CIO best practices
Editor Joe Stenzel has brought together a group of experts to contribute their perspectives on CIO Best Practices. Michael Hugos talks about "Harnessing IT to Drive Enterprise Strategy", Paul Niven presents "IT Performance Management using the Balanced Scorecard", and Gary Cokins writes about "How to measure and manage customer value and customer profitability" just to mention a few of the contributors.
One of the knowledge nuggets of this book which I liked best was the topic of balancing shareholder value with customer value (p. 260-267). At the core are the questions "How much should we spend attracting, retaining, growing, or recovering each targeted customer segment? and "What impact do I get by spending an extra dollar or Euro on each customer or by reducing that planned spending by an exra dollar or Euro?". The KPI of customer loyalty is an important ingredience because the degree of loyalty directly influences the amount of spending that may be required to retain the customer. Gokins develops a chart based on the two dimensions customer value (high ... low) and churn score (loyal ... not loyal) which helps to decide about the appropriate amount of spending. The controllable variable in this case is spending.