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To file taxes last year, I used a popular online tax service. The tax software walked me through all the required tax questions and prompted me with explanations and helpful hints. The process was intuitive and the overall experience was good. Once I had completed the tax forms and was ready to file, the application offered to show me how my stats compared to the averages filed in my demographic. As I reviewed the list of comparisons, something jumped out at me. For one particular deduction, I had claimed $0, and the national average was a little over $7,000. How could there be such a vast difference in this one particular deduction? I obviously needed to understand more about this deduction, and the tax software I was using was nice enough to provide me with this information. I discovered that I had misinterpreted what was allowable for the deduction. It turned out that I was able deduct a significant amount, resulting in a $400 drop in taxes I owed. I saved $400 because I was able to see a statistical comparison of my taxes with that of the national average. My good experience with the tax software turned into a fantastic experience!

The company that produced this tax software understands something that most service providers do not. In order to compete in a service industry, you have to offer your customers value-added analytics and reporting for the service being provided. It is no longer enough to compete on price and quality. To differentiate yourself from the competition, you have to offer information that is timely, accurate, relevant and adds value. This is especially true in the business-to-business (B2B) service industries, where the volume of transactions a customer has with a service provider is unmanageable without some type of reporting. The focus on providing your customers with the tools and information they need to make better decisions faster is a discipline I refer to as customer-facing analytics (CFA). This is not to be confused with customer-oriented analytics (COA), which is a focus on analyzing a company's customers with the intention of gaining a better understanding of its customer base and identifying good versus bad, at risk or loyal customers. A lot has been written about COA and how BI and data mining tools can be used to improve a company's relationship with its customers. While COA is customer-oriented, it is, however, still internally facing. CFA uses the same toolset and processes, but it is externally facing and is used by the customer for the customer's benefit.

You might think, "Why would we give our customers the stick to beat us with?" If your service is in such a condition that it can not meet service level agreements (SLAs) that you have with your customers, then CFA is not wise; you will be beaten. However, if this is not the case, offering CFA as part of your service offerings will raise questions from customers that someone will have to be ready to answer. This is a result of greater visibility your customers now have. Analytics and reporting will reveal anomalies, trends and even errors. Customers will ask questions and they will complain, but they will also have a greater sense of control. Often the information provided to customers about the service reveals issues within the customer's own processes - a disproportionate number of orders out of one office, high inventory rates supporting a region, last-minute replenishment orders at higher delivery rates. They will have more knowledge and will make informed decisions.

While BI initiatives have been and continue to be a top priority for many organizations trying to improve their bottom line, customer visibility is often out of scope. It is viewed as an unwanted expense for a free service, not a priority, or worse, not even considered.

For the service provider, there are a number of long-term benefits in offering CFA as a value-added service.

• CFA is a market-differentiating service in most industries.
• It builds customer loyalty. Any customer who realizes savings, improved performance or increased confidence as a result of CFA will be less likely to leave.
• Customer insight is gained. In the process of developing CFA, you will gain more insight into your customer's business. You will learn what is important to them, what their goals are and how your service fits into their processes.
• You can earn more business. For customers that have many service providers in your service line, more business will be shifted to you to achieve greater visibility through your CFA infrastructure.
• You can up-sell/cross-sell. The more services customers use, the more visibility they will have to make better decisions.
• There is billable service offering potential. For more advanced reporting and analytic capabilities, it is not unreasonable to charge customers for the service.
• It creates strategic partnership. If done properly, customers will engage you in their strategic projects associated with your service.

Is this too radical? No. Most service companies share a wealth of information with their customers, such as enterprise data integration, reporting, extracts, invoice summaries, etc. CFA simply takes B2B information exchange to the next level, offering true analysis, customized reporting and notification capabilities. Gradually, service providers are offering more information delivery capabilities as their customers demand it. By recognizing this and taking a BI approach with your customers, you will become proactive in fulfilling your customer's information needs.

Becoming a strategic partner with your customers is an evolution. The following is a framework that can guide you through your transformation. There are four levels of sophistication to be achieved on your way to strategic partnership.

Level 1: Know Thy Self

It is critical to determine what information you can and should supply. There are several factors to take into account.

From a business perspective, determine what appropriate information is to be made available to your customers. What is not appropriate should also be outlined. Information that is private or has legal ramifications should be considered carefully.