“Yes We Can” Powering Public Sector CRM – Part 2

Dears,


Today some 30 per cent of local government authorities in different countries claim robust customer service strategies, but less than 10 per cent have actually implemented a joined-up service approach. It is the need for a fundamental shift in thinking that creates the challenges in CRM implementation, yet without that shift the goals of the modernizing government agenda and joined-up service delivery cannot be achieved.

Some of the challenges in Incubating Public Sector CRM are:

• Organizational change. Fundamental organizational issues need to be addressed to achieve the cultural change to enable successful citizen-centric service delivery. Customer service requirements must be assessed and understood before internal processes and working practices can be amended to enable the service delivery. Cross-organizational cooperation requires a high profile sponsor and often some external challenge, to drive service delivery away from traditional stovepipes towards a citizen-centric model.

• Cost. As ever, funding is also a major issue but there are clear return on investment (ROI) measurements that can be used to cost-justify the investment. Additionally, with the overwhelming focus of the government on improved delivery of public services, projects without a modernizing government/service delivery focus cannot gain funding. ROI measures of improved performance and cost savings or displacement can be achieved. Market research can be used to monitor the number of lost calls that are now reduced, as well as customer perception of service quality. It is important to remember, however, that while consolidating separate customer service points into a one-stop shop can deliver economies of scale, the attendant rise in the quality of the service tends to prompt a significant increase in its use, which may then require additional staff to be employed.

• Technology. There are excellent CRM applications in the market that are mature and proven. However, to deliver citizen-focused services they need to support access to integrated back office systems supporting a range of service areas. The CRM application will handle scripting, contact management and tracking, but it needs knowledge management principles to enable staff to pull knowledge from diverse applications to meet customer needs. So, in addition to the complex process of integrating legacy applications, introducing call centres and supporting Web access, CRM solutions also need to address knowledge management and workflow. To compound the issue, such solutions need to support not just telephone requests and letters but increasingly, electronic forms (e-forms), all with the same levels of service and according to predefined response times.

The government is working hard to introduce best practice - such as in call centres - to provide guidance and advice. There are also a number of standards initiatives under way to aid this process, such as the Electronic Government Framework and Web Guidelines which establish mandatory standards for the usability of government services, including Web navigation and transactions.

Citizen services in action

The ukonline.gov.uk portal is the principal entry point to online government information and services for the citizens in UK. Content on the portal is organized around the needs of the citizen, using 'life episodes' to enable users to access all the information they need about a particular event without having to understand the workings of government or departmental delivery structures. Such life episodes include death and bereavement, moving home, and pensions and retirement. In addition to powerful search engines and real-time government news, the portal also includes easy-access pages to support the visually impaired or those with low reading skills.

Public Sector CRM - Start with contact centre

This article has emphasized the fact that while CRM solutions are a fundamental component of delivering joined-up citizen services, dropping a CRM solution into an existing set of customer service processes is not going to achieve long-term modernizing government goals. The contact centre is a first implementable CRM step towards the new citizen service vision. The centre is an organizational entity focused on customer service at the point of contact, and provides a range of services supported by clear operational objectives.

A CRM solution provides a platform for improved services to the customer. Critically, it provides a building block for the delivery of e-enabled processes as demanded by the government by 2012. This can, however, only be achieved if an organization takes a strategic review of its approach to delivering customer services and changes its internal culture to achieve cross-functional service. Simply automating existing processes using CRM solutions will provide short-term efficiency gains, but without transforming service delivery there is no building block for e-enablement.

Too many public sector call centres offer a 'one number' solution that provides the citizen with an immediate response but has no depth or knowledge with which to resolve issues: it is simply fielding calls. By creating an integrated contact centre that exploits the sophisticated elements of CRM technology such as scripting, call tracking, information and integrated line-of-business systems, the entire customer interaction is tracked from start to finish, problems are resolved quickly, with fewer calls, and the level of service offered is unprecedented.

This integrated approach delivers better customer processes that can be e-enabled easily to meet the government's targets. CRM is not just a means to add a short-term fillip to existing, sometimes poorly regarded, services, but actually provides an opportunity for a fundamental step change in service delivery and a platform for future development towards multi-channel services based on a holistic citizen view.

