By John W. Verity

When Geoffrey Brown, CIO and senior VP of Inova Health System, thinks about customers, he thinks about two separate groups. First are the 110,000 in-patients, 244,000 emergency room visits, 51,000 surgeries and 18,289 births seen each year at Inova's network of five hospitals and patient care facilities in northern Virginia. Second, of equal importance, are the 3,000 physicians who practice medicine at Inova. They are the ones who ultimately bring Inova most of its patients. Not under contract with Inova, these physicians are free to send patients to pretty much any hospital they choose. For Inova, this creates an increasingly challenging health-care market, one in which the Falls Church-based provider must actively compete for these professionals. "We want to make it easier for physicians, nurses and other staff to use our system," says CIO Brown.

That statement pretty much sums up the new strategic focus of many CIOs. They, along with the companies they serve, are focusing on the customer as never before. From a tactical perspective, this means delivering better customer experiences, improving customer service and, ultimately, providing customers with greater satisfaction than they'd find elsewhere.

This new way of thinking applies to customers of every kind, size and shape: families at the local mall ... individuals browsing e-commerce sites ... engineers evaluating advanced technical gear ... citizens calling on local municipalities ... even the highly paid medical professionals that Inova seeks to please. "The customer is in charge now," says Mark Hurst, founder of Creative Good, a New York-based consultancy.

Companies rising to the top of their fields are obsessed with creating good customer experiences, Hurst says. "This strategy has become crucial to success because the din of today's media-saturated environment has eroded the effectiveness of all forms of advertising," he says. "Buyers, thanks largely to the Web, are better informed than they were in the past."

Hurst likens the shift in focus to the Copernican revolution in astronomy — a radical reorientation of thinking. This latest shift puts not the sun, but the customer at the center, displacing the company and its internal processes. "No matter what type of company it is, customer experience is the best lever for boosting business performance," Hurst says.

What's more, the CIO and the IT function are vital components of this new focus on the customer, actively exercising their voice in designing, improving and delivering the customer experience. "Enlightened CIOs are always customer-focused," says Patricia Seybold, head of the Patricia Seybold Group, a business and IT consulting firm. "They contribute to business strategy, and they transform that strategy through technology. They are also attuned to what customers need — and to where customers are taking the company."

Today's laser focus on customers represents "a real paradigm shift," says Martin Fisher, VP of IT at MedicAlert Foundation International. The Turlock, Calif., firm specializes in storing individuals' health records for use in emergencies. "From the CIO's point of view, everyone that interacts with you is a customer," Fisher adds. "You have to give them the best experience you can." That includes not only external customers, he adds, but also internal customers, such as business units.

What's more, with masses of people now well-accustomed to both the Web and e-mail — what Bruce Rogow, chief consultant at IT Odyssey, calls the "iPodization" of IT — the bar for serving customers has been raised higher than ever before (see "The Consumerization of IT," below). Rogow relates how one CIO, aware of how difficult it was to navigate his own firm's Web site, confided, "We don't have customers; we have victims."

To avoid such customer blunders, technology executives must assert themselves as the customers' advocates, experts say. CIOs and CTOs should contribute their technical insights and intuitions as early as possible in all strategy discussions, too — a course of action that Ahmed Abdelmoteleb, CTO at GE Money in Australia and New Zealand, is actively pursuing. "My role," he says, "is to give insight into what technology can do for the business to aid our customer strategy."

His unit, General Electric Co.'s consumer finance arm, is pushing to sell services directly to consumers, in addition to providing consumer-financing services for large retailers and other businesses. Abdelmoteleb offers an example of how that strategy could be customer-enhanced with IT: "We could use a new security technology to attract customers. It might help us to provide a better level of trust, or differentiate our services, versus other banks."

Similarly, Leo Annab, senior VP of technical support at CA, urges CIOs and their companies to move away from a "one-size-fits-all approach" and to abandon the "sell-and-go" model. "This means breaking the business apart and asking, 'What are my segments? What does each one need? How do we differentiate our customer experience from that of the competition?'" Annab explains. "The enterprise has to understand that demonstrating new services, functions and features will instill customer loyalty and will ultimately expand the customer relationship. IT has to serve as the business manager's right hand."

