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Blogs > Banks Statement

The Role of Everyone in Everyone Else's Reputation Management
Martin Banks By: Martin Banks, Proprietor, Lian-James Consultancy
Published: 17th August 2012
Copyright Lian-James Consultancy © 2012

What follows is an extract of a whitepaper written for a client, NetPrecept Ltd, on how Cloud Service Providers (CSPs) can guard against being the fall guy’ when cloud services damage a company’s reputation.

But there are wider issues in play here that affect more businesses than just CSPs. Every company looking to play a part in the cloud delivery chain has to start by being aware that they are in fact a part of a delivery chain, and that they play an integral part in managing and ensuring the reputation of both their customers and business partners.

The cloud is not about technology any more, not directly at least. Instead it is about the impact—for good or ill—that the technology can bring to the collective reputation of a complex delivery chain. That reputation impact then flows out to each individual component in that chain. When it works it can be one of the most satisfying moments in a customer’s day—they have located, selected, ordered, paid for and got a confirmation email on a product they want or need, all in a matter of a few minutes.

When it does not work, the technical staff will be able to point—eventually at least—at the probable technical failing that caused the problem. They will be able to identify, for example, the rogue process that was either unwittingly designed into the system, or maliciously inserted in some way. But while that knowledge will be useful in resolving and avoiding the problem in future, the damage will be done.

And the damage done will be to the reputation of all elements of the service chain. The end users will blame the retailer or other brand leader of the product or service. They in turn will blame the service providers they have contracted with. And it will be the CSPs that will often be seen to have allowed their customers’ reputations to be damaged.

In most cases the lynch pin of this chain is the CSP. These companies are usually providing the services for both halves of the service chain. The product owners, the website designers, and the service aggregators will, if they are using cloud services, be hosted by CSPs. And they will be assumed to be the ones with the depth of technical expertise to manage all aspects of the service delivery process, from soup to nuts. That includes the ability to manage service delivery problems—where 'manage' means 'stop all negative impacts on the service’. The end users of the service chain—the consumers—will not stand for failures and are likely to be unforgiving.

They will tolerate a few seconds delay, maybe a couple of minutes. But if a service failure is longer than the time needed to make a cup of coffee, the impact will certainly be negative and they are highly likely to curtail the transaction and look elsewhere.

Why is reputation so important in the era of the cloud?
Business and/or brand reputations can be damaged very quickly in the cloud because it significantly shortens the distance between the consumer and the vendor. But not just the vendor: the designers, manufacturers and the supply chain can all suffer equally. That supply chain will also include the supplier of the information—ie the CSP.

The cloud shortens the distance between consumers and other consumers. Social media creates a channel through which they can share information with each other, and some of that information will be about products or services that do not meet expectations in some way. In fact, before social media, consumers were largely enquiring and purchasing in isolation, with the only 3rd party input being comparison of experience with family, or 'friends at the pub’.

Now they can put up a message on Facebook or Twitter, or search for a forum/community website that covers an appropriate subject or specific product, and potentially have a response/support/advice etc from tens to hundreds of other consumers within the hour. Such processes can kick-off firestorms of criticism (or praise, depending….). Those firestorms can in turn be picked up by an observant press and become national issues. And this can all happen very quickly.

How technology affects reputation
It can affect for good or for ill. The fundamental issue is that the consumer and vendor are put into what appears to be direct contact. In practice, of course, there are intermediaries involved in this process as well, such as the CSPs and the providers of the software tools being used to manage the process, plus the network service carriers and the rest of the players in the cloud service delivery chain. But it is the directness of connection which is the issue, coupled with the speed at which processes happen.

Positive Effects
There are many ways in which cloud-based services can add value to all the businesses in a cloud delivery chain. This ranges across all aspects of the chain, from the primary brand holder—which could be any product or service from washing up powder, through civil engineering contractor to a rock band—through the website design company, the banks and financial services companies, the cloud service providers and the online retailing outlets.

When the service works and all elements dovetail together as designed and planned, the speed, comprehensiveness, granularity, and security of the services provided, plus the most important component, the convenience and effectiveness provided to the end customer, all serve to satisfy the needs of consumers of all types.

And satisfied consumers bring with them two distinct business benefits; one, they tend to return to the service that met their needs last time, and two, they tend to tell others—be they family, friends, colleagues, or business partners—about the service providers that have impressed them. And increasingly they also voice their opinions through social media.

In other words, the brand of not only the product or service bought will be enhanced, but also that of every step within the service delivery chain. And for the CSPs, a happy service delivery chain is the essence of their brand. The service, for both halves of the chain, works.

Negative Effects
It is when the service delivery chain breaks down in some way that the potential for damage to reputation, and consequential damage to brands, are most likely to occur. And with cloud-based delivery methods the rate of service breakdown can be both rapid and widespread: it is quite possible for one problem in one part of the delivery chain to set off a chain-reaction, not only through the length of the service delivery chain itself but also within other service delivery chains with no direct contact except sharing a CSP service.

This is particularly likely to be the case if a problem occurs with a CSP in the chain, as they will usually be at the centre of propagating and amplifying the results of any problem that might occur. Problems within a CSP, such as unforeseen mismanagement of resources, failure to manage demand or problems trapping any form of malicious attack, are likely to affect more than one customer or one service delivery chain. In the worst cases—and there have been many already, including some of the biggest brands in the CSP business—it can impact the entire service, for all the CSP’s customers are brought to a halt.

What is worse, perhaps, is when the service continues to run, but slows because of resource management issues. It could even be the case that the CSP does not notice the problem—if service level targets are not properly set the service can be said to be 'working’, after all.

This is just one version of the 'knock-on’ effects which can proliferate within a CSP once a problem has started a chain reaction. It also means that the CSP can find that just one fundamental problem can be the cause of damage to the reputations of other customers.

And to round it up
What this is saying, at the end of the day, is that the vast majority of traditional IT vendors have lived for many years in fertile, well-tended siloes that provided their every need. And as the whole of IT got bigger, so the number of siloes has grown and the degrees of niche specialisation have narrowed. Now, with the cloud, that model is threatened, and most likely is about to be mortally wounded.

The cloud turns everything volte face. Once providing increasingly niche technology was important, now it is irrelevant unless it serves a wider purpose—and that purpose, as Ramses Gallego (security evangelist at Quest Software and VP at ISACA) said in a briefing (http://www.businesscloud9.com/content/data-must-ask-who-are-you-and-what-are-you-doing-me/11434) with me recently, is to take the concept of security, and turn it into risk management for the entire enterprise. And that means more than just technology, as well as a very different approach to exploiting technology itself.

(And don’t worry if you haven’t got time to look now, I will be re-running that piece here soon).

This is no longer about technology per se, and even less about security technology. It is about the IT service providers of all types accepting and understanding that they are now a core contributor to a much wider issue than providing technology. They are the base on which the reputations and brand values of many business stand.

Yes, some of the bigger mega-corporates in IT will say they understand this, but they come from a time when they had several months in which to plan out a recovery process for customers, or at least work out a damned good excuse. With the cloud it can all go belly up faster than it takes to read this sentence.

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