Loving P&C
DC*

“Yes We Can” Powering Public Sector CRM – Part 1

Dears,

I am back with another article on public sector crm, It is not a fascination to write frequently about this topic but to remind ourselves there is so much we can do this effective Citizen Relationship Management , “ Yes We Can”.

Since 1997 the public sector has focused on delivering high quality, appropriate and timely services to the citizen. However, we are still in the early stages of a long journey, as the following milestones demonstrate:

• 1999: Traditional one-to-one communication with citizens supported by departmental applications. Citizen-focused data was limited and in silos, making cross-departmental or joined-up services impossible to deliver without implementing costly, dedicated staff.

• 2005: Having embarked on the process of joined-up service delivery, the public sector had the tools at its disposal and is beginning to offer multi-channel access to a consistent standard of response, with appropriate service delivery at the point of contact. This is being supported by contact centres offering multiple services, contact tracking and management; e-forms and scripting linking back to integrated back office systems.

• 2009: The government’s own target for the delivery of e-enabled services. We should see integrated cross-departmental cooperation, with multiple services available from a single contact, with the integration and delivery of partner services where appropriate. This will be supported by integrated legacy and citizen data; the use of data mining and other analytical tools to support improvements to services; and Web and community portals with workflow processes improving the ease with which citizens navigate new services and achieve the required service.

• Future: Looking further ahead, the ultimate goal is to achieve a holistic view of the citizen. Employees will be empowered and enjoy an inter-agency (including non-public sector) approach to casework. Communication will be through a variety of channels, and field staff will have online around the clock access to information and resources. By this stage customer knowledge will be core to the community and service planning processes. Underpinning this holistic citizen view will be fully automated systems with interdepartmental access to citizen data, as well as online access by citizens to community data. Mobile telephony, interactive television and smart cards will enable this. Throughout these developments, the principles and technologies of CRM will leverage new technologies and changes in organization structure and process to provide a platform for delivering improved services and supporting the constant evolution of new services to meet the diverse needs of a changing population.

Public Sectors Becoming customer-focused

With electronic service delivery high on the agenda, local government in the developed countries like UK , UK .etc is rapidly cultivating a customer-focused ethos. Supported by customer relationship management (CRM) systems, one-stop shops and citizen contact centres (providing information and access to services) are prime examples of the modernizing initiatives now gaining momentum. However, simply implementing a call centre and CRM system is not the solution to the delivery of integrated, joined-up services to the citizen and will not enable the public sector to meet the modernizing government agenda. Simply automating existing processes results only in small, short-term efficiency gains. A significant step-change in the approach to service delivery is needed. By taking a strategic view of the way in which citizens are dealt with at the point of contact - using knowledge and systems to deliver as much service as possible at the point of contact, and learning about customer needs and service effectiveness (rather than just providing a single contact for registering service demands) - the public sector can use CRM as a driving force for improvements

The role of customer relationship management

There is about a Five to Ten year lag in public sector adoption of CRM, with many public sector managers now applying the term to any customer-focused initiatives and interactions. One benefit of this time lag is that lessons have been learnt from many of the mistakes made in leading-edge private sector implementations. These can now be avoided in the public sector. Of course, the public sector definition of a customer differs greatly from the private sector definition. In the public sector, however, the situation is very different. The emphasis is on improving service across the board, rather than on segmenting and targeting customers according to profitability. CRM enables the public sector to enable improved customer access, to provide better service at the point of access, and to track the progress of customer problems/concerns more efficiently. Key public sector CRM benefits include:

• Managing the initial customer interaction be it via telephone, in person or e-mail: a CRM approach enables a consistent delivery of information to the citizen.

• Prompting action to address customer need: using workflow processes, any citizen enquiry/problem prompts appropriate action by one or several departments.

• Tracking customer interaction throughout its full lifecycle to provide total visibility. Each enquiry generates a contact history, enabling both authority and the customer to keep a track of the situation without the need for the customer to repeat the enquiry and name and address details.

• Providing information for further analysis, to enable services constantly to be assessed and re-focused in line with evolving needs. For example, if a citizen calls requesting a house repair, an integrated CRM approach delivers key information from the outset. The citizen is told the current status of house repairs, length of the waiting time and when to expect an initial inspection. Indeed, with an integrated system that incorporates back-office information from the housing department, an initial inspection appointment can be made immediately. A reference number is then allocated to this request and, should further calls be required, the status of the repair process is immediately visible.