Rx for Customers
Sometimes, what's needed is to get obstacles out of the customer's way. Inova Health, like most modern medical institutions, relies heavily on computing, information management and communications technologies. But a couple of years ago, CIO Brown suspected that something was discouraging physicians from working with Inova — and hampering Inova's own clinicians and nurses. He discovered that patients' medical records, collected during their admission and treatment, were scattered across disparate IT systems, each with its own log-in procedure and password. Busy doctors and nurses chafed at having to navigate their way in and out of these many applications. The systems required them to enter the same patient ID data each time they wanted to view test results, X-rays, charts and other information. From a user's — that is, a customer's — point of view, these various records should have been easily retrievable from a single, unified repository.

While Inova wasn't about to replace all those systems, it chose instead to create a spiffy, Web-based portal to provide seamless, integrated access to all relevant medical-information systems. Today, a single sign-on (SSO) facility handles authentication and authorization for these systems in one go. In the process, it frees physicians and others to get on with their real work. "The result is, our people are much more productive," says Inova's Brown. In fact, because all of the applications now share the same look and feel, new physicians can rapidly learn how to use them. Also, once the physicians are signed in, they can get more work done in less time and with less effort.

The change has given Brown's IT staff at Inova its own productivity boost, too. "We can make changes to systems or bring in new physicians much more easily," Brown enthuses. "We can put parts in and out with much less disruption."

The pressure to improve the customer experience is particularly acute in the hyper-competitive financial-services industry. Financial-services companies have just emerged from a sustained period of mergers and acquisitions, which required them to integrate the resulting collections of incompatible systems. They've also jumped on the customer relationship management (CRM) bandwagon in droves. Now that the dust has settled, financial-services providers once again are shifting their attention outward, to the customer. "CRM and data mining have given companies the 360-degree view of customers that they were seeking, but now the question is, 'What are you going to do about it?'" says Rod Nelsestuen, a senior analyst at research firm TowerGroup Inc.

One way for financial-services firms to achieve competitive distinction: Treat different customers appropriately. For example, a sophisticated trader needs one type of customer service, while an inexperienced, first-time investor needs another. "CIOs need to be invested in the goal of organic growth, and they need to understand that loyalty leads to retention, which leads to cross-sales," Nelsestuen says. "You need to capitalize on every customer interaction by making just the right offer each time."

Financial-services firms might look for guidance from telecommunications companies, which, Nelsestuen notes, have done a particularly good job of attacking the problem of customer "churn." In telecom, customer calls are usually prompted by a problem, and responding with a well-calculated offer can often head off a customer defection. That's a lesson financial-services companies could follow, says Nelsestuen, adding, "You need to know where the customers are in their life cycles and in the product mix, and then match your delivery to their expectations."

Small County, Big IT
Those expectations can take any number of forms. Take Arlington County, Va., just across the Potomac from Washington, D.C. While its 26 square miles may make it the second smallest county in the country, Arlington is packed with federal agencies, including the Pentagon, as well as Reagan National airport and myriad corporate facilities. In fact, Arlington County boasts more private office space than either Los Angeles or Dallas. But after the Sept. 11 terrorist attack on the Pentagon, Arlington officials realized that if they were to keep the county's aggressive growth plans on track, they would need to significantly boost its public-safety services.

The county launched a multipart plan. First, county officials revamped their ability to handle calls for emergency and related services. Today, after partnering with CA to leverage the CA Incident & Problem Management solution, Arlington County has improved its ability to resolve issues for callers during an initial phone call to 52 percent of calls, up from 20 percent previously.

Meanwhile, Christopher David, the county's CTO, saw an opportunity to expand the reach of a local emergency alert service. It's called the Roam Security Alert Network (RSAN). Commuters and others who subscribe to the service receive cell-phone text messages concerning security-related events. For example, they might receive a message about the closing of a bridge, delays on a highway or an impending storm. But in the aftermath of Sept. 11, David had the system extended to a national level so that Arlington can also deliver alerts through other channels, including XM Satellite Radio's D.C.-metro channel, e-mail, instant messaging and BlackBerry devices. Also, Arlington citizens can subscribe to alerts by ZIP code and choose to receive either English or Spanish text alerts.

