By Lane F. Cooper

What's worse than an online customer transaction with a problem? An organization that doesn't know its online applications have problems processing transactions, resulting in disappointed customers and lost revenue. While organizations are collectively investing billions of dollars to provide Web-based access that enables self-service transactions, few CIOs have sufficient visibility into their individual interactions. What's more, as transactions increasingly move online, CIOs are gaining a job, that of managing the customer experience. For most, it's a totally new responsibility.

Worse, transaction-site malfunctions are surprisingly common. Nearly 90 percent of all online customers have experienced problems with online transactions at least once, finds a Harris Interactive survey released last fall. The survey—designed to explore consumers' transaction experiences on shopping, banking, travel and insurance Web sites—also found that online users who run into hiccups in their digital shopping sprees can feel vindictive. Forty percent of online consumers said that, given a problem, they would abandon a transaction or turn to a competing site to handle their purchase or other needs.

"If you have a problem in a physical store that the cashier cannot solve, your problem escalates to a manager or supervisor," says Jasmine Noel, a principal analyst at market watchers Ptak, Noel & Associates. "But online, there is just a click, followed by an hourglass or clock icon spinning for an uncertain period of time."

With nobody to listen or respond, online consumers are left to assume the worst about their online merchants. Among consumers who told Harris Interactive that they would take their digital dollars elsewhere, 90 percent also said they would question the basic competence of the delinquent online storefront in other areas. That includes, they said, the merchant's ability to protect their credit card numbers and other private information.

New Duties
CIOs plugging into the digital economy must deal with this challenge. In fact, managing the customer experience online now represents one of the biggest challenges many CIOs face. That's because their new duties include ensuring that online applications perform optimally; identifying transactions, down to the user level, that are having problems; and helping IT solve issues proactively. CIOs must then use this information and capability to ensure that the business is both productive and profitable.

But this challenge also represents a major opportunity for CIOs to lead and transform the business. That's the thinking behind Application Performance Management (APM) from CA Wily Technology. APM aims to ensure transaction integrity and user satisfaction. Done right, APM can result in a Customer Success Management (CSM) strategy that can help an enterprise securely unify and simplify complex IT environments. It can also help CIOs ensure that systems, processes and people work in sync across the enterprise.

Over the last 10 years or so, while many Organizations have moved more of their business online, few have replaced their traditional transaction-processing (TP) systems, such as those operating on mainframes or large-scale distributed systems. "Those systems are still in place, and they continue to operate and process the majority of transactions of large enterprises," says Mike Malloy, a vice president with CA Wily Technology.

To date, efforts aimed at Web-enabling business models have been viewed mainly as business opportunities rooted in addressing a complex set of technical issues. In this regard, IT departments have done a handsome job of bringing technology to the Web. But what has been less successful is a comprehensive analysis and understanding of how a fully automated self-service sales channel affects the complete range of relationships between customers and the organization. Managing the complete customer experience is a new role for most CIOs. In the past, IT supplied the infrastructure, and the business owned the customer relationship. But with Web applications, IT is now completely responsible for a customer channel. In fact, IT often knows more about this customer channel than most other business leaders in its organization.

Customer Care
As a result, a growing number of CIOs realize that looking out for customers in the digital store is now their job. "The IT organization's role used to be to support the business units that took care of the customer," Malloy says. "But in the online environment, IT's role is to take care of the customers themselves."

That's because online customers rarely interact with suppliers' business units. Instead, they interact directly with the systems that IT has developed and manages. After all, the purpose of the online business model is to allow transactions to be completed without any person-to-person interaction.

As a result, it's increasingly up to CIOs to get a detailed handle on the customer experience and to take the initiative in working with business units to ensure a successful outcome every time. "IT has to be on the front lines of noticing patterns of problems in online transactions, "Noel says. "Then IT has to work with the business units to figure out how to treat customers who have problems."