Today, CRM is focused on delivering customer service at the point of access. As few as 10 per cent of local authorities are achieving this goal. However, several have merely automated existing processes. While delivering short-term efficiency gains, such implementations do not provide a platform for further exploitation of CRM technologies, namely analysing the information to support further changes/enhancements to service delivery, both internally and through partners. The key to achieving this is a fundamental shift in organizational thinking that actually supports real citizen-centric services, rather than placing a unified customer service front end on fragmented back-end delivery. Looking forward, once CRM has enabled the delivery of coherent, consistent services, service planners will be able really to exploit the information captured by CRM applications, to gain a deep understanding of the services required and how the needs of the citizen are changing and evolving. This will help improve efficiencies through geographic focusing of services or changing of customer group definitions. With the emphasis on increased private/public sector cooperation, such information will be invaluable in assessing where each can deliver the most appropriate and effective services.

Many countries have their online citizen portal, was formally launched. However, while it provides a central point of access into government services, there are several key elements of the solution yet to be developed, most notably identification and authentication to enable personalized service delivery, as well as local or service specific portals. These too must also be supported by e-forms in a consistent manner across government. Such challenges are not insignificant. However, by using CRM to transform the service delivery through face to face and telephone channels, local authorities and government agencies can create an environment that can then be replicated online as the technology infrastructure comes into place. Before services can be delivered coherently online, it is important to understand what citizens require; how they want to interact with the public sector; how inter-authority services can work together. CRM implementations that move beyond simple process automation to embrace new ways of service delivery provide a fundamental step in delivering e-enabled services to the citizen. Once interdepartmental cooperation and integration have been achieved and there is a robust, secure technology for identification and authentication, CRM can drive processes through the customer interaction lifecycle to provide a holistic customer view. In the next article I will walkthrough through the challenges in incubating CRM @ Public Sector.

Loving P&C


DC*

Oracle BI Solution Saga

Dears,

Oracle E-Business Suite users realize that extracting relevant information and using it intelligently to further the business has quickly become a key requirement of their jobs. Business intelligence (BI) within E-Business Suite took a big step when Oracle acquired Siebel Systems in 2006. Siebel’s analytics technology became the foundation of Oracle’s BI software, and it continues to build on top of that foundation today with its Oracle Business Intelligence Enterprise Edition, also commonly known as OBIEE. Development of OBIEE as well as competing third-party tools have helped Oracle E-Business Suite users attain further insight into their enterprise resource planning (ERP) applications –what they’ve done, what they’re doing, and how their functions connect to the success of the business. But challenges remain. Integration of data between E-Business Suite and other applications is still a struggle for some. Similarly, unifying the display of all the application data through as few dashboards as possible is crucial and still something with which organizations struggle. And finally, finding the right predictive analysis tools moving forward is important.

Prior to acquiring Siebel, Oracle was largely known as a niche player in BI, trailing leaders such as IBM Cognos, SAS, Business Objects (now owned by SAP) and Siebel. The almost $6 billion purchase of Siebel allowed Oracle to open up its BI capabilities to heterogeneous environments. No longer could Oracle BI draw only from Oracle applications sitting on top of Oracle databases. That made it and OBIEE more viable as an enterprise-wide BI platform. Oracle made another big purchase in 2007 that furthered its BI capabilities when it bought Hyperion for about $3 billion. Before being acquired by Oracle, Hyperion had been considered one of the leaders in BI by analyst firms such as Forrester and Gartner. Hyperion
Essbase, an online analytical processing (OLAP) server, had drawn much attention in the industry and is now an Oracle product. Oracle has since developed and advanced the capabilities of OBIEE. Some its major components today include:


• Oracle BI Server: The repository and foundation for all BI data within OBIEE.


• Oracle BI Publisher: Previously called XML Publisher, it merges multiple data sources to produce informational reports (not dashboards).


• Oracle BI Answers: A query and analysis tool to create charts, tables and other display items from multiple data sources.


• Hyperion tools: Various reporting and analytical tools from Hyperion to analyze Essbase.


