical service, and ongoing service level management meant to support a newly implemented system.

Nonetheless a relationship had to be forged where both parties could give and take while keeping their minds on what was best for their companies.

Effort – The Service Levels

Given the situation, I realized that I had to find a win-win solution that enabled both parties to repair their relationship and ultimately meet the needs of their individual customers. Following is an account of the approach I took to defined SLAs based on Fortune 500 companies’ business needs:

1. Defined Business Objectives: The most important piece of work I undertook was defining business objectives for this relationship.  If there was one thing that both parties (even lawyers) could agree on was that they both wanted to be successful in this long-term relationship. So business objectives for this relationship provided common grounds both parties could agree to and accept as a foundation for the relationship.

2. Collected and prioritized list of deliverables: I collected and prioritized list of hundreds of business deliverables including reports, statistical business intelligence, tools, real-time vs. batch updates, timed queries, customized features, etc. that needed to be part of the agreement. I also took time to review the importance of each individual item to ensure that it was actually necessary from a business perspective. To have a partner report on items that no one will use for business decisions is a waste of time and effort for both parties.

3. Outlined architectural service requirements: These are services required by most technology systems but they may vary based on what type of architecture is in place or the  technical service that is being provided:

Service Requirement

Definition

Examples

Availability Amount of time the service  is available for use. 99.5 % availability required between the hours of 7 am and 7pm annually, and lower availability required during remainder of the time.E-commerce operations typically have extremely aggressive SLAs at all times; 99.999% availability is common requirement for a site that generates millions of dollars of revenue an hour.
Reliability Comparison of actual availability to planned availability. Reliability is measured in Mean Time To Failure (MTTF) in days. Minimum 40 Days of reliability is required by the site per quarter.
Scheduled Downtime Expected times when service is withdrawn for maintenance or upgrade purposes. Maximum of 15 hours per month, Saturdays 12am to 3am per week
Scalability Ability to increase resources as service needs change over time (i.e. increase in volume of users) Expected increase in volume of users by 25% annually.
Performance Time it takes to load a User Interface for any system or website within a given timeframe. CRM system user interface load time is expected to be minimum 2 seconds between the times of 6am to 8pm, thereafter it is expected to be minimum 5 seconds.
Defect Rate Number or percentages of errors in deliverables or changes to the system. Production failures should be no more than 5 annually. Production failures can include automated backups, restores, coding errors/rework

4. Defined expectations for Service Level Management: This section rounded out the SLA development process to allow business managers to manage metrics on an ongoing basis. This section includes:

i.         Change Management Process for managing major changes that take more than 2-3 days to complete.

ii.         Support Ticket Process for managing any errors or user problems with the system. Note that in a newly implemented system, always expect the number of defects to be higher than after normalization of system during business as usual.

iii.         Incident Management Process ensures that if there are significant issues like unscheduled downtime, there is a clear understanding of who should be notified, what actions need to be taken to address the downtime, what resources are available during off business hours to solve the problem, etc.

iv.         Reporting Process allows business managers of the system to manage their SLAs in a systematic way. Example would be schedule of monthly meetings to review exception reports where only breaches of metrics are reviewed.

5. Align business objectives with defined SLAs to ensure business needs are being met: It is essential that all SLAs are directly related to outlined business objectives. Without this step it is possible that you will ask and pay for service you don’t need or worse not have enough services to meet the customer’s needs.

Image

Process – The Agreement

After completing service levels, I went on to create a contract with the terms to enable these levels of service.  The agreement in this case needed to ensure that both parties clearly understood why the service metrics were important. It is a fact that if Fortune 500 company was to continue to provide the service necessary to serve its customers, the technology partner must ensure that they can provide it and continue to improve it as the need changes. But if the technology company failed to provide the service necessary, there would be financial consequences.

For each service level metric breach, a percent reduction in support costs charged by technology company was negotiated. These percentages were between 2% to 5% based on the importance of the service to the business. The technology partner needed to improve their service based on the needs of the business of their client, the Fortune 500 company. And the Fortune 500 company could concentrate on serving their customers rather than rigorously managing service providers.

IMPORTANT!

The financial reductions were not meant to cripple the service provider but ensure that the service behavior remains consistent. It was therefore not necessary to stage hardball negotiations, but rather reach an agreement where the partner is gently reminded of their responsibilities.

My ultimate goal here was to set up a long-term relationship where two partners could work together to grow each other’s business. A win-win partnership for the long-term.

Deliverables

  • Business objectives of the company that requires the service
  • Service levels defined based on business objectives including direct deliverables, architectural requirement and service level management processes
  • Agreement negotiated based on importance of each service level that enabled a business objective
  • A long term partnership that is set to enable new innovations

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Kiran Sohi’s career has focused on leading companies to success by enabling effective decision-making. While her passion is strategy and technology, her work spans a number of corporate strategy disciplines including product development, process design, marketing and financial forecasting.

Prior to finding OPEN WRX Consulting, Kiran was a business consultant at CIBC and Innovapost, where her clients included Canada Post and Purolator. She also had the pleasure of working as a strategist for NBA, Kraft, Samsung and Travelex. Visit openwrxconsulting.com for more info.