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Voice of Business (VOB) - is a tool that captures the stated and unstated needs of the shareholders/business owners. Business scorecard is a very commonly used tool to capture VOB. E.g. profits, viability of business, cost reduction, dividend pay-outs, return on equity etc.

Voice of Customer (VOC) - is a research tool that captures the stated and unstated needs/requirements of the customer. Interviews, focussed group discussions, surveys, observation, warranty data, complaints are some of the ways in which VOC can be captured.

 

 

An application oriented question on the topic along with responses can be seen below. The best answer was provided by Venugopal R on 6th November 2017. 

 

 

Question

Q 38 - While the Voice of Business is supposed to be in line with the Voice of Customer, there are some valid reasons that make them go against each other. What are some of the most common reasons that create a conflict between VOC and VOB?

 

Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday.

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The Voice of Customer (VOC) is one important element during the Quality Function Deployment exercise. VOC includes stated and implied requirements of the customer. The QFD helps in ensuring that all the elements of the VOC are addressed by the process and also provides a quantitative expression as to how much of each characteristic is addressed by the associated process / process steps. The Critical to Quality (CTQ) characteristics are also identified and subjected to the extra attention and care required from the process.

 

The Strategic Business Objectives form one of the key starting points for the Policy Deployment exercise as part of Business Process Management. Here the Voice of Business (VOB) forms a key input, being the primary need of a business and its stakeholders, including profitability, revenue, growth, market share etc.  
 

Some situations where we encounter conflict between VOC & VOB

 

1. Pricing of a Product / Service:

This is one of the commonest factors where the VOC and VOB will undoubtedly have very strong negotiations. VOB will seek to maximize the margin of profits, but will have to maintain competitiveness. VOC seeks to get best price and this expectation will get calibrated by comparing with the prevalent competing offers. Here, one of the most important term that is used by VOB is that we should ensure that customer gets “Value for Money”. I would like to state the quote I picked up from one of my mentors “When we provide a product of service worth Rs.1, the customer should end up feeling that they obtained a service worth Rs.2”. However the same leadership also expects the VOB to be fulfilled. This is the challenge.

 

2. Quality requirements:

For industrial products, Quality requirements are expressed quite clearly and in detail through specifications, drawings and standards. In the case of consumer goods and durables, Quality standards are set by the manufacturer based on various inputs from market and focused customer groups and past customer feedback. In the case of service industry, Quality requirements are expressed as part of service level agreements and are likely to be quite voluminous and subject to higher interpretation variations.

 

Conflicts arise when interpretation variations and alterations crop up in quality expectations, especially after a contract is signed off. The VOB is likely to raise concerns relating to the feasibility of agreed pricing and delivery times, if there are differences in the Quality levels initially agreed. Close involvement of all concerned stakeholders, transparent discussions are key to reach a consensus.

 

3. Scope creep:

Scope creep refers to changes, continuous or uncontrolled expansion in a project's scope, at any point after the project begins.  To a large extent businesses will accommodate changes that creep in after the initial agreement, honoring the customers’ needs and considering long term relationships. However, beyond a certain point of time, the VOB is likely to raise questions upon accepting such scope changes without reviewing or revising other contractual agreements. Again, the fairness of the expectations would also have to be seen, considering the competitive offerings available to the customer to strike the right balance between VOC and VOB.

 

4. Overbooking:

This situation is commonly seen in flight bookings where the airlines tend to overbook in anticipation of certain amount of last minute cancellations.  The VOB wants to maximize capacity utilization as much as possible. Sometimes, it results in some customers with valid reservations to go without seats. Although the airlines try to compensate by providing accommodation and other benefits, not every customer would be happy about such deprivation. The same analogy may be made for other businesses, where anxiety of not losing the order could trigger over commitments, but sometimes end up with under delivery. The ‘over ambitiousness’ of VOB rubs VOC.

 

5. Forecast vs Actual:

There could be cases where we have an ongoing customer contract for which a monthly forecast would have been provided by the customer to their vendor. It could be an Auto manufacturer giving a monthly forecast to supplier or it could be a Health Insurance company providing forecast for claim volumes to be processed every month. The vendor invests and plans capacity, hires resources and sets up equipment as per the forecasts. Where the demand exceeds the forecast for a particular month, it puts the vendor under pressure and where the demand falls short of the forecast, the vendor suffers capacity utilization. Such conflicts are seen between the VOC and VOB.

 

If the vendor, as part of their business do their independent homework on the market / customer trends, apart from the forecast provided by the customer, they would be able to apply realistic flexibility on their plans and investments.

 

6. Change requests:

Change requests from customer for a running business could require investments from the supplier organization. Carrying out changes in a running business may not be very easy, without disrupting the flow. Change management system has to ensure that the effectiveness of the change is ensured, at the same time no adverse impact is resulted. The VOB may sometimes find it tough to accept the demand of the VOC, but considering the priority for an existing customer, will have to take risks and yield.

 

Elaboration of the change management related terms and conditions in the Service Level Agreements could help bridge such expectation gaps between VOC and VOB.

 

7. Long term business interest:

Several situations would require the VOB to adjust itself consciously considering the long term business relationship with a customer. For instance, if we are provided multiple business accounts by one customer with varying profit margins, we might consciously undertake with discretion, to serve some business accounts that may not be profitable at all. Such decisions are taken in the larger interest of maintaining the overall set of accounts in the long term. The P&L heads for such accounts will feel the conflict between the VOC and VOB.

 

Appropriate prior communication and involvement of such P&L heads in such strategic discussions would help ease out these situations.

 

8. Moments of truth:

Moments of Truth (MOT) is a phrase that refers to instances where the customer is provided an opportunity to form / change his/her impression about the company (or service provider). These could be very customized instances to deal with unique situations with customer; and sometimes one may have to deviate from the usual VOB. I can recall one instance when I had to be bold enough to host a customer, very upset due to product performance, to my organization and give him an audience by key functions in the organization and get the product fixed right in his presence. This is not an activity that is normally permitted and obviously cannot form a precedence; neither was I authorized to do so. However, it worked magic with the customer whose impression was transformed and it also helped to gain a sizable order. 

