Customer Requirements

In a process management context, the term “customer” refers to a party receiving the outputs of the process, regardless of the commercial or contractual arrangements surrounding the transaction.

It is a given that the purpose of the process is to create outputs for the benefit of some customers. It is surprising how often those working in and on the process have rather ill defined awareness of who their customers are, and what those customers value. Even management consultants have challenges in this respect.

The objective here is to gain clarity about whom the process serves, and what it needs to do to achieve its purpose of satisfying each of these customers. 

Customer Types

customersLet's think about the outputs from our process.

The red arrows link to two external customers - consumers (individuals) and businesses. There are also red arrows to two internal customers - one receiving your product or service as "finished goods" and the other as inputs to a process for further work. The red arrows thus depict direct customers.

The blue dashed lines connect our process to indirect customers, who are affected “further downstream” by the quality of its outputs. We don't have total control over what the end customer receives, although our process may be critical to the final outcome.

We need to consider the requirements of both direct and indirect customers.

Note that external customers have an arms length relationship to our process whilst internal customers are within the same organisational entity. If you are not sure if the customer counts as internal or external, the exchange of money is often the give away. Logically, there is no difference in what we do for these two types of customer, but from the point of view of contractual obligations and the way in which we communicate, the approaches might be very different.

Finally the dotted line shows where outputs from our process need to satisfy the requirements of external authorities, whether for privacy considerations, financial compliance, occupational health and safety, environmental issues etc. Whilst these authorities are not the reason for the process's existence, failure to comply with their requirements can be a show stopper, so the requirements need to be identified and satisfied.

kano

Types of Requirement

Customer requirements may be categorised using the Kano framework, shown at right, which considers three categories of requirements according to how the customer feels about the degree to which the requirement is fulfilled:

  • “must have” requirements, which are central to the customer value proposition;
  • “wanted” requirements. which have some sense that “more is better” (speed, size, whatever) and
  • “delight” requirements, which uniquely satisfy the customer by in some sense delivering more than was expected.

The process manager’s task is to maintain and improve the process to deliver on the promise that the marketing people have made to the customer. General management must balance the promise with the capability to deliver on it.

For business to business processes, operations management needs to know exactly what is written into the contract - these will be the "must have" characteristics that are non-negotiable for satisfactory performance. You may need to review with your customer the operational definitions for these requirements, i.e. exactly how they are measured, what exclusions apply, etc.

If you don’t have a clear view of what your customers need, want, and value, you will be guessing as to where you should assign your process management and improvement resources. The fuzziness of customer requirements is one source of the variability that drives up process costs.

Whilst we recommend getting close to your customers to understand how they value your process, we advise that you do not do this until you have developed a reasonable understanding of the capabilities and problems of your process.

Note that the same logic that applies to your dealings with customers applies to your suppliers’ dealings with you. You need to be able to articulate clearly to your suppliers what your requirements are, and to ascertain their capabilities of meeting your requirements.