WW W .D KL .COM
SE PT E M B E R 20 16
Cont nte 2
W W W .D K L .COM
ents ents
The Legacy Systems of the Future p.6
Mainframes Are Used Increasingly by Major Banks & Financial Institutions p.14 Next Stage in IT Evolution p.20
Open a Checking Account Today and Get… An Omni-channel Experience p.26 Starbucks Isn’t Coffee and Multi-Channel is NOT Omni-Channel p.34
3
Letter from the Editor
For the past four decades, technology and the systems that depend on it has always been viewed as machines tucked away from the human eye—hidden in server rooms on locked floors and managed by specialists who sit apart from the masses. However, in the new millennium, technology continually blurs the line between company and employee, and even more so, between company and client. The walls that used to divide and hide IT away in the dark recesses of corporate infrastructure, are now visible through devices on a global scale—offering the end user a full complement of personalized functionality and experience. And with that experience comes the new breed of infrastructure that supports it. From the security and well-being placed on clients’ information, to the speed at which clients can access their profiles and required information, there is a backbone that continually evolves to support the paradigm that is the mobile world. In this issue of DirectionIT Magazine, we have chosen to explore both sides of the IT divide: from the mainframe and its part in the future of Big Data and Mobility, to the experiences that customers receive and even expect through omni-channel engagement—all driven and delivered by the IT infrastructure that enables it. As always, we hope you enjoy the journey: from seeing behind the IT velvet curtain to understanding its function and place in the new world, to traveling the yellow brick road that is the new world of mobility—a place where site, sound, experience and social interaction deliver a wonderment we’ve never before experienced.
Allan Zander Editor-in-Chief
5
THE LEGACY SYSTEMS OF THE FUTURE THE ABSOLUTE NEED FOR MAINFRAMES WITHIN THE GLOBAL FINANCIAL SECTOR By Craig S. Mullins
Digital transformation is impacting businesses far and wide, but you could argue that none are being impacted more dramatically than banking. Over the course of the past few decades, the manner in which banks interact with their customers has changed significantly, and more changes are on the horizon.
6
W W W .D K L .COM
7
8
W W W .D K L .COM
How has banking changed?
The first bank account I had was a passbook savings account when I was very young. The bank gave me a little booklet where my banking activity was recorded. Whenever I wanted to make a deposit or a withdrawal, I took my little booklet to the bank where the teller recorded the transaction in the booklet. No booklet, no transaction. No bank today could get away with such a requirement! These days, I almost never write a check myself anymore, instead I pay my bills online through the bank’s Web portal. If I want money, I go to the ATM. And with my mobile banking app I can check my balance any time of the day or night… and even take a picture of a check to deposit it into my account. I don’t even need to give the check to the bank to deposit it. Those are substantial changes. My young self would not recognize many banking transactions today. But the transformation continues. Even the inside of the bank is being modified to enable more automated transactions. How so? Well, I usually go inside the bank to a teller to deposit larger checks. For some reason, I just cannot get used to taking a picture of a large check or just pushing it into an ATM. But banks are working to change even this relatively uncommon activity. Recently, I went into the lobby of one my bank’s local branches to deposit a check. But things had changed. There was a grandiose ATM with a bank employee there to guide people to the ATM instead of going to a teller. This seems to be working, since U.S. News & World Report’s number one banking trend for 2016 is that “fewer people will head to branches.” How does this impact IT? Of course, automated IT processes are necessary to drive the customer interfaces to the ATM and the online banking portals. All of which must be maintained and improved as new techniques arise. For example, an entirely different set of expectations and interfaces is demanded for mobile banking than for Internet banking. And likewise for Internet banking over traditional banking. But each method of interaction relies on the crown jewels of data that mostly reside on z Systems mainframe computers. So banks frequently need to deploy mainframe modernization solutions that preserve the existing mainframe heritage while exposing it to modern interfaces.