 

Hence, MOT is something every organization needs to sensitize its employees, and should have a way of getting it exercised with employee discretion, when a situation demands, although it may temporarily appear as a conflict between VOC and VOB.

 

9. Competitive rivalry, predatory pricing:

These wars are common especially with consumer products and services. We do see competing companies, usually large organizations with multiple business lines, offering what appear to be unreasonably low prices for selected products / services, to rapidly gain market share. This puts huge pressure on the VOB for the smaller organizations that are more dependent on that particular line of business. It is very important not to falter on addressing the VOC under such circumstances. One has to be very patient, but focused on providing the best value to the customer, who finally takes the call.

 

To conclude, both VOC and VOB and very important for the successful sustenance of a business. While the intention of VOB is to satisfy the needs of VOC, sustenance is possible only with business growth. So long as the ' VOC vs VOB'  conflicts help in constructive decisions and strategies, it will be Win-Win in the long run.

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VOB and VOC – Unity in Diversity?

VOC and VOB contradicting one another is almost normal and par for the course for most organizations. Only in those organizations in which a different approach to work is not just known or implemented, but institutionalized in the real meaning of the word and embedded in their DNA, does the VOB have even a slim chance of being close to the VOC. This is simply because, by definition, any business or organization wants its own lot to get better – be it market value or revenue or profits or reputation , which is exactly what their customers also want, but for their own organizations.

 

Thus, the supplier organization works for itself, while the customer organizations work for themselves. In this scenario, is there really any surprise that the VOB and the VOC are at loggerheads or at least not quite synchronized? After all, how many organizations have their Mission on the lines of “Helping our customers achieve their Mission” or “Grow with our Customers” etc.

·         How many organizations practice this philosophy?

·         How many organizations institutionalize this approach and strategy?

·         How many organizations train all their staff to think this way?

·         How many organizations embed these thoughts, words and deeds in their DNA?

 

A closer look at the inevitable dichotomy

What the supplier organization wants and what its customers want can be generally summarized as under. It can be noticed that the two are mostly contradictory.

 

Sr. No.

Supplier

Customers

Remarks

1

Higher Sales Revenue

Reduced costs including outsourcing costs

Supplier’s revenue comes from customers who want to reduce their cost by paying suppliers less

2

Reduced costs

Best service from Suppliers

Suppliers reduce costs by eliminating perceived NVA which could actually be a differentiator for the customer

3

Increased profits

Increased profits

Increased profits for their own organizations

4

Increased volume commitment from Customers

Balance risks by having alternate suppliers

Suppliers need assurance of an increasing volume, while customers prefer to split their supplies and thereby the risk between more suppliers

5

Steady volume from their Customers for leveled production and cost optimisation

Supplier capability to ramp up and / or down depending on the market demand without any extra cost

To optimize costs by leveling, Suppliers need a less fluctuating order from Customers, who expect their supplier to be capable of increasing their capacity at short notice if the market requires it without any cost implications

6

Stable requirements for planning, training and executing production and quality assurance

Flexibility for multiple product types depending on the market demand, new products etc.

To avoid changeover delays and costs, Suppliers want their product specifications to be frozen by their customers, who want their suppliers to supply a variety of products with no or little cost impact

7

Periodic price increase from Customers to counter inflation

Periodic price reduction from Suppliers as they should have become more efficient with time

To manage the increase in costs which are beyond their control, the suppliers want a consideration from their customers, who on the other hand expect their suppliers to become more efficient with time and pass the benefit to themselves

8

Controlled investment in production facilities like equipment considering market fluctuations

Use of the best facilities for delivery all the time

With markets being unpredictable, suppliers are hesitant to make any quick investment decisions w.r.t. (say) equipment, while customers expect the best equipment to be used for the products delivered to them

9

Pricing structure for value-adds which they supply themselves or when they exceed requirements

Value-addition is expected and an implied requirement and needs to have its cost blended with that of the base-product  and not as an extra cost

Suppliers expect the value-adds they give their customers to be remunerative while the customers expect all such costs to be absorbed within the base rates agreed

10

Some reasonable tolerances in specifications of products

Strictest adherence to specifications

Suppliers want a tolerance in product and component specifications commensurate with the rates, but customers expect complete adherence to specifications which they feel are driven by the end users

 

Reconciling the differences

We saw earlier why the VOC and VOB are inherently in conflict almost by rule rather as an exception. The reasons for the same are also generally well understood by all organizations but unfortunately accepted by these organizations as fait accompli and something that cannot be negotiated.

 

To break this invisible layer of ice, both the supplier organization and its supplier organizations need to make certain bold changes in their approach. The supplier organization that wishes to synchronize its Voice of Business to the Voice of Customer needs to take the first step. The organization needs to, in a controlled and perhaps, exploratory manner, be willing and also be seen as willing to link its future with that of its customer.

That the supplier organization states its intention to align completely with its customers need be seen neither as a “surrender” to its customer nor does it restrict its independence. It merely signifies the maturity of this supplier organization.

 

Now it is the turn of the customer organization to hold and seize the opportunity afforded by its supplier to become more than a supplier and be its supporting and reliable partner in its own growth. When the two tango, all points of differences become opportunities for total alignment as described below. Then VOB will echo the VOC.

 

Sr. No.

Aligned Supplier – Customer Win-Win Combo

1, 2, 3 and 4

Revenue, Costs, Profits and Volumes

 

The Customer publishes his business plan with appropriate representation of the supplier, who then aligns his business plan accordingly. After discussions and changes where required, the volumes to be supplied, the cost of the work outsourced or parts purchased, the revenue share of the supplier, the profit margin, the BCP arrangements by the Supplier to reduce the risk to the customer etc. are all agreed to mutual satisfaction. The Supplier is free to further implement improvements, reduce his costs and increase his profits and also attend to other customers as required.

