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Saturday, August 30, 2008

UC Value Not Usually Just Customer-facing

Here's a constructive comment about the value of UC for "Customer UC" Well taken!

Hi, Art,

Thanks for the newsletter. There are certainly some important points about that portion of Unified Communications that are customer-facing. I hope this theme works well for you at the TMC conference.

However, I really don’t agree with your statement, “But, guess where that kind of "productivity benefit usually takes place? In customer-facing activities, better known as customer interactions, …”

Value chain analyses of any company in any specific industry shows that the spending needed to support the delivery of goods and services is distributed in many, many places that are not “customer-facing”. An exhaustive set of examples would fill a very valuable book, but here are a few:

Most high tech (including equipment, software, chemicals, pharmaceuticals, automobiles, etc., etc.) manufacturing firms spend between 10% and 25% of revenues on their product development cycles; sure these include customer focus groups and validation processes, but they are not “customer facing”.

Cost of goods in manufacturing ranges from 15% to 70% and those costs are not at all customer facing, since they represent the internal or out-sourced production processes.

Hospitals (and railroads, for that matter) are profitable or not based on how smoothly they move the patients (or trains) through the system, i.e. by managing to spend the least amount of money from the fixed payment (health care reimbursement or transportation tariff) they will receive for the work. Even though a patient is perhaps the “customer” the actual costs have little to do with “customer facing” activities.

Almost all of the Enterprise overheads – HR, Finance, IT, etc. – are not specifically customer facings and usual consume 10% to 15% of revenues.

So, my conclusion is that the majority of the business processes in which UC can profitably intervene are not customer-facing.

Improving the customer interface with UC is great – go for it – but not the entire story.

Do you agree?

All the best,

Marty Parker


UniComm Consulting

408-420-5539 phone

916-652-6573 fax