What are Code Halos and how are they improving the customer experience?

4th Apr 2014

In order to keep up with the shifting economy and avoid being overtaken by new companies, business leaders need to get their 21st-Century thinking caps on. However, radically changing how we think, and changing how we operate our businesses, is easier said than done – we are, after all, creatures of habit.

The soon-to-be-published Code Halos aims to inspire business leaders to rewire company processes to leverage the true power of new technologies (social, mobile, analytics and Cloud – 'the SMAC Stack') and its consumer data, which the authors argue is where future market value lies. This ever-growing mass of data is already out there, floating around in cyberspace, but businesses are really struggling to unlock it.

Paul Roehrig, who heads up Cognizant's Centre for the Future of Work and was one of the three authors of Code Halos, explains how witnessing businesses struggle in this way inspired him and his colleagues to adjust their own thinking: “A lot of our customers recognise these new technologies – but then they get a little bit stuck. They have trouble trying to define what they really mean for the overall business, not just from a tech perspective but also in terms of how the technologies really change how work is done.

“We stepped back and looked at what’s really changing across multiple industries, multiple sectors and multiple business processes. And it really comes down to the intersection of data between different elements of people, process and technology. That’s what we called our Code Halo.”

What are Code Halos?

Paul points out that as well as our physical self, we all now have digital selves, too. Every digital interaction we have – be it at work or in our personal lives – acts as yet another brush stroke in the insanely detailed picture that is being painted of us in the cyber sphere. All this virtually stored information – which can include everything from what music we’ve been playing to what books we’ve been ordering, from the journeys we make to our exercising habits, not to mention who we socialise with, what our favourite foods are and even how we take our coffee – forms the Code Halo that surrounds each of us. Just like a fingerprint, each Code Halo is unique. And therein lies its power.

This information isn’t just orbiting us in our private lives though: “Code Halos now surround us as employees, as well as organisations and devices – whether it’s from mobile technology or even censor technology in cars or what have you,” says Paul. That means that not only do you have a Code Halo, but so does your business, so do your suppliers, and so does your workforce. 

So, it’s clear that Big Data is a biggie here, but Paul is keen to stress that Code Halos really do go beyond the traditional data concept. “We think that when the Code Halo lens is applied to technologies and data and information, it changes how commerce is being done. The fundamental differentiator here between what’s a Code Halo verses what’s Big Data and analytics is a new kind of commercial model.”

To provide an example, he talks us through Disney’s new magic bands – the wearable technology that you can use as an entry ticket, a room key, a credit card and a photo album, among other things. “The underlying foundation is very much Big Data,” Paul says, “but the real business value is that it creates a new kind of customer experience, and a new kind of commercial model. It changes how people not only move though the park, but how they buy things. So this is one example of how Big Data is certainly a core element of the overall solution, but it goes beyond that.”

The value itself lies in the enriched customer experience – which includes everything from service to product – and Code Halos help businesses create this. “If you look at where these Code Halos collide, you’re seeing dramatically new kinds of business value being created in the customer interface, in new product and in service development, as well as the rise of the smart machine. In a marketplace where experience is key to success and customers expect a personalised approach, this could be a game changer.”

See you at the crossroads

Indeed, according to the book’s authors, the Code Halo concept – of sorts – has already proved itself as a serious catalyst for change. This is demonstrated in the Crossroads Model. “As we step back and look at more and more market data, we see the early winners and the early losers in the Code Halo story, and we found that they followed a very similar pattern,” notes Paul. “And that turned into the Crossroads Model.

“We looked at the specific phases: trying to understand what’s happening in your market; trying to identify early solutions and begin to pilot those; and scaling them up to begin to compete on data and code and then managing at the ‘crossroads’. Industry after industry, sector after sector, company after company; the more data we collected, the more the model become validated.

“A popular example is to look at Blockbuster Video versus Netflix. Blockbuster had a tremendous market reach, a terrific brand, they had branches all over the place. They had helped, in fact, to create a new business model that allowed private consumers to go and rent videos and DVDs. And they had a terrific amount of data on each of us – what kinds of things we rented, who was late with what and what have you. But they overlooked the potential disruption of a true digital transformation – this is where Netflix came in.

“So, even though Blockbuster had a lot of data, a tremendous customer base and lots of smart people trying to do the right thing, they overlooked the notion of innovation in the physical-to-digital value chain space. And this is the Code Halo story in a nutshell, where Netflix understood very well how they could begin to compete, not only by mailing you a DVD, which was a little bit easier, but also by using the data and information that they’d learned over time to create a better customer experience.

“Now, they’re not just mailing out DVDs, they’re creating content; they have completely different distribution channels. And this goes back to the issue of creating business value. This shows how the move from a physical supply chain to a digital supply chain creates a tremendous amount of market disruption.”

The winners and the losers

So, what’s kicked all this off? Paul cites the development of new technologies and our rising expectations as both customers and professionals. Having an enriched experience at home on a Sunday evening – watching what we like on Nextflix, making purchases from our sofa through Amazon, easily connecting with friends via Facebook or Skype – makes us set the bar higher for our Monday morning at work – and vice versa.

Although there have already been some casualties from companies who have failed to adapt their business model, this market transformation is still in its early stages according to Paul, but businesses can start to get involved as soon as they like.

“[Businesses] can begin to explore and innovate how they can deploy Code Halo thinking right now, today, without a huge amount of expense or a huge amount of time,” he says. “If you ask how to understand and your customer experience better, and improve it – how to process a claim in insurance better and use that as a competitive differentiator or how to do finance and accounting in a much more efficient and elegant way, for instance – leaders can pick up a process and get pretty tactical pretty quickly. They can ask themselves how Code Halo thinking can improve how they work. That’s a great way to start – and they don’t have to wait, they can do that tomorrow.”

It’s important to remember, when looking at ways to use this consumer data, that the notion of trust is an overarching success factor. “In the world of Code Halos, security, compliance and privacy become absolutely central to every conversation,” asserts Paul.

He continues: “It’s building solutions that allow participants – whether it’s a consumer or another business – to opt in or opt out of sharing data; it’s being very transparent in terms of what kind of value you’re giving in exchange for the data you’re acquiring, and asking people to share. That notion of earning and keeping trust in a transparent world, we think, is one of the main things that decision makers should consider when they being to move through the Code Halo journey.”

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