Integrations


Integrating data and applications is a major priority for system and application managers.In a 2010 reader survey, application managers said that integrating applications and data was their third greatest challenge, behind only software upgrades and maintaining system availability and performance. One of the knocks on Oracle BI in the past has been its lack of integration. Companies often have disparate software solutions to deal with the various aspects of their business. So they might have used Oracle E-Business Suite for financials, but then they might use Siebel for CRM, PeopleSoft for human resources, and some legacy, homegrown application for supply chain management. Pulling all that data into one platform and display it using one dashboard is a major challenge.

Well, now Oracle owns Siebel and PeopleSoft. So in some cases, rather than working to integrate BI data themselves, businesses can just wait for Oracle to do it for them. Oracle has also done some work itself to build integration into its BI around Oracle Business Suite and other applications. Most notable here is Oracle’s common enterprise information model. That allows end users to latch onto data from various sources sitting in different locations, including relational databases, flat files, Oracle sources, and non-Oracle sources. All that data can then be translated into a dashboard for the end user that is removed from the underlying data. The result? Different end users can have different custom dashboards without having to get their fingers dirty in the data themselves.

Though Oracle has done a lot to advance BI around E-Business Suite – through acquisitions and its own development – some companies still choose to go with a third-party BI tool. Many companies don’t want to use every one of the hundreds of Oracle E-Business Suite modules. They might like Oracle E-Business Suite for financials, but they like SAP for their manufacturing application, and something else for their sales application. In other words, they’re going for a best-of-breed approach rather than locking in with one vendor. In such a case, Oracle E-Business Suite users may want to find third-party tools that they feel better integrate and report that data independently of any single application vendor. They might feel that pulling data from different systems is a little harder to do with Oracle tools, ecause they think Oracle tools pull data best from its own applications. A related reason may be that a company is planning on eventually moving to Oracle BI tools, but won’t do it until it migrates its applications to E-Business Suite. Right now it has something that works for it, and doesn’t want to change what isn’t yet broken. Finally, it may just come down to cost. According to the popular BI Survey, two of the main deterrents to a wider rollout of OBIEE were the cost of software and the cost of implementation. The survey revealed that users also reported query performance as being too slow. On the flipside, according to the survey organizations choose OBIEE for two main reasons: because of the Oracle name, and because of OBIEE’s integration with other Oracle applications.



Future

BI tools for Oracle E- Business Suite users have come a long way. At one time it consisted largely of siloed reports only for Oracle E-Business Suite applications sitting on top of Oracle databases. Now application managers can get reports that stretch across Oracle and non Oracle applications, analysis that goes beyond looking at past trends, and views into the impacts of changes on the entire organization, and not just specific departments. The idea of pervasive BI is one often touted as being a trend in BI as a whole, and within Oracle E-Business Suite as well. BI’s penetration in most organizations is around 22% -- that means that about 22% of employees access BI tools for their jobs. According to the 2010 Business Intelligence Challenges and Priorities Survey 58% said that one of the most noticeable differences in how their organization will use BI compared to last year will be that more business users will access BI systems. “Every single person in an organization should have access to fact-based insight.Every business process should have insight.Whether that will actually happen is another question. The vision of pervasive BI has been a vision for many years. Another trend in BI for Oracle E-Business Suite is real-time and predictive analytics. Being able to gather data and report it out to end users as they’re making a transaction presumably allows them to make more intelligent transactions. For example, an organization has a supply chain problem, and realizes that it is not getting products from a given vendor in time. It can then dive deeper and realize that it’s not getting the products in time because accounts payable isn’t paying the vendor in a timely manner. That information can then be used to predict how the supply chain process would go if accounts payable paid on time and vendors sent products out in a timely manner.
The goal of growing BI penetration and improving real-time analytics is simple: Get specific information to the right people so that they can make good decisions. Oracle E-Business suite users aren’t much different. They need accurate BI tools if they’re expected to further the goals of the companies for which they work.
 
Your P&C
DC*

Raising the Bar with Barcodes @ CRM

Dears,

Barcodes is one of the effective ways to make the customer interaction interesting and fruitful. How? Bar codes have been employed on a good number of magazines, advertisements, and on products in retail stores. There’s good reason for this early interest. If used well, bar codes specially the 2D Barcodes are an inexpensive way for organizations to interact with consumers on the go. Using their mobile devices, consumers can photograph these carefully placed codes and find—via the Web—additional product information, coupons, and mobile tickets.