Arlington County has also dramatically increased its First Responder field support for radio communications. This has included introducing the nation's first Emergency Technology Support Unit (ETSU). It's a police command vehicle refitted with gear that can make broadband Internet access and video conferencing available just about anywhere. The ETSU can also wirelessly interconnect any of the incompatible radio devices that different emergency services might deploy. "Wireless is a big deal for us," David says.

Arlington has even bigger wireless plans for the future, David says. His team has already begun to roll out broadband wireless Internet access across virtually the entire county. Delivered in partnership with EarthLink, this service will provide access to the county's own resources — including streaming videos of many public meetings — at no charge. (Users will have to pay, however, for wireless access to the public Internet.) The goal, David says: Make Arlington an even better place to visit and to do business. "As a mecca for government, higher education and think tanks, we have a tech-savvy population here," he adds. "That really keeps us on our toes."

Agility Lessons
Keeping on your toes is a good idea, given the impatience of today's IT customer, says consultant Seybold. She recently spoke with a CIO who had just overseen the successful worldwide rollout of an ERP system. Unfortunately, the CIO had underestimated the degree to which his firm's customers wanted access to their information. "The customers wanted to roll up their sleeves and get into the system themselves," Seybold relates. The CIO had assumed the luxury of time — a year or two to get internal staff up to speed, then open up the system to outsiders. But his competitors, more aware of the need to empower customers, had slapped together portals and developed their ERP systems more rapidly. Seybold's verdict: "He should have had customers in right from the beginning."

Failing to bring customers in on IT initiatives from the start is a common CIO oversight, Seybold says: "Getting insightful customers involved can help to drive your priorities and resource allocation. You want to find out what the customers' ideal processes are versus what's in place today."

In an increasing number of markets, it's agility that customers are seeking, even if they don't talk about it quite so abstractly. MedicAlert, for example, is preparing for a massive expansion of its offerings — and client base — that hinges almost entirely on increased flexibility. Since its founding in 1956, the firm has built its not-for-profit business by selling bracelets and other personal items that can inform emergency health workers about clients' allergies, blood type and other critical information. For additional fees, the company can also retain sets of medical files, which can be faxed to emergency doctors when needed.

But now, a big change is on the way for MedicAlert. "We believe that as the baby boomers get older, they will make more hospital visits, which will generate demand for access to a greater number and variety of medical records," explains VP of IT Fisher. MedicAlert sees an opportunity to serve as a single, secure repository for the most significant of these medical records — and to move them electronically to wherever they might be needed.

Fisher expects that hospitals and health insurance companies will also get into the game of securely managing consumers' medical records. But MedicAlert will emphasize its independence from the actual delivery of treatment. "We want to be the Switzerland of medical repositories," Fisher says. In fact, neutrality is key to the company's plans for creating what will amount to a virtual records management system. The firm will not only keep client records on its own computers, but will also pull records from potentially thousands of hospitals and doctors' offices around the world.

But to do that, the firm must first revamp its IT systems along several dimensions. Today, less than 29 percent of doctors' offices use electronic records systems, Fisher says. That number will grow, and as it does, MedicAlert must be ready to interact with any installed system.

Meanwhile, many new types of data are likely to emerge, such as huge files generated by new scanning techniques, and MedicAlert will have to be able to handle them, too. To do so, the company has partnered with CA and webMethods Inc. to move its IT setup to a service-oriented architecture (SOA). Surprisingly for such a large effort, the SOA project proved easy to sell to Fisher's fellow executives. "At MedicAlert, the marketing vision is driven by collaboration with IT," he says.

After a fair amount of upfront redesign, the first phase of MedicAlert's SOA project went live in mid-2006; so far, the results look promising. Order-processing functions have been separated from records storage, "so we can change them independently of each other," Fisher explains. All records must be kept "as secure as records at the biggest banks," he adds, even as they get pulled from external sources and involve varying types of data. Today the firm is focused on the data center. MedicAlert is nearly ready to unveil a new Web site, and it is working to add many data sources.