5

Leveled production

 

From the business plan of the Customer, a clear understanding of the end-user market is obtained by the Supplier, including possibilities of spurts and drops, seasonal variations, event-based variations etc. The cost of the additional investment the Supplier needs to make e.g. overtime, sub-contracting etc. while still remaining Lean and clear of the Seven Wastes is agreed to and the annual plan is leveled.

6

Stable Product Specifications

 

An improved understanding of the end-user market and potential new products, global market trends etc. keep the supplier in a better position to fine tune his changeover strategy and remain alert and prepared for new requirements at short notice. The investments required for this are adjusted against the additional business the customer agrees to give after the new product is released.

7

Cost Trends with Time

 

A medium term memorandum of understanding factoring in known causes of increase in cost and leaving options open for unknown causes in case they happen as well as the improvements in planning and order execution, leading to improved efficiency and costs  is signed by the Supplier with the Customer. Basis this, the pricing strategy in the medium term is agreed to that satisfies both possibilities of increase and decrease in costs.

8

Investment Commitments and Volume Commitments

 

With a better understanding of the market in 5 and 6 above, it is easier for the Supplier to come to an agreement with the Customer on the additional capacity requirements, modernization of production facilities, etc. and the investments therein and also considering the agreed pricing strategy.

9

Value-addition and charging for them

 

The edge given by the value-adds to the customer in satisfying the end-user is discussed and those priced value-adds and the complementary value-adds are both signed off.

10

Specification tolerances

 

The exposure of the Supplier to the final uses and application of the product helps the Supplier propose a realistic set of performance and functionality tolerances that do not impact the customer’s market reputation and or the end-user’s satisfaction. Moreover, with the new equipment to be invested in agreed to in 8 above, improved process capability would become a reality.

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Companies carry on business in order to earn profits but this should not be done at the cost of customers. The same concept applies to the customer as well. Customers want best products at the lowest prices which may not be possible for Companies to provide without going bankrupt. So VOC (Voice of Customer) and VOB (Voice of Business) should be looked at and matched so that they work in conjunction with each other and processes are mapped and full value delivered to customers.  A comparison chart is provided below to bring out the similarities and differences in the 2 concepts:

S#

Parameters

Voice of Customer

Voice of business

1

 

Definition

 

The Voice Of the Customer are the needs, wants, expectations, and preferences, both spoken and unspoken, of business’s customers, both internal or external. 

The Voice Of the Business are the needs, wants, expectations, and preferences, both spoken and unspoken, of the people who run the business.

2

Examples

Fast 24x7 service to customers, no down time

revenue, growth, market leadership

3

Procurement

Reactive or  Proactive method with customer surveys, customer interviews, market research, release evaluations, feedback forms

Financial and market data analysis, competition analysis, employee surveys, 

4

Tools usable

Surveys, Kano analysis & CTQ

KPIs  like ROI, % income from returning customers, shareholder equity

5

Usage of data

·         Modify products.

·         Modify processes.

·         Finetuning Business strategy

·         Identify opportunities

·         the internal processes needed to support the processes

·         To ensure zero defects, zero waste, employee motivation

6

Metrices

·         release evaluations,

·         customer satisfaction scores

·         Net Promoter Score

·         product delivery times

 

·         employee satisfaction

·         employee turnover

·         number of defects

 

The manner in which one collects, analyzes and deploys the results of VOC and VOB depends largely on the application and how one wants to use the results and which business decisions one wants to drive and what kind of organizational outcomes one expects.

Project management struggles with time, cost and resource management challenges. With many projects under evaluation, it is difficult to isolate information and inputs from the various voices. Identifying which project will meet business objectives requires deep level of visibility of the key influencers. Approach taken by project managers of focusing on optimizing business outcomes enables business to improve their bottom lines. . Examining the gaps and overlaps among VOB & VOC, identifying strategic direction and change that is rational and data based ensures positive ROI as a result of the changes. Staying tuned to the inputs received from customers and business will go a long way to achieving growth in business.

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Process voice

Process Voices captures the four distinct “voices” for any given process.

The Voice of the Business (VOB) reflects the needs of management.

The Voice of the Employee (VOE) relays what it feels like to work within the process.

The Voice of the Customer (VOC) details the needs of the end user

The Voice of the Process (VOP) lists the waste, rework and other observed process issues.

(refernece : goleansixsigma website https://goleansixsigma.com/process-voices/)

 

When we drill down only to VOC and VOB further down

The voice of the customer identifies needs and requirements of customer

The VoC gives the following aspects for the study of

  • Affordability
  • Need and expectations
  • Accuracy
  • Responsive
  • Flexibility
  • Friendliness
  • Convenient

The voice of the business is derived from financial information and data. 

The VoB gives the following aspects for the study of

  • Process complexity.
  • Strategic Direction of the business
  • Financial capability
  • Market share and its weakness
  • Utilization of investment capital
  • Research and development status
  • Production environment and conditions


And when we study VOC we also work on KANO model where We check for BASIC need of the customer, What our Product satisfy the need and When the customer is Delighted (delighted feature)

1)every patient to be treated immediately once he enter the hospital with in 15 min of entry (foot count is 10 patients per hr ) there are 2 doctors only and the Average time to diagnose is 10 min

in the above case The foot count ratio to diagnose time and no of doctors create a perfect equilibrium, but when it comes to the Goal of within 15 min may not be addressed if foot count is all patients come in 1st 10 min of the hr and here we are  talking about Averages

Here VOC of service of delight within 15 min May become a conflict to address this The Business cannot add equal number of doctors to equal number of patients for various reasons.

This may also result in poor feedback from customer with the delight expectation and waiting time 

Many examples can be made such as

1) Medicine should be sweet for Patients but Due to the ingredients of chemical composition Business cannot make the Medicines sweet

2) Cost of Service to be cheaper in Hotel but Business needs to cater many other needs which make it costlier including profit margin

3) Food should be served Hot in Fast food during winter/rainy season (pizza Delivery) but business cannot put a hot oven while transport and deliver HOT due to its infrastructure, working model and costing needs 

4) Reaching destination in Fastest Possible time at average 60km/hr but there are problems with Vehicle max speed and cost to power ratios, quantity and mode of transport.