Already, well-known brands such as Dr Pepper, Dominos, Ford, Kraft, and Sprint have gone ahead with 2D campaigns using Microsoft Tags. (Other types of 2D bar codes include Aztec, Bee Tag, DataMatrix, Ezcode, QuickMark, and QR code) There’s “a monumental increase in companies that are willing to go out on a limb and do experiments with the existing media they have in print.

According to Microsoft Tags, Italy is home to more mobile phones than people (about 1.5 per person). Perhaps that is why Italians have become so familiar with 2D bar codes. 2D bar codes also have introduced a new tracking component to marketing, because the ability to identify where a customer has seen your code is powerful. Because customers agree to share their location information when scanning a tag, 2D bar codes offer another way to assess the engagement of an audience. When considering what has prompted this enthusiasm for bar codes in the West, many respond that the increasing accessibility to smartphones has left consumers open to the experience. A developer of 2D bar code solutions, says that the customer benefits most from using 2D bar codes. Through mobile connectivity, consumers can get a fuller, richer multimedia experience that can offer them everything from discounts to warranty information to nutritional facts. It’s up to the brand to promote this experience as desirable.

Overcoming Obstacles

For many marketing departments, 2D bar code dollars make up just a slim slice of the mobile pie. Companies may not be allocating a lot of funds for 2D because the medium is considered experimental by marketers and analysts alike with slow user adoption. For those who are adventurous, there are some caveats. So far, the universal pain point with bar code software is consumer education: Persuading consumers to download the application to their phones, take notice of the bar code, and understand the benefits has proved to be difficult.

Consumers need to be educated and suggests that phones come preinstalled with bar code software. Adding instructions next to bar codes on advertisements, explaining to customers how they work and why they should want this additional experience with a brand. It’s always that first interaction. If we can make the first interaction valuable to them, [consumers] can continue to use it.

The “dead links” in 2D barcodes can dissuade the customer from using bar codes beyond the first experience. Consumers will be deterred from using mobile codes if they initially have an unsatisfactory experience. So-called ‘dead links’, in which scanning a mobile code does not return any information or the wrong information, can be damaging, not only to a given campaign, but to the adoption of mobile code marketing in general.

Already people have high hopes for the future of 2D bar codes. A lot of vendors are hoping that [2D bar codes] will take off so that they can sell some analytics packages that can go with this. But should bar codes escalate to what vendors and customers expect, the question remains whether they will eventually give way to visual search applications, such as Google Goggles. Being able simply to photograph a Coke can, for example, and get information would bypass the need to scan a bar code. The bar codes eventually will become visual search but that a lot about customer behavior must change beforehand. The consumer has yet to get accustomed to the concept of photographing something to get more information about a product.

CRM Barcodes & RFID

Barcodes provides effective means to do a CRM in the Organization. Recently we got an opportunity to work with one of the big retail group company in MiddleEast. The core vision of their CRM project is to bring about effective monitoring and on time inventory fulfillment to their end customer using Siebel VanSales Application and Barcode Integration. The VanSales representative would be visiting the Food Retail Markets in the route designated to him and his visit to the shop will be confirmed only on successful read of the Barcode embedded in a designated location of Food Retail mart. This information will be captured using Handheld Devise running Siebel Application. The information records the visit time as well as make the goods delivered to the customer on time as promised. The Future of Barcodes have lot more in store with intelligent chips embedded this could also provide the information about how much is in the Shelf Space of particular retail unit and how much of it has reached the end customer.

The other interesting fact is RFID (radio frequency identification ) and Barcode Combination could do wonders to track the customer loyalty information.

 Imagine That “Imagine going to the grocery store, filling up your cart and walking right out the door. No longer will you have to wait as someone rings up each item in your cart one at a time. Instead, these RFID tags will communicate with an electronic reader that will detect every item in the cart and ring each up almost instantly. The reader will be connected to a large network that will send information on your products to the retailer and product manufacturers. Your bank will then be notified and the amount of the bill will be deducted from your account. No lines, no waiting. “ . RFID tags, a technology once limited to tracking cattle, are tracking consumer products worldwide. Many manufacturers use the tags to track the location of each product they make from the time it's made until it's pulled off the shelf and tossed in a shopping cart.Outside the realm of retail merchandise, RFID tags are tracking vehicles, airline passengers,

RFID tags are an improvement over bar codes because the tags have read and write capabilities. Data stored on RFID tags can be changed, updated and locked. Some stores that have begun using RFID tags have found that the technology offers a better way to track merchandise for stocking and marketing purposes. Through RFID tags, stores can see how quickly the products leave the shelves and who's buying them.