As previously mentioned, an approach to managing this issue is Customer Success Management strategies, such as CA Wily Technology's Application Performance Management. But no matter which solutions CIOs use, experts say successful CSM strategies should address these five dimensions of the transaction completion environment:

Inside to Outside: Due to the complexity and composite nature of Web applications, management technology must be able to monitor the performance of individual components within the Web infrastructure—and their interactions with one another at the deepest levels. That's because transaction integrity depends on the flawless interaction of hundreds of components and back-end systems. Only by knowing performance at the deepest level can a CIO be certain that the higher levels—the business process, shopping cart and entire transaction flows—work properly.

Outside to Inside: The ability of end users to successfully initiate and complete transactions is the ultimate measure of success for Web applications. CIOs must understand the customer experience so their organizations don't get blindsided by end-user complaints or, worse, poor application performance that leads to reduced revenue. Organizations need to receive instant alerts whenever customer satisfaction, service-level compliance and expected revenue are threatened.

End to End: To manage composite applications, CIOs need at least the ability to monitor and trace real transactions from the end user's browser to the backend systems in which the data is located. But to be truly effective, this end-to-end visibility must be internal—that is, from the application's point of view. That way, CIOs can identify problems quickly and accurately. By contrast, siloed systems management tools fail to share this data as transactions traverse the information supply chain.

Top to Bottom: Whether application platforms are provided by a single vendor or many, the management solution must provide realtime visibility across the entire stack: server, operating system, Java Virtual Machine, portal server, integration middleware, application server, application code and database. And it must do so with a single tool, regardless of operating system.

IT to Business: Organizations that deploy business-critical Web applications must ensure that IT groups and the business units communicate effectively. This is especially true when it comes to application performance. Performance degradation here doesn't just affect operations behind enterprise walls, causing discomfort to employees; it directly affects the customer experience in what could potentially be a very public manner. The management solution must provide a shared mechanism for IT staffs and business unit managers to measure application availability, performance trends and customer success.

Wireless Ways
For an example of how this approach can work, consider the telecommunications industry, one of many sectors that have been dramatically affected by deregulation, digitization and globalization. In the past, telecom carriers achieved competitive differentiation by how well they ran the technical parameters of their networks. But today, telecom success is also determined by how quickly carriers can develop and roll out new products and services. One critical element of their speed-to-market strategy is self-service capability, in which customers go online to select the features and services they want to use. This is particularly true in the industry's wireless sector.

For example, one wireless carrier's research revealed that customers seek out service plans that can save them money. No surprise, perhaps, but the carrier had an issue: Its plans with the biggest savings required customers to recruit relatives and friends to sign up with the same service provider. Also, the carrier offered this option solely through a self-service online portal. The carrier did not offer 800 numbers for customers to call, nor did it offer the plan through retail facilities.

To make the campaign work, the wireless carrier implemented an advertising and promotion campaign designed to drive traffic to the Web site and register the network participants. The company expected high subscription rates in response to the offer, especially since there was no charge to the customer.

But unfortunately, the initial subscription rates for the plan fell far short of the goals the company had set. To uncover the problem, the carrier's management team investigated the early results of the campaign. They found that the promotion was succeeding in attracting customers to the self-service site. But once customers got there, many dropped off before completing the registration process.

Caller ID
To help resolve the issue, the carrier worked with CA Wily Technology to implement a Customer Success Management strategy. Together, the two companies examined the technical issues associated with the applications, connections and back-end mainframes. More important, they examined all processes from the customer's perspective. Over a period of weeks, the joint team isolated a serious problem: The site was slow, registrations took a long time to complete, and customers were mainly dropping off due to their impatience. In fact, the research determined an inverse relationship between the time required for a registration and the transaction success rate. In other words, the slower the system, the greater the percentage of customers who abandoned the effort before completing their registration.

Happily, the carrier's engineers were able to speed the process. Within a few weeks, the plan's subscription rates quadrupled. To a great extent, the IT department now owns the customer relationship with this particular segment of the business. Other than logging in to add or change their list of network participants, customers have no contact with the carrier. For the company's CIO and customers alike, that's no problem.

Lane F. Cooper is an editor and analyst covering the impact of technology on business operations. He has written for publications including InformationWeek, Optimize, Byte and Enterprise Systems Journal.