Fidelity Investments’ evolution to the front hybrid model began with a strategy that emphasized credible advice and investment solutions tailored to the individual investor’s situation. This meant picking the customer segments to nurture and creating dedicated groups to serve each of these segments with personalized guidance and service levels appropriate to the profit potential of the segment members. The product groups continued to develop and manage a broadened array of funds and financial services that could be readily bundled and sold by the front-end customer unit.

From an IT perspective, this kind of structural alignment is very difficult. Inadequate systems are a major source of delay. How can an organization be aligned to its markets if customer data is dispersed, segment profitability can’t be estimated and customer defections aren’t visible? Indeed, Fidelity Investments managers estimate that it took more than three years to accomplish 60 percent of their reorganization goals—mainly because of systems constraints.

First Steps to a Customer Embrace

A necessary early step on the path to customer alignment is unified customer information that is filtered through linked databases. When individual product and geographic groups have their own information systems, including ordering and fulfillment, the firm is unable to coordinate its offering. The consolidation of information at the point of customer contact also makes it easier to separate the front-end customer solution units (at stage four) from the back-end product infrastructure.

Good performance metrics systems are also critical to success—they breed cooperation across formerly independent units that all had different goals and rewards. For example, Enterprise Rent-A-Car uses an IT system to rank its 5,000 branches with two customer survey questions, one about the quality of their rental experience and the other about the likelihood that they would rent from the company again. GE Plastics uses systems that track delivery performance so it can reduce variability in delivery date—its number-one customer satisfaction metric.

Mismatched capabilities, fragmented information systems and inadequate execution can all undermine the realignment process. The good news is that these obstacles are familiar and were overcome by the organizations we studied. (Other issues, such as customer resistance to the new model and internal cultural resistance, proved much more intractable among the studied companies.)

Because it takes longer to reorganize the organization than to plan a change in strategy, there is an unrealistic expectation about how quickly the move to a market-focused organization can be accomplished. Those who are successful are able to factor the inevitable challenges into the overall strategy transition plan and don’t try to push it faster than the impediments allow. CIOs can play a critical role in success by clearly outlining the implementation realities in the time line—but must also deftly avoid becoming the scapegoat for delays beyond IT’s control.