Given this shift, which banks have encouraged to reduce cost and streamline processes, a different way of interacting with their customers is required. Part of this is to make the banking experience as seamless and as simple as possible. This is done with compelling technology and features. The other part of it is to better understand customers’ needs and behavior patterns. And that requires analytics. But what is analytics? Advanced analytics is a business-focused approach, comprising techniques that help build models and simulations to create scenarios, understand realities, and predict future states. Advanced analytics utilizes data mining, predictive analytics, applied analytics, statistics, and other approaches to allow organizations to improve their business performance. Encompassing a wide range of applications, from operational applications to strategic analysis (such as customer segmentation), advanced analytics goes deeper than traditional business intelligence activities. It works on uncovering the “why” of the situation, and delivers likely outcomes. By allowing business managers to be aware of likely outcomes, advanced analytics can help to improve business decision making with an understanding of the effect those decisions may have in the near future. Analytics are often discussed in the context of big data because patterns and behaviors can be difficult to uncover when using traditional methods on large data sets. As data complexity and volumes grow, so does the cost of managing the data and building analytic models. Before real modeling can happen, organizations with large data volumes face the major challenge of getting their data into a form from which they can extract real business information. One of the most time-consuming steps of analytic development is preparing the data. In many cases, data is extracted, and a subset of this data is used to create the analytic dataset where these subsets are joined together, merged, aggregated, and transformed. Appropriate tools for extraction, transforming, and loading the data are required. As are different new data analysis and storage tools such as Spark, Hadoop, R, and others. But they all need to work in conjunction with the most important data in the bank—and that typically resides on the mainframe.
Furthermore, as the local branch becomes unnecessary, the way in which customers interact with the bank fundamentally changes. It becomes easier for customers to switch to another bank if everything can be done online. Indeed, according to Accenture Consulting’s recent North American Consumer Digital Banking Survey, millennials switch from their primary bank at a pace nearly double the average of other consumer groups; within the past 12 months, 18 percent of millennials switched their primary bank.
9
How will banking continue to change? Another significant banking trend, touted by The Financial Brand, is the “platformification” of banking. The general notion here is that banking and financial technology (FinTech) companies have many complementary points of synergy. Instead of being competitors, the predicted trend is that more banks will partner with FinTech companies to deliver a cohesive platform for banking and financial services to their customers. The goal would be to create platforms for banking in much the same way that Amazon is a platform for retail goods. For this to come to fruition, the new platform must be able to leverage banks’ legacy systems that deliver high-speed, properly secured transactions, along with the modern interfaces for mobile computing that today’s banking consumer expects. To achieve successful integration of these techniques requires new tools, skills, and technologies. In the same report from The Financial Brand, the number three trend uncovered is “Making Big Data Actionable.” Being able to not just collect and maintain large amounts of data, but also to be capable of leveraging that data to understand and better serve consumers, can be an important differentiator when trying to build new relationships or to bolster existing ones. This gets back to the need for financial institutions to improve their advanced analytics capabilities. Putting the customer at the center of everything in terms of data collection and analysis is an important step for achieving customer loyalty. A financial institution (or platform) must be able to access data about all customer interaction points (branch, website, mobile, phone). The data should be integrated and accessible for analytics to better understand the customer and deliver services that match his or her desires and requirements. But reality lags behind the need. According to a consumer banking survey conducted by NGDATA, only 20 percent of banking customers are very confident that their bank understands them. This must change to improve customer loyalty, which is needed because the same survey reports that more than 47 percent of customers are not very loyal to their existing bank. Looking a bit past the immediate year, the Accenture Consulting North American Consumer Digital Banking Survey is informative about trends that could shape the future of banking. One key point addressed by the survey is that customers see banks as transaction processors, not as providers of information or advice. The survey results indicate that “customers will expect banks to be intuitive, intelligent and individual.” To transform from transaction processor to trusted advisor requires the information that can be gleaned from advanced analytics on big data sets. Until banks can deliver on this requirement, customers will likely continue to view them just as transaction processors.
