Technology needs to be at the core, not at the periphery, of e-commerce. This is a black swan moment for Prescott. Their current thinking cannot solve current problems, as Einstein noted, current thinking is the reason for current problems.
Suvrat’s concerns about Prescott’s inadequate IT strategy (focused on cutting cost rather than setting up a holistic IT approach) has now taken an ugly shape. Prescott’s customer service (CS) team has already received complaints from customers about their credit card information theft from Prescott’s website. Suvrat, until now, was concerned about changing the mind set of the leadership team towards the role of IT in their business, and has been pushing for higher IT Security measures. But with this data breach incident, Suvrat needs to rescue the company from customer attrition or even a possible legal persecution. And it is not going to be an easy task.
Prescott is facing problems in the three most important functions of a business: leadership, technology and CS. All of these need an immediate mindset overhaul.
Leadership: Prescott’s e-tail business can grow into a much bigger business than Purchess, the brick-and-mortar stores, thanks to the high e-commerce growth rate in India. The current Indian e-commerce market is hauled for exponential growth. The existing traditional retailers, as well as pure e-commerce businesses, have invested heavily in technology for delivering a top notch shopping experience. Many of these e-commerce businesses are run by 30-year-olds, who sleep and breathe technology, and have been doubling their sales year on year.
The present leadership team clearly doesn’t appreciate this. First, the e-tail business needs a distinct identity and branding. Following that, let’s call it Prestail for now. Prestail needs to run as an independent high growth business and not even as a profit centre of Prescott. The leadership team at Prescott has a conventional and conservative mindset that has percolated down to the ops, CS, security, and the risk and compliance functions. This is evident in the manner that Jaidev Rana, the CS Head at Prescott, shrugs off the complaints about credit cards theft as a routine issue. The mandatory audit that could have caught the problem early on had been bypassed since the leadership team at Prescott perceived this as an expense rather than a necessity. Interestingly, the very reason that Purchess is in troubled waters is that Bibek Basu, the Ops Manager, included the module that saved customer credit cards because it came without any extra cost!
Prescott has to stop treating Purchess as a cost centre. Prescott needs to understand that Purchess e-tail segment is a different business than its retail business. The target customer base is different and so is the delivery of service, even though the product line maybe the same. Prescott needs a change in the mindset of growing profits by cutting costs and managing within stringent budgets. Most importantly, Purchess needs a separate and independent leadership team that has understanding of the uniqueness and value proposition of e-tail business. Effort to change the mind-set of the existing team would be futile and is a long process too.
Technology: You cannot have a low-cost approach if your business is delivered on technology. The mindset to bring operational costs down by cutting down on technology expense, which might have worked for traditionally run brick-and-mortar retail store, is counterproductive in e-tailing business.
Suvrat finds out that Prescott was incurring recurring cost for configuring a development and test environment exclusively for every new branch they launched. Suvrat suggested a cloud strategy that could save both time and money for developing and testing on a cloud environment, and also for storing data as it was growing exponentially in volume and so the cost too. However, Prescott looks at buying cloud services as an added expense rather than a necessary approach to grow their business.
On a side note and in a very interesting paradox, Suvrat has a hard time convincing his own engineers at Westing Bros to suggest this cloud approach to their clients. The engineers take it as a hit to their top line growth as it would mean loss of billable hours! Westing Bros, and the entire IT industry in India, has its own battles to fight. The consulting and outsourcing first are currently not for result-based profits but squeezing as many as people on projects just to increase billing hours.
Prescott’s team treated technology as just a support function in a business ecosystem; however technology is business when it comes to e-commerce at least. Not only Prescott was left vulnerable to lethal cyber-attacks but was also going to suffer further repercussions. Prescott was about to lose their customers loyalty and reputation in market. Saving customers credit cards could come with a heavy penalty. Prescott could get into a tough legal battle if Madhur Nayyar decides to take the matter to court and if it is proved that his credit card details were, in fact, exposed through Prescott’s website, things would only go downhill from there.
All of this because Ravindra Singh, Director Ops, wants to “sort out everything internally”; Amit Dalal, CIO, is not experienced to handle IT in an e-commerce context, and the IT Infrastructure Head, Janak Patel drives the security strategies with biased focus. Bibek’s confession discloses that it was an innocent attempt for impressing his manager by capturing customer trends; the data that he was not even sure could plot customer trends. The current management team is clearly not capable of understanding this and if it wasn’t for Suvrat, they might not have even held a meeting to address this issue at all. The irony is stark. In an attempt to cut cost, Prescott could lose all the investment and pay heavy fines too.
Prescott needs a qualified, dedicated CTO who has experience in the functional and technology aspects of e-commerce; and who can undertake infrastructure, data, server and network security under one umbrella. They need someone who can start from a clear strategic direction, improve the whole tech stack, launch tech-based digital marketing and customer loyalty programs, and create technology to grow the supplier base. Prescott definitely needs a new leader with an affinity for technology.
Customer Service: There is a typical mood around CS among the brand’s customer and the internal team itself. CS is not about adhering to business processes, canned responses or asking the customer to adjust. It is about understanding and doing beyond. This is a crippling business function that needs a different working model. The CS representative are encouraged to keep the average call handing low and are asked to always stick by the knowledge base. In contrast, CS has to become humane, it has to be about helping and every call can be uniquely solved. Though it is a revolution in itself where you give full authority to your CS representative to solve their customer problems as much as they could and the incentives are tied to their customer delight.
However, in context of Prescott, one of the biggest differentiators that they can define their e-commerce brand is by actually servicing the customer. Not only is Ram Arya’s team outdated, but is driven with no inner desire for customer delight. Jaidev, the CS Head, doesn’t give two hoots about a customers situation. The conversation between the customer support team of Prescott and Madhur, shows a clear lack of problem solving skills. Atul and Jyoti, the two CS representatives, need a more proficient leader than Jaidev. Prescott needs to invest on training customer representatives. For an e-commerce business, the only human interaction is at customer support and to underinvest at the only customer touch-point is a big mistake. Hopefully, the epilogue comprises a chat between Ram Arya, the chairman of Prescott and Suvrat which goes on something like this:
Ram: Suvrat, I spent the entire last night reading your report on the issues that plague Purchess and your recommendations on how to resolve most of them. The first thing I did this morning was call up an old friend, Mohan, who led Customer Support in 365Support, one of the most sought after BPO in Bangalore. I am meeting him tomorrow and would convince him to head Purchess CS function.
Suvrat: That is great; we need to start listening to our customer more carefully!
Ram: That is true. Also, I would like to change the engagement model with Purchess. You would act as an outsourced CTO for Purchess, with complete ownership of our technology stack and security. Westing Bros and Purchess would decide milestones collectively, and we will create a success based payment structure. I will also recommend an equity for Westing Bros in Purchess, which is tied to your performance. This ensures that you are just not a vendor, but a technology partner to Purchess.
Suvrat: I am all in for this, Ram, let’s make Purchess the most sought after e-commerce company in India!
Guest Author
The writer is the co-founder and CEO of DreamOrbit, a technology company that specialises in logistics and e-commerce