 

The funny VOC to VOB is in organisation conflicts between boss and employee

Boss orders the employee at 6.00pm Today that he needs the presentation by morning 9.00am tomorrow

at the same time The presentation should have 6 days of data to be recorded for which the process implemented yesterday. Which result in a conflict of process, process environment, expectation and need of Customer (BOSS)

Edited by Harsha Subbanna
foramat

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Sometimes Voice of Customer and Voice of Business may be conflicting. One of the most common reason of conflict may be price. A customer wants best quality at lowest price whereas the business has to earn profit to survive in the long run. Hence price is obviously a conflicting issue between customer and business interests.

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While there are needs and wants of two parties to adhere to, it’s extremely important to synergize both the concepts with the company's strategy, considering the below conflicts between the two concepts.

  • While Business’ need is sustenance, revenue, and growth, customers’ need is best/wow products for cheapest price, which can cause a Business bankruptcy.
  • While VOB is derived from financial and market data analysis, VOC is derived from surveys, interviews, feedback form and meetings.
  • While VOB is from process partners , VOC is from end users.
  • While VOB has target lines (profitability, revenue, growth and market leadership), VOC has specification limits (release evaluations, product delivery timelines, customer satisfaction scores, and net promoter Score).

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While the Voice of Business is supposed to be in line with the Voice of Customer, there are some valid reasons that make them go against each other.

 

VOC or voice of customer talks about customer expectations while VOB or voice of business talks more about the stakeholder's expectations. Thus, the approach is different while capturing the information for both scenarios. Even the purpose for which the data is used are different for the 2 approaches.

 

VOC data is used for reasons like:

  • Altering products or services.
  • Making process more effective
  • Removing non-value added steps

VOB data on the other hand is used for:

  • Capacity planning.
  • Cost reduction
  • Introducing new products and services.

So this implies that whatever the business thinks or wants to implements, may or may be not be in line with the customer expectations and hence can be one of the most common reasons that create a conflict between VOC and VOB.

 

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Hello All, First to explain on VOB and VOC,

 

The Voice Of the Business are the needs, wants, expectations, and preferences of  the people who runs the business itself like board advisors, Board members, Investors, Leadership/Executive teams. Examples where the voice will be captured are Account planning meetings, Revenue review meetings, board meetings, ISAT etc., VOB data can also be obtained from financial and market data analysis, competition analysis, employee surveys. predominantly the motive will be on increase profitability (Gross Margin, Operating Income) or top line : Revenue. 

 

The Voice Of the Customer are the needs, wants, expectations, and preferences of business’s customers, Clients, End users who pays for the service/product which they are consuming. Examples where the voice of customer will be captured are during Customer review/governance calls, Net Promoter Surveys, CSAT's, Market Research, Stand-up meetings etc., Predominantly their needs will emphasize on Quality, Time to Market, End User adaptability etc., 

 

How do they Compete:

So we have the needs and the wants of two stakeholders to adhere to. The  organization is doing business to sustain, to make profit, to accomplish a greater goals but this cannot be done at the cost of the customers. The same counts for the customers, they want the best products for the cheapest prices: how can the company deliver without going bankrupt?

 

Because of the two angles, the VOC and VOB should always considered together. It’s up for the company to take up the challenge to find the match, the synergy between them.

That’s why it’s so important to link concepts like VOC and VOB with the company strategy. Why does the company exist? Who are our customers? What do our customers want? And when are they satisfied and dissatisfied?

Image result for VOB and VOC

I would like to call out an example from One of my Past employer. They got into a mutual agreement with his "permanent" Client, that I would be giving 10% of productivity improvement in turn You should give 20% of business growth YoY. by this way both the organization and the customer are dividing the improvement benefits. Let us say in FY '16, if they have 1000 FTE's as base the organization will give 100 (10%) as a productivity improvement for FY '17 and in turn the customer will give 200 FTE of new business at the end the business growth would be 10% YoY. This makes both the parties as winners. The deal will go of on a mutual agreement until the customer finds his business growth as rapid. 

 

Both Organization and customer can take any of the place in Primary or secondary Goal but for any improvement projects both should be benefited which will have their relationship as long lasting. If it the project results in One gain and One Lose,  the relationship will not last long.

 

 

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Voice of Customer is the spoken and unspoken voice of internal or external business customers. Whereas Voice of Business is spoken and unspoken voice of people who constitute the business like shareholders, corporate governance etc. Key conflict of interest arise as business focus on profit on long term basis whereas customer look for best products at lower costs. Reason of this gap also will point to lack in focus on customer and business perspective as part of company’s strategic planning. In case of well-established business there is more chance of this disconnect happening as there is more chance of business relaxing on the alignment to need of customer. Another scenario where the conflict of interest may happen is lack of business to catch up with technological advancement, which leads of lack of focus on this in strategic goals, which will surely leave customer behind.

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VOC

VOB

Full Form

Voice of Customer

Voice Of Business

Definition

Stated and unstated needs or requirements of the customer.

Customer can be internal as well as external

Stated and unstated needs or requirements of the business/shareholders

Examples

customer satisfaction scores,

product delivery times,

TAT ( Turn around time)

TPC ( Total Production Cost)

ROI (Return-On-Investment)

IRR %

Market Share%

No. of new product developed

 

How to get the needs

KANO Analysis,

Direct discussion or interviews

Surveys/market research,

Focus Groups,

Customer specifications,

Field reports,

Complaint logs.

Derived from financial information

Competition investigation

Historical data

Other sister companies in other countries

Board meetings

 

 

Hot to use those information

Modify or discontinue products.

Modify processes.

Attune business strategy.

Identify opportunities for

 

Market weakness,

Utilization of investment capital

Research and development status

Ensure business growth

 

 

While the Voice of Business is supposed to be in line with the Voice of Customer, there are some valid reasons that make them go against each other.

