Branding and Promotion Wincor-Nixdorf Branding Essay

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The consolidation of the banking industry forced higher levels of trusted interbank trading and exchanges (Lin, Hu, Sung, 2005) fueled the rapid growth of multichannel banking, thin client technologies including AJAX, JAVA (J2EE) and XML, and led eventually to mobile devices including PDAs and smart phones being able to manage financial queries and transactions (Ho, Mallick, 2010). All of these technologies had taken on immediate and urgent priority by Wincor-Nixdorf's customer base as many are finding a 67% reduction in costs of service when they transition form branches to self-service machines, and nearly a 99% reduction in costs from branches to Internet banking (Ho, Mallick, 2010). In other words the Wincor-Nixdorf customer base was learning very quickly how to translate the advanced technologies mentioned into massive cost reductions very quickly as they capitalized on their customers' needs for more convenient access to the Internet. Figure 2, Index of Banking Services Costs provides a relative ranking of the costs of delivering banking services. With Branch costs being the index of 100% compared to self-service machines at a 67% reduction in costs and Internet banking at a 99% reduction in costs, it is evident that the technologies are having a significant and rapid effect on banking costs.

Figure 2: Index of Banking Services Costs, 2003-2006

Sources: (Ho, Mallick, 2010) (Lin, Hu, Sung, 2005)

This aggressive level of cost reduction occurring in the banking industry is forcing a higher level of intrabank and interbank integration than has ever been the case in the past. This is putting software and systems integration engineering at the center of customer's priorities and leading to the commoditization of hardware alone (Ho, Mallick, 2010).

Analysis

Wincor-Nixdorf must transition from a hardware-centric mindset that seeks to find differentiation purely from one product generation to the next and must embrace a more solution-oriented mindset if they are going to survive these fundamental shifts in their customer base and the industry. Wincor-Nixdorf's hardware ethnocetricism makes the transition form a product feature-based development and selling strategy to a solution mindset extremely difficult (Bushrod, 2003). The cost reductions their customers expect that are attainable only through the development of real-time system integration to make self-service and Internet banking cost reductions possible force Wincor-Nixdorf to abandon the purely product-driven strategy and begin to evaluate software-based and network-based technologies (Lin, Hu, Sung, 2005).

Wincor-Nixdorf over time begins to see how the initial efforts to integrate their POS systems and platforms into banking systems begins to show positive Return on Invested Capital (ROIC) and Return on Investment (ROI) for global customers including Duetshe Bank and HSBC (Meyer, Wolf, 2002). In 2002 the global economy was in a recession, and the investments in Wincor-Nixdorf POS terminals that could integrate into a network helped these customers to attain profitability even in the midst of challenging economic times. Internally within Wincor-Nixdorf there had been debates relative to the strengths and weaknesses of selling more of a network-based POS solution vs. staying with the product strategy-based approach. The political faction within Wincor-Nixdorf that had concentrated on the solution selling imperative won the debate (Bushrod, 2003). As a result a proliferation of POS systems for vertical markets including retailing (Pepe, 2003) was put on a fast track for development. In conjunction with the acceleration of more solution-oriented product lines the senior management teams at Wincor-Nixdorf began to re-architect their messaging to be more service-dominant and less reliant just on products alone (O'Shaughnessy, O'Shaughnessy, 2009). To overcome the limitations in integration between banking and retail divisions, Wincor Nixdorf also started a professional services organization that would work with customers on their business process reengineering requirements (Bushrod, 2003).

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The development of the professional services organization then became the catalyst for Wincor Nixdorf to shift their internal mindset away from being so centered on products towards being more focused on integrated systems and solutions.

Customer relationships shifted from being focused purely on hardware sales to gaining a better understanding of the business problems customers faced. The shift from being inwardly focused on products and more on the business goals and objectives of their customers shifted the priorities internally within Wincor Nixdorf to valuing integration skill sets and intelligence (Damiano, 2008). Managing solutions became more critical than speeding through the next product generation and attempting to leapfrog competitors on features alone (Amato-McCoy, 2008). The focus had become how well the professional services organization could coordinate with the banking and retail product divisions to attain a suite of enterprise solutions for clients.

Wincor Nixdorf took years to make the transition from being product-centered to being solution-focused. The myriad of decisions that had to shift the company's product, services, selling and deployment models to being focused on streamlining and strengthening customers' strategic processes over time were successful. Literally betting the company on the shift from product-centric mindsets of a solution mindset, the company emerged after its transition period more trusted based on its depth of process expertise. The essence of being a trusted advisor is the ability of an organization being able to internalize the problems of its customers and transform them into solutions through intelligence, insight and innate strengths of their organization (Dawson, 2001). Nearly every services-based company will eventually attempt to create a trusted advisor market position for themselves in the it banking and services industry (Ho, Mallick, 2010). Trust is only attained when an organization creates an organizational structure that is highly coordinated all around the customers' needs (Storbacka, Ryals, Davies, Nenonen, 2009). This requires any organization to become agile and capable of scaling their internal departments, experts, systems and expertise to the unmet needs of customers. Only when this is done can a company hope to attain the role of trusted advisor and be a meaningful brand (Rahman, Areni, Mcdonald, 2009). As a result of the success Wincor Nixdorf had with this transition to being more focused on customers' business processes and not just on their hardware requirements, they were able to create global alliances (Bruno-Britz, 2008) including FedEx and Kinko's and several focused on solutions management including world-class system integration partners (Amato-McCoy, 2008).

Conclusion

The transition Wincor-Nixdorf experienced, transitioning from being a box mover to concentrating on services and solutions to eventually become a system integrator required the subordinating of technologies to customer needs. The focus had to completely change from having products at the core of their business to being solution focused. To aspire and attain the role of trusted advisor (Dawson, 2001) technologies need to be subordinates to serv8ices and solutions for the customers first. This is the transition that Wincor-Siemens has attained and today uses advanced POS technologies including RFID to better manage the larger process areas for their client first, not just to sell more terminals and hardware (Resatsch, Sandner, Leimeister, Krcmar, 2008). Figure 3, it Services and Business Process Services illustrates in depth the transition that Wincor-Siemens has had to accomplish to move away from being a product-centric to solution-focused and attain the role of trusted advisor.

Figure 3: IT Services and Business Process Services

Sources: (Ho, Mallick, 2010) (Lin, Hu, Sung, 2005) (Amato-McCoy, 2008).....

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