Siemens: A Customer-Driven Refresh

After five years in a declining market, Siemens Enterprise Communications took the bold step of rethinking its approach to market data to focus more on customer needs.

Ellis Booker, Technology Journalist

August 9, 2013

4 Min Read

What will enterprise communications look like in the future? For Siemens Enterprise Communications, a $ 2.8 billion joint-venture company carved out of 160-year-old Siemens AG, this had become an urgent question.

Although Siemens Enterprise Communications has more than 1 million global customers and coverage in 75% of Global 500 companies, it faced challenges. "Our business had been declining 5% to 10% for five years," said Chris Hummel, the company's chief commercial officer and president, North America. With an eye on achieving sustainable double-digit growth in the future, Hummel said, the company embarked on a multi-year initiative to better tie its product development and marketing to the real-world needs of customers.

Hummel was among several high-level marketers presenting at Frost & Sullivan's annual Executive MindXChange last month in Boston. The event attracted about two hundred B2B executives and vendors of marketing solutions.

[ Want to sharpen your business and communications skills? Check out this reading list: 5 Books For Aspiring CIOs. ]

During his remarks, Hummel revealed the company will rebrand in October with a new, yet-to-be-announced name. "But I tell people I've been rebranding for three years," he said.

An essential part of preparing for that brand re-launch has been a soup-to-nuts look at how the company collects and analyzes customer and market data. "The fundamental idea was to move from being an engineering-led to a market-led company," Hummel told InformationWeek in a phone call.

Like other B2B companies, Siemens Enterprise Communications faced a number of tough challenges, ranging from a product lifecycle that was too technology-focused to not enough intelligence about its global market and customers. An initiative, dubbed "Market-Driven Company," was created to address that. Specifically, the Siemens unit has formalized a virtuous cycle involving product development, market intelligence and a go-to-market (GTM) approach. The goal? To stop fragmentation in both its product portfolio and marketing campaigns.

An essential part of the initiative was an infusion of new customer and competitive information. "Traditionally, a company will look at market-size data, look for the segments that are growing or shrinking, and target the growing segments," Hummel said. "But we wanted to enrich by actually going out and looking at how customers were using technology, not just what they were purchasing."

So Siemens did its own original research, creating organizational personas. It used direct research, focus groups and surveys as well as interviews with customers and prospects. "We asked what the ideal solution would look like, and then we measured how well we and our competition stacked up against this ideal," Hummel said, adding that this qualitative exercise revealed opportunities for where more customer value could be delivered.

Interestingly, while Siemens searched for software solutions to aggregate all this research and data about markets and customers, it didn't find one single platform that could do the job while also plugging into its existing product development, portfolio planning and product marketing systems. "We said, the first thing is to collect the data, and worry about automation later," Hummel said. For now, separate spreadsheets, databases and statistical tools are used to pore over the new data sets.

Another innovation was the creation of a portfolio management board responsible for prioritizing the company's investments based on the various market and customer data findings. The board, which Hummel chairs, includes participation from the company's CEO and CFO, as well as the heads of products and services. It meets every four weeks, for two hours.

Meanwhile, Siemens' search for software to answer its own needs led to a major insight about the market, specifically about the need for an enterprise-class unified communication platform that could offer persistent collaboration spaces and social-business capabilities.

Enter Project Ansible, which will see general availability in the middle of next year. The product will bring what Hummel calls "real-time engagement" and offer a way for enterprises to aggregate content, content and conversations and weave these into a business process.

Hummel said Ansible has become a rallying cry inside the company, the manifestation of a new approach to product development -- one that doesn't simply make incremental improvements on existing products but creates entirely new and valuable product categories for yet-untapped customer segments. (Siemens sees a chance to grow from 40 million users worldwide to 400 million in the future.)

That's not to say the data-driven effort and cross-functional organizational changes it necessitated have been easy. "You need to understand the turbulence this is going to create, and manage it," Hummel said.

Still, he's enthusiastic. "Through this process, we rediscovered what was possible. A lot of things still need to be done, but we're at a point where we think we can pick up momentum."

About the Author(s)

Ellis Booker

Technology Journalist

Ellis Booker has held senior editorial posts at a number of A-list IT publications, including UBM's InternetWeek, Mecklermedia's Web Week, and IDG's Computerworld. At Computerworld, he led Internet and electronic commerce coverage in the early days of the web and was responsible for creating its weekly Internet Page. Most recently, he was editor-in-chief of Crain Communication Inc.’s BtoB, the only magazine devoted to covering the intersection of business strategy and business marketing. He ran BtoB, as well as its sister title Media Business, for a decade. He is based in Evanston, Ill.

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