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Business Impact of Design

Business Impact of Design

  • Guidione Machava

In times when technology has become a commodity, design and user experience are increasingly becoming a competitive advantage.

When I was still at university, in my economics course, I learned about Michael Porter and his theories of positioning companies in the market. These then called Porter’s 5 forces.  Porter, a renowned professor at Harvard Business School, managed through a strategic vision to show us the pillars for the full operation of companies, which are: threat of substitute products; threat of entry of new competitors; bargaining power of customers; bargaining power of suppliers, and rivalry among competitors.

This strategic framework studies the forces that influence a company’s ability to position itself in the market in an outstanding way, to serve its customers, and to guarantee high levels of productivity and, consequently, profitability.

Nowadays, with the rapid proliferation of information technology, the adoption of good business practices and the adherence to the digitalization of processes and products have become somewhat of a commodity, and no longer a competitive advantage. This phenomenon in a way makes Porter’s five pillars constantly under threat.

The question that won’t shut up is, “What do we do in the face of this scenario?” Differentiation through design, through customization of the services and products provided are a possible solution to this problem. When companies put design at the foundation of their operation, they make all service focused on customer satisfaction.

Design and its various areas of operation allow companies to identify their customers’ needs beyond the most obvious ones and allow the creation of processes to improve customer satisfaction through customization in continuous cycles.

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A clear example of where design can help in improving the efficiency of standard operation is in the banking sector. Banks for the most part provide similar services with minor variations. But here we have one variable that is unusual for all of them – the behavior of their customers.

Using participatory observation and behavior analysis we can create algorithms that help identify consumption patterns, predict behavior, and make proactive recommendations. These recommendations are based on the user’s own personal history of the service provided by the bank. We thus promote loyalty at the end of the day. Because the bank now holds unique information that is in some ways impossible to copy and difficult to share.

Along these lines, it is important to emphasize the limits of personalization so that it does not transgress the privacy of customers. And achieving this balance between personalization for loyalty and, at the same time, respecting the limits of individual privacy becomes the new challenge for companies that adopt design as their basis for operation.

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