We as a company run business to make profit, but at the same time we should not ignore voice of customer. Because at the end if customers are not satisfied we lose business.

 

Example:-

For a Fries manufacturer, VOC is that they don’t want any defect in the fries. (Defect:- natural defect that comes with potatoes, ex potato skin, potato stem)

At the same time VOB is to keep out TPC( total production cost) down.

As a producer we can adjust our process such that there is no defect in the product. But to accomplish that we need to run our process slower so that our defect removal system works at 100% efficiency.

Another option is to invest in adding defect removal capabilities.

In this case as a producer we have to balance between the two VOB and VOC.

 

 

 

 

 

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To identify impactful continuous process improvement activities , the team should listen to four “voices”. These are:

 

Voice of Business (VOB)

It denotes the needs, wants, expectations and preferences of the business itself ( or the shareholders, owners, investors of the business)

It is obtained from analysis of Financial, competitive and market data.

It helps to identify and prioritize future projects and services for revenue growth area, economic value added and market value in line with the strategic goals and objectives of the business.

Example KPIs / Metrics are: ROI, shareholder equity, stock prices.

 

Voice of Customers (VOC)

It denotes the wants and expectations of business customers (internal and external). It indicates those aspects of the product/service that the customer perceives as “value” and is willing to pay for.

 It is obtained by observing customer behavior, taking customer satisfaction feedback and analyzing customer complaints.

It helps to identify and differentiate between Value add and non-Value add process steps, strategize products and value-added services, modify or discontinue ongoing projects/processes.

Example KPIs / Metrics are: release evaluations, customer satisfaction scores, product delivery times, help desk support calls.

 

Voice of Process (VOP)

Based on VOB and VOC analysis processes are classified and categorized. It improves the efficiency of processes that drive daily business and helps in categorizing them as high-value (priority) and low-value (non-priority) processes. Customer input provides insights into those processes that are most closely related to providing the products and services that they need, and it helps create the basis for project selection.

VOP denotes the performance of a process over a period. The VOP should be within limits defined by VOB and VOC.

 

Voice of Employee (VOE)

VOE is critical for the sustainability of the business. It shows the synchronization and coordination between management and workforce in aligning the daily task and activities to the final goal and objectives of the organization.

VOE is linked to VOP in that problem areas and improvement opportunities can be identified.

VOE can provide valuable information related to resources, costs, talent, processes and solutions that could provide strategic direction.

 

Amongst these, VOB and VOC are mostly independent, while VOP and VOE may have linkages and depend on VOB and VOC. Since VOB and VOC are voices at opposing ends viz. producer and consumer, many times there can be conflicts between them.

 

Possible Causes of Conflicts between VOC and VOB can be understood looking at few conflict scenarios:

 

1.       Cost:

VOC would require maximum/best services and products at minimum/cheapest cost.

VOB would dictate that the business to sustain and provide share holder value has to make profits from its products and services. The business must find innovative ways to create the balance i.e. satisfy its customers while maintaining its profitability and not becoming bankrupt.

 

2.       Product/Service Features and functionalities:

For any product/service VOC would indicate the Needs, Wants and Desires (Kano Model) of the customer.

VOB would help decide what features/functionalities can be provided in a product/service in a profitable way. Example: In hotels, customer’s might have an expectation regarding the variety and quality of the complimentary breakfast, but VOB would dictate what the hotel can afford as complimentary which could be either less or more than the customer’s expectation. This gap between VOC and VOB could cause a conflict (dissatisfied customer) or leave the customer in a WOW state.

 

3.       Complaint resolution:

VOC might indicate that the time taken for resolution was too long and the time committed for resolution was not adhered to. Also, there was no proper communication regarding the resolution.

VOB may indicate that customer’s impatience, and lack of clarity or wrong header/sub-headers in the complaint was the cause of delays. Moreover, non-availability of the customers at the provided contact info lead to communication gap and further delays.

 

4.       Defects and Bugs (especially software services):

VOC calls for additional staff count because of increase in defect back log and defects getting pushed to future release compromising some features that were also pushed to future release.

VOB calls for Defect back log to be cleared without additional staff count as it would increase the cost.

 

5.       Repairing Services:

VOC might call for a manufacturer to provide repairing services of components (like a circuit board) that get damaged in their product when not in warranty, as it would be cheaper.

VOB, on the other hand, would recommend replacement of the failed components as it might be a cost intensive for it to maintain a workforce with the skillset to repair components, and ensure proper repair. It would be more economical for it to send service people who just replace the failed component.

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I understand the most common reasons that may create conflict between VOC and VOB are:

 

1.  Such demands of the customers which may go against the business laws / regulations or business as a whole.

2.  Unawareness of the customer about the terms of the services

3.  Lack of clarity on business practices i.e lack of transparency of business

4.  Deals closed in a hurry without having properly understood the customer requirements

5.  Ambiguity in internal processes of the company

 

The above reasons can create conflict between VOC and VOB.

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VOICE OF CUSTOMER:

These are the needs, wants, expectations and what they prefer in both spoken and unspoken words.

The voice of customer can be internal or external.

VOC can be captured on reactive and surveys, interviews, research, evaluations, feedback and meetings.

VOC metrics 

  • Customer satisfaction
  • Net promoter score
  • Performance Evaluations
  • Help desk support calls.

VOICE OF BUSINESS:

VOB are the needs, wants, expectations and preferences, both spoken and unspoken of the people who constitute the business like the shareholders, officers or other involved in corporate governance.

It can be obtained from financial market analysis, competition analysis.

VOB metrics:

  • ROI( Return -On- Investment),
  • Percentage income from returning customers
  • Shareholder Equity.

CONFLICT BETWEEN VOB & VOC

The company does business to make profit and accomplish greater goals but not at the cost of the customer. The customers prefer best products at cheaper rates. In order to synchronize between the VOC and VOB mapping of processes and correcting the system that deliver value to our customer.

 

 

 

 

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What are some of the most common reasons that create a conflict between VOC and VOB?

 

The Voice of the Customer are the needs, wants, expectations, and preferences, both spoken and unspoken.