10
This transformation needs to be done with a firm understanding of the security and privacy rights that customers expect for their important financial records. The good news is that 86 percent of banking customers trust their bank to securely manage their data. But banks cannot take their eye off the ball. The level of trust that exists between banks and their customers is a big plus that needs to be maintained. As banks continue to open up their mainframe systems—traditionally well-protected and secured—to more open platforms, care must be taken to ensure that mainframe-quality, security and privacy practices continue to be deployed. And finally, an Ernst & Young study with the purpose of “Building the Bank of 2030” identified some interesting trends that somewhat fly in the face of the current trends. For example, although current trends show an increase in millennials and their reliance on newer, usually mobile technology, this study indicates that different demographics will drive the future of banking. Specifically, there will be eight billion global inhabitants that are older and more urban. That means that banks will need to be sure that they are capable of effectively serving an aging, and increasingly urban, demographic. Of course, this aligns with some of the earlier trends discussed here, such as increasing reliance on internet banking, so long as the urban area has reasonable internet connectivity.
Synopsis
Perhaps it is a trite cliché, but the only constant is change. Banks must be adaptable, with the capability to serve new customer requirements while at the same time meeting the exacting demands of the customers they have served for ages. This means finding ways to integrate the new with the tried and true. Mainframes drive the banking industry and they will continue to do so well into the future. But what mainframes are has changed too, and they will continue to morph and add new features and new technology advancements along with it. That means banks can continue to rely on the decades of investment and reams of data stored in their mainframe systems. It also means that new technologies can be married to those systems to ensure the data is accessible, optimized for quick access, and properly secured. Understanding all this can help to ensure that your bank will be prepared today and into the future to meet the challenges of modern IT systems.
W W W .D K L .COM
11
MAINFRAMES ARE USED INCREASINGLY BY MAJOR BANKS & FINANCIAL INSTITUTIONS By Bill Olders
Do you think the mainframe is dead? A dinosaur, an ancient piece of technology that has outlived its usefulness like cathode ray tubes, rotary dial telephones, and dial-up modems? I have some news for you. The mainframe has adapted: it is alive and well, with major banks and financial institutions continually growing their use of mainframes. In fact, mainframes are at the core of their technology strategies. The reason why? Mainframes deliver functionality and reliability unmatched by any other platform.
14
W W W .D K L .COM
15
WHY MAJOR BANKS AND FINANCIAL INSTITUTIONS GROW MAINFRAME USE
Here are five reasons why major banks and financial institutions continue to grow their mainframe use:
1 2 3
DELIVERS CONTINUAL UPTIME
Imagine if your bak had regular outages. With a mainframe, banks generally do not have outages—planned or unplanned. Take the example of several German banks using the mainframe continually for over six years—and no system downtime. What other platform could you use that is so reliable and that has an architecture you can conduct full hardware and software upgrades without any downtime. And, of course, for a bank’s customers, it means fast, reliable, and secure service.
LEVERAGES NEW ASSETS TO MEET GROWING MOBILE NEEDS
Mainframe systems can accommodate and adapt to meet the world’s steadily increasing financial transaction workloads. Pretty amazing when you consider the mainframe was designed and implemented 50 years before the Web, mobile devices, and devices that can be connected to the Internet (IoT). The mainframe meets the needs of customers who require instant access to financial data from anywhere, at anytime. Not only is the mainframe alive, but it is also thriving in today’s mobile and cloud-based computing environments.
SUPPLIES SUPERIOR PROCESSING POWER SUITED TO LARGE-SCALE BANKING AND FINANCE IT
Banks and financial services organizations deal with huge amounts of data, which is one of the reasons why they continue to grow their use of mainframe computing. Few systems of record can match the mainframe platform when it comes to transaction throughput and when it comes to tackling big jobs, such as handling millions of credit card transactions. Today, the mainframe is still the go-to IT platform for large-scale transaction processing.
16
W W W .D K L .COM
4 5
ACCESSES AND ANALYZES TIME-CRITICAL DATA
Nearly every major organization worldwide uses mainframe databases to support mission-critical applications. Contrary to what a lot of newer Big Data vendors will tell you, the best place to perform business analytics on mainframe transactional data is on the same platform where the data resides: on the mainframe. For that reason, many organizations in many industries—banking, healthcare, insurance, retail, manufacturing—have been running analytics on the mainframe for years. Analytics are run today on a variety of operating systems on the mainframe platform.
