Service at Scale

t’s 2004, and a frustrated customer walks into an independent record store. Last week, she heard a song she loved on the radio, but didn’t catch who it was by – and it has been stuck in her head ever since. The store owner asks her to sing what she remembers, recognizes the song, finds the CD, and plays it back to her. She is impressed by the personalized service, buys the CD and a couple of others that the shop owner recommends, and leaves the store likely to return in the future. Fast-forward 15 years, and digital technologies have stepped up to replace our helpful store owner. Music mobile app Shazam, which was acquired in 2018 by Apple, recognizes songs, provides the user with the details, and recommends similar songs – which can then be purchased or streamed on Apple Music. In many ways, this is the same personalized service offered by the independent store, but with one crucial difference: this is personalized service at scale. 2

riving mass personalization like this is a major area of D focus for businesses as they look to transform. Digital technologies are upending industries, companies and consumers, throwing open possibilities to redefine all aspects of business. At TCS, we call this Business 4.0TM, and it is enabled by four key behaviors: Driving mass personalization Creating exponential value Leveraging ecosystems Embracing risk Businesses that excel across these behaviors tend to be the best performers, and it is these businesses that are forecasting fast growth. 3

CUSTOMERS FOR LIFE

Globalization and industrialization have made personalization difficult. Businesses have huge customer bases – driven by the internet – and mass production has become essential to meet demand. The prohibitive cost of offering mass personalization plus the labor-intensive nature of offering custom goods and services at scale have discouraged companies. Digital technologies are changing this. According to our 1 research , more than three-quarters (78%) of companies globally say they are able to customize their products and services to individual customers and transactions either most or all of the time. Mass personalization is clearly a primary strategy for brands today. And there is a big prize for brands that succeed: customers for life. Our data show that a third (32%) of businesses report less churn as a result of being able to personalize their offerings.1 High levels of customer loyalty and retention are the holy grail for marketers – particularly for businesses with subscription-based business models – and personalization at scale is a key way to achieve this. TCS, Winning in a Business 4.0 World, https://www.business4.tcs.com/ 5

GO DIGITAL TO GET PERSONAL

D emand for personalization among customers is high, and the rewards for companies can be great; it is a win-win strategy. But how do businesses get personal – at scale? Data Mass personalization is built upon data. Without data, brands cannot find out what products, services and experiences consumers want, let alone provide them. One example of a company using data to drive personalization is beauty brand Olay, which recently launched its AI-powered Skin Advisor2 service to customers. The mobile app allows women to take a ‘selfie’ on their cellphones, which is analyzed by Olay’s VizIDTM deep learning technology. Once the customer has answered a few questions about their product preferences, the app tells them their ‘skin age’ and highlights any problem areas they may have, based on its analysis. Then Olay offers the customer a personalized range of product recommendations – all driven by data. 2 P&G, News Release: Olay Unveils Global Skin Analysis Platform Olay Skin Advisor – The First-Of-Its-Kind Application of Deep Learning in the Beauty Industry (February 2017), accessed October 28, 2019, https://news.pg.com/press-release/pg-corporate-announcements/olay-unveils-global-skin-analysis-platform-olay-skin-adviso 7

Machine learning Machine learning is essential for mass personalization: it makes sense of all the data companies are collecting. Companies have access to so much data that they cannot process it manually or rely on rule-based logic; instead, they must turn to machine learning. 3 Adobe Target, for example, is a software tool that helps users personalize their content to customers. Machine learning algorithms automatically identify relationships between data and then learn the best experience and content to present to the customer, based on that data. The self-learning capability means it does not need to be programmed by a person, which speeds up the process and allows it to be deployed at scale. Security and privacy If mass personalization is built upon customer data, then security and privacy are the foundations. Customers want personalization, but only if it is delivered to them securely; without it, customer trust – a priceless commodity – will be lost, and they may be more reluctant to share their data in future. Security technologies should therefore be paramount in businesses’ mass personalization strategies. 3 Adobe, Test and optimise digital experiences — every time, with Adobe Target, accessed October 28, 2019, https://www.adobe.com/uk/marketing/target.html 8

Automation An automation-first mindset is essential as companies build the technology to support mass personalization. The sheer scale of people and data they are working with makes automation essential – take, for instance, Shazam versus the record shop: one is scalable; the other is not. Another example of personalizing offerings at scale comes from a telco we are working with in India. Cellphones are, in most cases, an extension of the person who owns them, which means that one-size-fits-all plans, with their fixed amounts of data and minutes, are no longer fit for purpose. With this in mind, in partnership with the telco, we have created a ‘build-your-own’ service, which allows customers to set the amount of minutes and data they expect to use over a given period, and earmark the times and days they expect to use them the most. These combinations of choices could vary wildly: this is mass personalization in action – and it all relies on automation. The manpower needed to configure just a handful of personalized telecom service plans would be significant; on this scale – millions of customers – it can only be achieved through automated technology. This automation-driven offering drives customer satisfaction and retention, which is highly sought after in the subscription-based telecom world. 9

Telcos want to be able to offer automation-driven mass personalization in the B2B world, too. After all, B2B customers are people, and with the consumerization of IT they expect the same personalized experiences at work as they have at home. We are helping a Nordics telecom company, for example, to offer personalized configuration services to its B2B customers, using automation, to take the pain out of what would be an onerous process to provide customized offerings. Our technology is enabling the telco’s sales team to simply take an iPad into meetings, and in just minutes, offer customers a personalized configuration plan that suits their needs. Again, this level of personalization would not be achievable without a high-functioning, automation-led technology infrastructure working in the background. 10