Customer needs: The most basic demand, product or service should fulfill like If customer is hungry and ordered a Pizza, his basic need is Pizza to be delivered to him.

Customer Wants/Expectation: This label is the next to the needs, in this case once the customer gets assurance that Pizza will be delivered, his wants would be Pizza to be hot and tasty

Customer Delight: This level is frill, something beyond satisfaction. In this case, not only Hot & Tasty Pizza delivered but within 30 minutes, he/she gets with a cola bottle complimentary with it.

If the Customer is satisfied ,he will retain with the business and also sometimes will ask others to try the product/service of the provider and ultimately help the Organization to grow its business. However if only focus is given on Customer satisfaction ,business will suffer. Given infinite resource, any system can provide adequate customer service and can make their customer delight (VOC) but there is no point of having satisfied customer and running the business at loss (VOB)

The Voice Of Business are the needs, wants, expectations, and preferences, both spoken and unspoken, of the people who runs the business itself e.g., shareholders, officers, or others involved in corporate governance.

Voice of business includes increase in profit margin and sales volume, Return on Investments, reduction in expenses, increase in cash flow, improvements in employee safety and similar internal goals and objectives.  Profitability factors will help the business to grow more and more. However, if you only focus on business profitability as the dominant element, then no customer will be left. If the VOC is not considered in the right way , then the business will be compelled to close as the customer will slip to other competitor.

While both VOC & VOB is required for the business to sustain, to  grow ,to make profit ,to accomplish a greater goal but can’t be done at the cost either one (VOC or VOB).Hence the balance between two is essential for sustaining the business.

Conclusion:

Reduction on the cost of the production by improving the resource utilization (VOB - Man, Machine, Material) leads to decrease the price of the product/service and helps the customer satisfaction (VOC – Product Specification, Cost & Time)

Apparently conflicting objectives of VOC & VOB is both have one thing common that is cost and Price or  Business benefit - Return on Investment and Customer satisfaction index.

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The Voice Of the Customer are the needs, wants, expectations, and preferences, both spoken and unspoken, of business’s customers, whether internal or external. Examples of customer needs are a fast service, 24/7 support, no down time etc

The Voice Of the Business are the needs, wants, expectations, and preferences, both spoken and unspoken, of  the people who constitute (run) the business itself (e.g., shareholders, officers, or others involved in corporate governance). 

Examples of business needs are revenue, growth, market leadership etc

There are many times when the wishes of the customers might be at cross purposes with that of the shareholders. For e.g. most customers would prefer to drive down billing rates or squeeze in as much scope as possible into the available budget. While the company management would want to increase billing rates and get more change requests.

The key to reconciling these lies in transparent communication and the awareness that just as the customer is critical to the vendor, so is the vendor critical to the customer. A mature customer would want his vendors to be profitable and efficient, so that they don't try to cut corners in quality or service delivery. Similarly a mature vendor would pass on some of the benefits of process improvement to the customer even if the market forces do not force him to.

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 Voice of Customer (VoC):

This refers to the stated and unstated needs, requirements and expectations of an organisation’s customers – external and internal, to the organisation. Let us see some examples.

 

Eg:
-  Timely service at a Food Court (can be any other relevant service)
-  Rendering/Providing high quality service  
-  On-Time Delivery of a Software Application (can be anything relevant)
-  Minimal or no downtime of a service, that is being rendered
-  24/7 support for banking service or any mission critical service   

 

Tools/Techniques through which VoC is gathered

1. Surveys
2. Online Questionnaires
3. Focus groups
4. Face-to-Face interview
5. Observations
6. Telephonic interviews

 

Merits of VoC:
1. Serves as an essential input in streamlining project needs
2. Serves as a very good tool/technique for customer feedback
3. As it acts as a pointer to customer mindset and therefore can help the service provider, in increasing the customer satisfaction

 

Voice of Business(VoB):

This refers to both the stated and unstated needs, expectations of the team or persons who run the business for an organisation. Let us see some examples.

 

Eg:
-  Capturing the market (Market leader)
-  Revenue growth
-  Return of Investment
-  Providing reliable service
-  Business expansion geographically
-  Minimal Cost of Quality (CoQ)

 

Merits of VoB:

1. Can help in streamlining internal processes to achieve customer needs in a improved fashion
2. Helps in setting up/improving target metrics for the organisation for upcoming/future period

 

Common reasons that create a conflict between VoC and VoB:

1.  Often we would have encountered /witnessed this scenario.   Most of the organisations do have their canteen(s) contracted to different vendor(s). The contracted vendor for an organisation  would often employ/deploy less amount of people to serve the organisation’s staffs(Employees) .This will hamper the timely service to be provided to the employees of the organisation.

 

Here the contractor runs the business and provides the service to the employees.  As per the agreement with the organisations’s admin and mgmt team, the contractor is supposed to provide timely service (VoB) and quality service(VoB). At the same time, the contractor wants to have profit (VoB) in his/her business. So the contractor deploys less workforce (personnel) in the canteen, but this affects the timely service(VoC) provided to the employees of the organisation.  Here the eagerness to lessen the operating cost, by the contractor affects the timely service which is an essential aspect to the customer. This conflict of interest results in poor service rendered to the employees (internal customer).

 

2. Often we find that a service provider struggles to meet the quality expectation of the customer. Business understands the customer's expectation on the quality of service needed by the customer.  The cost of the quality can be split into 4 type of costs - appraisal, prevention, Internal failure and External failure. Effort on prevention will reduce the failure and appraisal costs. But many a times, business do not spend on prevention costs and as a result, quality of the service cannot be improved without the customer getting affected. This results in customer dissatisfaction.
 

Conclusion

VoC is the key for the success of any business. The VoB should ideally align to that. But as we saw , there are cases where there could be alignment conflict between VoC and VoB. That could result in customer dissatisfaction, if not sorted out.