INTEGRATES DATA FOR MULTIPLE LINES OF BUSINESS
Some people may not realize that the mainframe runs many different operating systems—like IBM’s own z/OS, but also Linux, UNIX and Windows, among others. This makes the mainframe, especially with its reliability, robustness, and security, ideal for large organizations that must manage disparate data in different formats, using different databases, used by different business lines. There are applications available to manage all this—from IBM, as well as a number of third-party ISVs—a whole community providing additional mainframe capability all the time.
ONE REASON WHY THE MAINFRAME’S AGE GIVES IT A BAD REP
The mainframe has a bad rep because it is old and likened to the extinct dinosaur. The truth is that what we think of as “older” is not old at all. In fact, the newest mainframe system—the IBM z13s—was released in 2015. Much of the bias against mainframe technology centers on the erroneous idea that mainframes are excessively expensive and that its days are somehow numbered. For large businesses, mainframe technology is actually very cost-effective, and the basic mainframe metric, MIPS, continues to rise across its user base. Further, mainframe systems can be optimized and operating costs can be dramatically reduced for a fraction of the cost of mega ripand-replace migration projects. This applies both to those organizations running modern mainframe applications that are under constant development and maintenance, and those organizations running legacy mainframe applications. Consider these facts: Mainframes account for 68% of IT production workloads, but only 6% of IT spend. (Source: Solitaire Interglobal) Over the past five years, costs at server-intensive IT shops have gone up 65% more than those of mainframeintensive IT shops. (Source: Rubin Worldwide) Mainframe-intensive companies earn 28% more per dollar of IT infrastructure than server-intensive companies. (Source: Rubin Worldwide) Between 2005 and 2014, the ratio of mainframe MIPS to mainframe full-time equivalent employees has grown 351%. As a matter of historical significance, never in the history of IT have so many owed so much to so few, as when it comes to dedicated, long-serving mainframe employees. (Source: Gartner)
MATURING WITH AGE
Despite recurring predictions of its imminent demise, which are surprising considering its trajectory, the mainframe continues to adapt and thrive. Consider its adaptability in today’s mobile and cloud computing environment where vast amounts of computing power and storage are required.
17
THE NEXT STAGE IN IT EVOLUTION HOW TO JUSTIFY IT FINANCIAL MODELS FOR GREATEST IMPACT AND RETURN
By Jacky Hofbauer
20
W W W .D K L .COM
2 1
22
W W W .D K L .COM
The IT industry has permeated our work and personal lives for the good part of four decades, even so, it is actually an incredibly young industry by comparative standards. After all, when you consider the automotive industry for instance, now entering its second century, IT is very much in its infancy. It is this infancy that has also been a contributing factor in its evolution—an evolution solely driven and determined by the influences that have been placed on it, for example, ongoing demand, continual changes, and new features or functions added to propel the business forward. For this reason, it is no surprise that IT as an industry has also relied on mergers and acquisitions to build functionalities, acquire market shares, and to assess and predict the next stage of evolution. It is this approach that has led to inherent issues within the IT ecosystem to maintain constant evolution, including more and more outsourcing, project resource pooling, and the reality of applying cost-control measures to projects and infrastructure— all to continually rationalize productivity and ROI versus expenditure. As added pressure, the C-suite must also take best practices from older industries and apply them to the management of enterprise-quality control processes; in many instances, a square peg in a round hole scenario. During the past two decades, many IT companies have had to manage a large acquisition or merge projects to pool resources. Then many of these companies had to apply a cost-control approach or rationalize and outsource projects. In addition, IT C-level has had to take the best practices from old industries to manage their enterprise-quality processes. However, like any evolving industry, inherent sophistication can experience tremendous leaps forward, leaving behind past processes and bringing about the next stage of evolution so that everyone can profit. In this case, the evolution pertains to software management and its impact on the data center. As well, how the costs that pertain to software can be drastically reduced, while delivering a better end-user experience across the enterprise. For instance, the common practice for accounting departments is to build both short- and long-range budgets for forecasting future costs. Although how resources are categorized and allocated can be vastly different, depending on the subject matter. For example, when an IT executive creates a budget and needs to add two people to his or her group, the line items are easily categorized and added into the financial management tool, and they are easy to defend and justify.