CIO, Heal Thyself
Many CIOs find that before they can provide a superior customer experience, their own IT department must first get its act together. That was the case for Phil Bertolini. Named CIO of Oakland County, Mich., in 2001, Bertolini inherited an IT organization that had, in 1996, struggled against a backlog of some 900 work orders. His customers were 82 county departments/divisions, 61 local municipalities, plus 220 agencies in six counties. "They didn't see IT as a department that could deliver for them," Bertolini recalls. "There was no standardized way to get a new report generated or have a business process automated."

Luckily, Bertolini had been a customer of IT himself in an earlier stint as head property tax assessor. So the new CIO knew the efforts made by the county executive's administration to reverse the trend of endless waiting for IT's attention. What's more, Oakland's county executive had considered Bertolini someone who could run IT as a business and improve its levels of customer service. Bertolini's response: Move aggressively on the governance of IT, continue to bring new structure and process to the department, and thereby improve accountability and manageability.

Step one, in 1996, was to bring in a full-blown project portfolio management system to help prioritize the long list of requests for IT work. New processes were developed that required every customer requesting IT work to justify the request in a cogent manner: How would this new system improve the way business gets done? What will its cost be over a six-year period? What technologies will it require? What's the ROI? "We began to look at every nickel spent on building a system and its ongoing maintenance and operation," Bertolini explains. "Customers had to justify their own projects versus other projects."

Open Communications
This new procedure also opened up new channels of communications. Customers became more actively involved with IT. "In the old days, we put in a work order and hoped for the best," Bertolini recalls. "Now, we can look strategically and find new ways of leveraging our dollars." Also, the Oakland County CIO finds his customers now have a more conscientious understanding of their projects.

To further streamline processes, Bertolini has his department adopting the IT Infrastructure Library, the set of best practices better known as ITIL®. To smooth the way for what amounts to a transformation of IT culture, members of Bertolini's staff have completed an ITIL training program provided by CA. The program employs a simulation game based on the near-disastrous Apollo 13 mission to the moon. Trainees role-play the ground-control team trying to safely guide the endangered astronauts back to Earth. "We failed on our first try," Bertolini recalls. "But it taught us a lot about problem management vs. incident management."

Back on earth, the county's first application of ITIL has been in the area of technical support. Help desks have been rationalized, the process of trouble-ticket management rethought, and a customer self-service portal brought online. Next will be what the ITIL book calls configuration, change and release management.

Ultimately, Bertolini says, it has been IT's customers who've gained from the changes. In the past, for instance, county or municipal agencies would often get themselves, and IT, into trouble. They'd be wowed when some supplier demonstrated a spiffy-looking technology or gizmo, but miss its hidden costs. The resulting IT failure was bound to end up on the front page of the local newspaper. Now, says Bertolini, "The customer gets IT in to kick the tires."

In the ultracompetitive retail business, the customer experience boils down to making sure customers find precisely what they want when they visit a store. Lost customer loyalty is the greatest loss of all. And "stock-outs" — instances where a store runs out of a popular item — inspire fear in any retail manager's heart. At Ripley Corp., a large South American retailer, that concern translates into a new focus on managing the supply chain. Ripley, which operates 43 stores in Chile and Peru, is now building what Gustavo Pardo Noceti, corporate information manager, says will be the largest retail-distribution center in all of South America.

Ripley looked for a solution that would address its need for seamless project development. "Historically, our project management didn't satisfy the needs of internal clients," Noceti says. "Control over budgets or deadlines was deficient." Today, Noceti has improved the collaboration and communication between Ripley's IT and the internal customer. "CA Clarity™ Project Portfolio Manager provides visibility into the status of the project, generating early alerts about projects that may otherwise fail," he says.

That kind of visibility is key to CIOs seeking to help their organizations win — and retain — satisfied customers.

John W. Verity writes about business and technology from South Orange, N.J.