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Voice of customer (VOC) are the explicit and implicit needs, wants, expectations and priorities of internal and external customers. Some of the business priorities are total cost of ownership over time, productivity gains, etc. Some of the voice of customer for a software development firm customer are quick deliveries, zero defect deliveries, lowest cost, 24x7 availability, latest technology, most skilled team, extended warranty periods, flexibility, etc.

Voice of business (VOB) are the explicit and implicit needs, wants, expectations and priorities of people who run the business namely shareholders, management, employees, etc). Some of the business priorities are profitability, return on investment etc. Some of the voice of business for a software development firm are repeat revenue, timely project closures, timely payments, minimal rework costs, optimal resource utilization, minimize manpower costs, employee satisfaction, etc.

Since the priorities of business and customer are different being different entities with different purpose, their Y (priorities) and X (needs and expectations) may differ. While business / company exists for the purpose of making profit which is required to sustain and achieve its goals, it cannot do so at the cost of customer’s money. The same extends to the customer as in while he expects best services at lowest prices, it cannot do so at the cost of company’s sustenance. There may be some parameters which may be common however the acceptable measures may vary – for example both business and customer expect quality, however the level of quality that is acceptable to business and customer may be different.

Voice of business and customer must be considered alongside when identifying the common priorities and designing the processes. Businesses must make sufficient efforts to address voice of customer and use competition analysis to understand how the competition performs on the said parameters before disregarding the voice of customer based on voice of business. Voice of customer must also be viewed against the company strategy to ensure alignment.

Tools like Quality function deployment (QFD) or House of Quality helps businesses map and prioritize these conflicting priorities. Other relevant tools used in conjunction are balanced score card and goals means diagram which help view these priorities together.

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"Customer is the king" All that is voiced by the customer needs to be attended in order to remain in the business.

The common reasons for.conflict between VOC & VOB are 

1. Negotiating on the final cost or MRP

2. Demanding more for the offered price.

3. Expecting more.services that can be offered.

 

 

The business -  accommodates the requests in order to get the order/ project and retain the customer. This is called expansion. Off late it's more harm than good, since the quality is compromised in the bargain. 

 

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Voice of customer defines the specification limits. In some cases customers provide specifications for products or services explicitly. This is the case of defense or any military operation.  In others cases customer express requirements in value terms,  the Compone the that I fluency the buy decision such as price,  product quality,  innovation,  service quality,  company image.  In some other case customer mat spotlight only their needs and wants thus leaving upto to the organisation to translate them  into internal specification.  Which is voice of business.  It depends on organizational how it takes voice of customer.  First organizational has to find d out customers which is internal as well as external.  Now company has to see its future plans,  vision,  mission,  competitor,  all factors including budget on the projects also.  Organisation has to fulfill customer needs anyhow not necessarily fulfill of wants of customer which is endless.  It depends on organisation that how much it is forcing on customer wants which will give delight them and build a faith in the company.  Organisation has to some project or sell product in market for which customer wants to pay for it anyhow.  For eg customer wants a fuel efficient car in the mid range,  if he gets such thing he will be satisfied by the company although you are charging more for the technology but customer wants to pay for it.  It depends whether organisation is going to convert all their needs and wants to requirement,  depending on budget,  competitor if organization doing like this the  there will be big problem for the organisation in future because in same amount you can't give all because customer wants can be endless.  Organisation needs to gather customer data by survey feedback and all and convert their needs and wants into requirements by QFD,  KANO ANALYSIS, SIPOC. 

 

VOC AND VOB conflicts each other eg a end customer is buying a car wants some features like it should be automatic driven,  automatic open,  as temperature set automatically and fuel efficient,  luxurious also then he has to pay more but if he wants it in only 10 Lakh which is impossible to give by a company and if a company does like this then it has no future because all the time you can't see customer wants you have to see you future to sustain yourself.  Give only that is must to give,  rest is delighted.  If you are manufacturers of cars then need to give seat  belt,  safety,  efficient,  driving comfortable, tyres,  fuel tank all are must to run a car but if you give warranty with free service for some thousands of kilometers,  free check up,  insurance, it adds value to customers a d customer will be more happy more satisfied.  Voc and VOB conflicts where organisation starts to focus on customer wants rather than their needs.  For example a customer wants to buy a air conditioner,  is need is to cool down temperature but it should be noiseless,  small in size,  efficient  less power consumption all are his wants do organisation has to focus on customer wants and needs while converting them to requirements. 

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The first step would be to note down the definition and description of both VOC and VOB as a premise to the dissertation on the conflict between the two.

 

VOC: A summary of customer’s expectation, preferences, comments on a product or service in discussion

It is a statement made by a customer on a particular product or service.

Example in a QSR: Customer needs high visibility, Easy access, Cleanliness, Quick & Friendly Service, Tasty Product, Discounts/ Offers, Value for money

VOC data can be collected reactively or proactively through surveys or voluntary feedback systems- Tools like simple surveys, KANO analysis and critical to Quality(CTQ) are common.

Measure metrics can be Csat reports, release analysis etc.

 

VOB: A summary of all needs & expectations related to a business and its stakeholders ie. People who run the business itself (e.g. Shareholders, Investors, Employees & people involved in corporate governance) .

VOB includes needs which are both spoken and or non-spoken. Voice of Business can be used to define Goals / Vision and define Success within a life cycle map.

Example in a QSR: Sales, Profitability, Growth & Market Leadership.

VOC data can be derived from available Financial & market data analysis, Employee surveys, Competition reviews etc.

The measure Metrics for VOB can be ROI (Return on Investment), Shareholder equity , Sales growth etc.

From the above it is obvious that just like customers have needs that are to be fulfilled for different level of Satisfaction, even the business has needs to sustain and grow. Both VOC and VOB can be used for assuring Business Health.

So it is evident that there are needs and wants of 2 parties in a business relationship at far ends.

The Organisation cannot prioritise profitability at the cost of the customer who wants the best service/ product at the lowest cost – big dilemma!!

It is for the organisation to build and mould  it’s culture and take up the challenge to find the synergy between the 2.