Even so, how does one justify IT resources outside of the human element? For most, IT is highly complicated and equating the purchasing of software, hardware, etc., can be hard for a nonIT person to do. Now, if the same method is used to forecast data center capacity, maybe the CTO would be happy and validate the cost of a new application. The goal would be to conduct an annual survey asking the end user how many workloads or new applications are planned for the future. The results would then be translated in capacity metrics and loaded into a capacity-planning tool, like a financial management tool. If this tool is able to forecast the needed capacity and the software cost associated with the capacity hypotheses, then the CTO could get the cost of each individual hypothesis. Thus, a relevant budget is generated and, if the budget is insufficient, it can be renegotiated. Knowing that the budget share for software is around 75 percent of the total budget, it would be interesting to take a look at each feature as a financial manager would, looking for any tool that helps to control costs. Monthly License Charge (MLC) for the mainframe platform is the biggest part of the budget. The IBM contracts and billing methods are not easy to understand, but IBM offers many attractive options such as Parallel Sysplex License Charge (PSLC), or Country Multiplex Pricing (CMP), and incentive options such as Mobile Pricing, zCAP (z Collocated Application Pricing), Cloud Pricing or Instant Payment Pricing. The attractive options are well known and have been used for a long time; even so, customers are looking to migrate from PSLC to CMP. The incentive pricing methods have not been particularly successful. As some customers have said, “We don’t have any mobile workload,” or “We don’t know how we can tag our mobile transactions,” or “Our mobile peak consumption doesn’t occur at the global MLC peak.” Each customer is advised to manage all new options as a project, studying each method inside the enterprise, evaluating each method as it pertains to saving, and analyzing the results for cost-saving initiatives. Managing and forecasting mainframe capacity and associated software costs with the same approach as that of a financial management tool is an interesting concept. Building the annual budget for the IT data center with such a tool is a real possibility as the wording is familiar and ready to use by either the capacity planning team or the CTO.
2 3
26
W W W .D K L .COM
OPEN A CHECKING ACCOUNT TODAY AND GET…. AN OMNI-CHANNEL EXPERIENCE by Andrew Armstrong
You thought I was going to say toaster didn’t you? While the omni-channel experience may not be able to toast my morning bagel the way I like it (extra butter please), the reality is that the omni-channel experience—true and complete customer engagement—is far more valuable to all parties, the customer and company both, than the toaster. Heck, I can go to the discount store down the block and get a toaster for $20, but finding that fully interactive customer experience that makes me enjoy each and every interaction with your business is worth far more.
2 7
To be clear, I am not simply talking about multi-channel here. Multi-channel is often confused with omni-channel and that’s like comparing that $20 toaster with your high-end six-burner gas cooktop/oven with dual temperature zones and a fairly sophisticated electronic control system. Multi-channel is, quite frankly, a bland sales and marketing approach that means nothing more than marketing and selling through multiple channels. It tends to be unidirectional and lacks the interaction and customer knowledge that enables the cross-pollination of sales and marketing activities. Part of the challenge is when people talk about omni-channel they tend to think of it as something that only applies to the retail segment, such as fashion and jewelry, etc. True, these industries do tend to lead in the adoption and deployment of omni-channel infrastructure, but every interaction between any company and its clients should be seen as an opportunity for the company to further engage with the customer. Every touch is an opportunity to build a stronger relationship and increase that customer’s brand loyalty. In the fight for a share of the customer wallet, banks can and should also lead the way in the deployment of systems, tools and processes that make use of the information on hand to create a much more personalized customer experience. In fact, if you think about it, who knows more about their customers than banks (and maybe doctors, but that’s a different kind of knowledge). From shopping habits, to purchase and saving patterns, to the name of their customer’s first pet (that reminds me, I need to change a password), banks have all kinds of personal and transactional data available to truly create a personalized customer experience—one that delivers customerfocused services, products, and advice—which translates into greater wallet share and customer loyalty. The organization also benefits from an increased level of interaction with its customers, further improving its customer intelligence, as well as refining messaging and delivery systems for each and every user.