A HOLISTIC TRANSFORMATION

T he examples here demonstrate the power of technology to drive mass personalization. But success will not come from simply throwing technology at the problem; it is important to consider a range of other business-led factors as well. Become customer-centric, not product-centric Companies are keen to ensure they are customer-centric, but it is also about how the business is organized. Most companies are product-centric: processes and systems were designed around creating or delivering a product or service. But in today’s Business 4.0 world, companies must start with their end customer in mind, and develop products, services, and processes around them and their needs. Embrace cultural change to drive personalization goals Changing the nature of the business in this way – away from being product-centric and toward being customer-centric – is difficult, and requires cultural change in the organization. And cultural change is also needed in order to tap into the ecosystem of partners that will help drive personalization, because it requires a much more collaborative approach. For many companies, this can be a major challenge. To overcome it, they must undertake significant change-management programs that incorporate KPIs and incentive schemes. 12

Balance personalization with privacy Although personalization is highly prized by consumers, nothing is more important than respecting their privacy. Personalization is built on customer data, but it is essential for that data to be stored securely and used in an ethical, privacy-centered way. Many personalized services can be developed using data that companies already collect from customers – without having to go further than that. For example, transportation companies already know a customer’s origin and destination, reason for travelling, and their personal details. From this, they can make reasonable assumptions about their needs –hotels, for instance, or cars, or excursions. Companies should mine the information they already have as their first step. 13

PERSONALIZATION IS JUST ONE PIECE OF THE BUSINESS 4.0 PUZZLE

Looking at these examples, what stands out is how much mass personalization works hand in hand with the other Business 4.0 behaviors: leveraging the ecosystem, embracing risk, and creating exponential value. In the example of the build-your-own mobile phone plan, the telco in question partners with media-streaming firms, such as Netflix, to offer consumers the exact service they want. Greater ecosystem involvement leads to a more personalized service and, ultimately, more and more value for the customer. Of course, there is risk in offering personalization to customers. To keep pace with Business 4.0, companies are now moving toward a more technology-led approach, rather than focusing purely on their core offerings and toward a more technology-led approach, and as with any new foray this brings in risk. Olay, for example, is a consumer beauty brand, but it has invested heavily in technology in order to augment its offering through personalization. It is a risk, but it is something that successful companies embrace today with new business models that will create exponential value for their customers. 15

LISTEN TO THE CUSTOMER

When you walk around any city center today, how many independent record stores do you see? Not very many, I would guess. Back in 2004, it would have been difficult, or even impossible, for businesses like that to predict that, by personalizing at scale, digital competitors would rip out the very core of the value they offer their customers. Customer expectations and market dynamics are changing fast, and companies must be prepared to evolve . Mass personalization is now a key customer expectation, and it is essential that businesses give consumers what they want. Mass personalization, along with the other Business 4.0 behaviors – leveraging the ecosystem, embracing risk, and providing exponential value – will keep businesses relevant both today and in the future. Ignore these behaviors, and another Shazam will come along and do the job instead. 17

About the Authors Kamal Bhadada President, Communications, Media, and Information Services, TCS Kamal leads transformational engagements with large organizations in the communications, media, and information services sectors. He is part of the TCS North America Leadership Council and plays a vital role in formulating strategies for TCS in North America. Kamal is the co-owner of several patents in the areas of interactive media and streaming video. Sankaranarayanan (Shanky) Viswanathan Head, Industry Advisory Group, Communications, Media, and Information Services, TCS Shanky helps global companies drive and sustain business leadership with his strong industry and technology expertise. He is part of the review committee for telecom-related initiatives of the US-India Business Council, and holds multiple patents in digital-led telecom business solutions. 18

To know more Visit https://www.business4.tcs.com/ Email: [email protected] Follow us on social media: Facebook: TataConsultancyServices LinkedIn: TataConsultancyServices Twitter: @TCS Instagram: @tcsglobal About Tata Consultancy Services Ltd. (TCS) Tata Consultancy Services is an IT services, consulting and business solutions organization that has been partnering with many of the world’s largest businesses in their transformation journeys for the past 50 years. TCS offers a consulting-led, cognitive-powered, integrated portfolio of business, technology and engineering services and solutions. This is delivered through its unique Location Independent Agile delivery model, recognized as a benchmark of excellence in software development. A part of the Tata group, India's largest multinational business group, TCS has over 424,000 of the world’s best-trained consultants in 46 countries. The company generated consolidated revenues of US $20.9 billion in the fiscal year ended March 31, 2019, and is listed on the BSE (formerly Bombay Stock Exchange) and the NSE (National Stock Exchange) in India. TCS' proactive stance on climate change and award winning work with communities across the world have earned it a place on leading sustainability indices such as the Dow Jones Sustainability Index (DJSI), MSCI Global Sustainability Index and the FTSE4Good Emerging Index. For more information, visit us at www.tcs.com. All content/information present here is the exclusive property of Tata Consultancy Services Limited (TCS). The content/information contained here is correct at the time of publishing. No material from here may be copied, modified, reproduced, republished, uploaded, transmitted, posted or distributed in any form without prior written permission from TCS. Unauthorized use of the content/information appearing here may violate copyright, trademark and other applicable laws, and could result in criminal or civil penalties. Copyright © 2019 Tata Consultancy Services Limited