Lets consider the common grounds for conflict between the VOC and VOB in a QSR-

The Customer wants a clean surrounding and a comfortable temperature in the seating area, whenever he visits. However, at the same time the manager has to meet the VOB of profitability during the shift- He is responsible to ensure that Business costs are controlled. Hence; the People resource is to be used productively to reduce the cost of labor (variable cost) and also ensure that the utility cost (Electricity) is at lowest possible.

It is very important for this manager to link both the concepts with the company strategy- The strategy is based on the some underlining factors like the mission of the company, customer profile, dissatisfying needs of customer. The set strategy helps to map the processes – The manager in the above mentioned situation will ensure that the outlet is staffed just adequately in different day parts to service (maintain Cleanliness and quick and friendly services) the differing customer volumes in different day parts. Some restaurants follow a matrix called Sales/Man-hour or order /Man-hour to balance both VOC and VOB. To Control the Electricity Bill the Manager keeps the dining area partially closed during slack dayparts and thus reduces the attached utility costs.

 

The conclusion here is the basically to be able to find synergy between the 2 concepts and utilize both to ultimately drive towards better business health for all stakeholders including the Customer.

 

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VOC vs VOB

 

Voice of Customer (VOC) is the needs, wants, and preferences of the customers/clients, whether they are internal or external.  On the other hand, Voice of Business (VOB) is the needs, wants, expectations, and preferences of the people who run the business.

 

The metrics used for VOC can be customer satisfaction scores, product ETAs, after sales customer care, product technical support, etc.  Whereas the metrics used to measure VOB can be ROI, increase in shareholders' networth, percentage of increase in customer base, etc.

 

It is the company's priority to meet the customers' needs and preference and this has been an ever-ending challenge of the company.  The companies have to formulate strategies to align these two angles (VOB & VOC) of any business.

 

There are certain scenarios when both VOC and VOB compete with each other.

 

1.     The VOC expects the business to provide first class quality product/service and the companies need to have better internal processes to support the processes that drive the values for the customers.  Whenever there is increase in sales of the product/services, subsequently increase in production or customer support needs to be there in line with the demand.  However, as the objectives of the company (better ROIs and more profits) are diagonally opposite to the objectives of the customers (zero defects, zero errors, etc.), it is difficult to meet the demand with the supply at such instances.  Though this period is transient, in such scenarios, both VOC and VOB acts in opposite direction.

 

2.    Due to industry competitions, the companies have to slash their prices for their products/services to meet the competition.  During such times, the company’s objective of increasing the ROI will get affected.  In this case, the VOC competes directly with the VOB.

 

In both the above cases, both VOC and VOB act directly opposite to each other.  However, these are only the transient phases; it is the highest priority of the company to take up the challenge and find the match and synergy between them, i.e., VOC & VOB.
 

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Voice Of Customer (VOC) always wants cheapest product with highest quality, where Voice Of Business (VOB) is the internal customer who are associated with the business to grow in all possible direction and obviously by revenue. As customer always wants things on cheap rate, here the contradiction starts with VOB.

Customer wants things faster and to deliver solution faster its comes with cost,  that ultimately comes on customer soldier. Again the contradiction comes. For any service what business provides comes as additional cost to customer which somehow goes against VOC, where customer wants service and quality with cheapest rate.

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Question 3: While the Voice of Business is supposed to be in line with the Voice of Customer, there are some valid reasons that make them go against each other. What are some of the most common reasons that create a conflict between VOC and VOB?

 

What is VOC?

Voice of the customer is nothing but stated and unstated needs or requirements of the customer to provide the world class quality. It is a very critical component to gather information around VOC in all DMAIC phases. This process is all about constantly delivering the world class best product and being innovative, proactive in all the times to delight the customer. The need is gathered in terms of feedbacks, surveys, discussions, focus groups, observations, customer requirements, warranty/guarantee, complaints log. Hence in conclusion, it is customer requirements and expressed in targets.

 

What is VOB?

VOM is nothing but voice of business. VOB is based out of financial derivatives and its relevant data. This financial data will provide us insights on the product strategy, market demand supply gaps, research on product and its development, process requirements and its complexity. By understanding the potentials of the business, the management will decide upon selection of processes/ products that the goals and directions are met in order to satisfy the VOC. VOB is voice of the leadership team, organization’s mission or goals developed in order to satisfy the customer.  Proper management is to highlight the burning customers to the team to identify the problems, fix it and act proactively to prevent such errors which is in order to keep VOB / VOP in line with VOC to delight them.

 

Common reasons which creates the conflict between VOC & VOB:

VOC

VOB

Gathers feedback on the product / services provided to the customer

Gathers financial derivatives, which involves market research

Information is collected once the product is delivered to the cusstomer and the customer uses it to provide feedback.

Information is gathered before the product is developed and ongoing research is conducted to innovate new techniques

Customer's need and requirements are gathered and incorporated in to project selection to add value to the value levers identified.

Value levers (strategic, process, customer driven & Financial levers ) are identified in the process of development of the product in aligned to the goals of the organisation.

Customer's needs

People who runs the organization's needs

Deep insight in to the product that he is willing to pay for

Deep insight into revenue, economic growth, market leadership, etc

 

Does VOC & VOB compete? The company is doing to business to make profit, sustain & lead market, develop and accomplish goals and mission of the organization. Customers can’t be a scape goat at any cost. Oraganization should aim to accomplish the goals developed to satisfy the customer, make profit and invest for future advancements to delight the customer.

image.png.d025a70271aecef8b0f467611c98c53b.png

 

Do the VOC override VOB? No. Customer would always prefer the product at the cheapest price. Its true. But When a company can’t deliver the product which the customer wants, the product fails. Either the VOB should get convinced or VOC get convinced. Both the ways to satisfy each other , the concept of VOB & VOC should go hand in hand, with all the processes mapped continuously to add value to the process, business and customer.

 

Conclusion:

VOC & VOB should go hand in hand for  the organisation’s success. Understanding the business potential will helps us deliver the best to the customer and lead the market to sustain the economical growth and its revenue slab of the organization.

 

thanks

Kavitha

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