28
In the end, customers don’t really want that Toaster. What they want is to be treated as special. They want to feel like you know them, you remember them, and you value them and their business. They want products and services tailored to their needs: needs that will change over time, perhaps even from week to week. They want tools that enable them to interact with you as and when it is convenient for them. They want to be communicated with—not talked to. And they want to be communicated with in the manner that they choose, using the channel that they feel is most appropriate at that specific moment in time. And that’s where omni-channel comes in. In the past, banks focused on providing a wide variety of channel choices: think ATMs, call centers and online banking. This was effectively a multi-channel approach and was valid in that it provided a key stepping stone to the delivery of an omni-channel experience, as customers had access to their products and services as needed. But while the number of touch points increased, communications in this model are still largely unidirectional. Some back-end data is available across all platforms, but seamless integration is not. A significant portion of the learned customer “knowledge” is not shared, let alone used, across all systems to provide proactive customer services. Think of how many times you’ve received some promotional marketing piece from your financial institution offering you an increase in your credit limit. Happens fairly frequently right? But when was the last time you were offered a different credit card rewards program based on your recent past transactions? Probably hasn’t happened unless you’ve recently sat down with someone at your branch. Omni-channel is an opportunity to really understand the customer, streamline systems, and focus attention on the most profitable by analyzing the information available from different channels, building a complete and detailed personal user profile of each and every customer, while providing a consistent and seamless experience across all channels.
W W W .D K L .COM
2 9
Banks must realize their unique customer data advantage and begin to leverage that data in their customer interactions. Put another way, my bank must Know Me, Show Me You Know Me, Enable Me, and Value Me—from beginning to end, and beyond. This may sound prohibitively complex, but it isn’t. There are really only four main steps:
1 2 3 4
30
UNDERSTAND YOUR IT INFRASTRUCTURE AND ITS CAPABILITIES This is key. While a forklift of the existing system is not required, due diligence and a clear understanding of your capabilities and limitations is a must. ALIGN YOUR DATA Quality omni-channel customer engagement solutions are driven by the data available to them. If your marketing department doesn’t speak with your lending department, then perhaps there is an issue. Do your front-line staff have access to the data that might just help them become better customer service personnel by providing a much more personalized experience for each and every client? Simply put, true customer engagement requires the interaction of your systems, processes and personnel. MARKETING AUTOMATION It’s at this point that your data becomes truly useful, creating the rules and logic that capture and action data from all aspects of your customers’ life cycle and transactional habits. It’s here that you can really start to do what marketing is meant to do: influence the customer in ways never before possible. From suggestive offers, to rewards, to blurring the lines between all engagement types, marketing automation is the rules engine that makes your omni-channel customer engagement solution engine run. THE DELIVERY METHOD It’s no surprise that customers today are interacting with us in a completely different manner than they were just 10 years ago. Mobility is no longer a convenience. It is an integral part of the way we and our customers communicate, function, and interact. The younger the client, the more likely that the mobile device is their sole accessibility tool. Today, mobility drives modern transactions. This is where the term “engagement” really begins to loom large. Providing a mobile application that seamlessly delivers all things to the customer—banking, credit applications, mortgage refinancing, special offers, client notification and guidance—becomes a necessity in truly engaging customers and meeting their service expectations.
W W W .D K L .COM
And once again, it’s all about showing the customer the concept of “Know Me, Show Me You Know Me, Enable Me, and Value Me,” from beginning to end, and beyond. From an organizational perspective, once you empower an employee with customer knowledge, you’ve empowered them to truly serve the customer. You’ve evolved them from a simple employee, teller or banking officer, to being a concierge—someone able to deliver an interactive, knowledgeable and personalized experience to the customer, an experience that proves you know them, have shown you know them, have enabled them, and value them. It’s then, and only then, that you can close the full loop on your omni-channel customer engagement solution. Though this may seem like a nearly impossible task, and one that may not be possible, I can assure you that it is achievable. As long as you find the right omni-channel customer engagement solution partner to work with to implement the right steps, your vision of setting the standard in customer experiences is within your grasp. Now, if you’ll excuse me, I have to go buy a new toaster—this one just burned my bagel for the very last time.
3 1
STARBUCKS IS NOT COFFEE & MULTI-CHANNEL IS NOT OMNI-CHANNEL by Allan Zander TM
34
W W W .D K L .COM
Let’s face it, we live in a world of similarities—an easy way for us to categorize brands, items, places, and things that make sense to the general public. But at the heart of it, many of the things we interact with daily, though similar in category are, in fact, very different. Whether you read the title that I wrote for this article—whether or not you are a coffee fan—will whether you love me or whether you’re ready to call the beverage police for making such an outrageous statement. But before I’m incarcerated for my actions, let me explain. As a brand, how many people do you know automatically think of Starbucks when thinking of coffee? And please, don’t lecture me on the merits of a grande half-caf-decaf-mocha-chino-latte with a twist of Madagascar cinnamon and light foam... this is not the point! The point is, many of us don’t say let’s go grab a coffee, we say let’s go grab a Starbucks—two entirely different things. One is just coffee, available anywhere. But Starbucks is so much more than just a hot beverage. (If you love Starbucks, you’re probably breathing a sigh of relief that I’m not disparaging your lifestyle.) So what does this have to do with multi-channel and omni-channel? Simply put, we are confusing two different things. •
Multi-channel in its traditional form is a lot like coffee: it stays hot for a while, you have to stir it to keep it relevant, and in the end the effects wear off and you just go on with your day. Make sense? In all seriousness, multi-channel is a fairly bland sales and marketing approach. It represents nothing more than (you guessed it) multiple channels that you market and sell through—mostly unidirectional with little to no cross-pollination between customer-driven activities. Multi-channel is, at the end of the day, nothing more than bricks-and-mortar, online, events, etc., but with no connection. It’s a dead-end marketing and sales effort left over from days gone by.
•
Omni-channel is not multi-channel. Like Starbucks, omni-channel is so much more than just coffee. It’s food, it’s beverages, it’s customized to your liking and comes with its own vernacular and sense of belonging—this is the essence of omnichannel. When a brand embraces an omni-channel customer engagement approach, it connects with customers on a variety of levels—simultaneously. From in-store, to online, to buy-online-pick-up-in-store (BOPIS), to events, and more—omni-channel delivers an ecosystem that embraces and connects with the customer at every interaction point and makes them feel truly special. Just like Starbucks. It’s not just a coffee... it’s a lifestyle that continues on for years to come.
It’s easy to get these things confused. After all, the number of buzz words, terms, generalizations, and industry speak seemingly never end. But remember, once you get past the initial terminology and you understand what the term omni-channel means for your business and for your customers, you’ll know it’s crucial for your success. Those who try to sell you on multi-channel likely have little or no knowledge of the meaning itself; they are stuck in slinging terms to get potential client attention. Unfortunately, the same goes for omni-channel. Many times, people who don’t know the meaning of “omni-channel,” are selling the next cool omni-channel mobile app. Omni-channel can’t be delivered by an app—it can only be delivered through one. The foundation of omni-channel success is rooted deeply in data and automation, and these need to be addressed long before an app is used as one of the many conduits to deliver the customer experience. So before you order a coffee, ask yourself this: Are you just in need of a quick pick-me-up right now, or do you want to go create your favorite new beverage—one that will get you through every day with enjoyment? The choice of channel is yours. Now, as I look down at my actual morning coffee—this better be Madagascar cinnamon, or I’m calling the beverage police.
3 5
WW W .D KL .COM
W W W .D K L .COM
SE PT E MB E R 20 16