In addition to retail merchandise, RFID tags have also been added to transportation devices like highway toll cards and train passes. Because of their ability to store data so efficiently, RFID tags can tabulate the cost of tolls and fares and deduct the cost electronically from the amount of money that the user places on the card. Rather than waiting to pay a toll at a tollbooth or shelling out coins at a token counter, passengers use RFID chip-embedded passes like debit cards.

But would you entrust your medical history to an RFID tag? How about your home address or your baby's safety?The Bar is getting raised everyday and we would see much exciting CRM revolution with more intelligent barcodes and RFIDs .



Your P&C

DC*

CRM’s Achilles Heel

Dears,

Now, more than ever, companies are keenly aware of the tremendous benefits associated with understanding current and prospective customers from an economic, attitudinal, and behavioral perspective. Seeing through the 'lens of the customer' has emerged as a requirement rather than a 'nice-to-have'. Strategy and management gurus lament the 'lack' of customers in such a consumer-rich world. Competitors abound, information is in abundance (but quickly becomes useless), and consumers seem to have less and less time to make informed purchasing decisions: these are but a few of the reasons for this paradoxical situation.

In an attempt to address this complex issue, many companies have embraced customer relationship management (CRM) as an important element of their corporate strategy. To help enable these CRM strategies, investments in customer-facing software applications have occurred with the fervent hope that better service and more efficient interaction with customers would occur - at every conceivable touch point. To achieve that objective, however, requires a thorough strategy development process that takes into account numerous variables in order to optimize the fit between organizational and customer needs; that is, it is not just a technological exercise. To date, most companies have just not taken the time to completely:

• Develop the strategic role for CRM;


• Build the information foundation;


• Develop and prioritize tailored and customized offerings;


• Implement and execute at the 'front line', directly with the customer.

This has resulted in 'choke points' that clog the effectiveness potentials of the system .At the most fundamental level, companies have rolled out CRM applications as independent, nonintegrated solutions and generally only from an IT vantage point. The result, all too well documented, is that most organizations that have implemented CRM technology have not achieved the competitive advantage they expected. The primary reason is that most investment in CRM has been in developing the essential IT structure and technical architecture - not on focusing on understanding and relating to the customer as a means to improve customer satisfaction, loyalty, and profit

What has clearly emerged is a strong need to focus on the customer - the customer-centric imperative - and a wide array of companies that say they do just that. But the reality and the vision are clearly not aligned. It would be safe to say that few companies have employed the extensive research and analytical processes presented in the diagram that could maximize and optimize the CRM solution.

CRM brought the compelling promise that businesses could personalize, please, and profit by most of their customers nearly all the time by deploying a software solution. By focusing on the satisfaction of customers, organizational efficiency and effectiveness would increase, and more importantly, profits would rise. However you can only fool some of the people some of the time. While rare success stories have emerged, CRM has not yet delivered on its ultimate promise - the transformed and improved customer experience. Why not? The answer is buried in a complex mixture of naive and somewhat misleading attempts to embed CRM as a 'silver bullet' solution.

While generally improving the organization and efficiency of sales and service through sales force automation and call-centre productivity systems, companies have largely missed the boat to the destination called 'business success'. Absent is the piece that allows companies to best understand and utilize their customer information in order to approach a more personalized, long-term relationship. This is the piece that is strongly connected to better customer care, potentially deeper loyalty, and improved return on investment (ROI). Indeed, missing is marketing and marketing research, primarily in the measurement and study of customer satisfaction.

CRM began as a solution for providing more efficient customer transactions, but has not evolved into a process by which companies can foster more meaningful customer interactions. Today, the challenge is on to take the next step - to focus on building lasting and profitable customer experiences at all interaction and transaction points to increase the probability that customer and brand value can be maximized.

In hindsight it is evident that many companies assumed that just 'adding on' new technology would enhance customer relationships. The fallout of this assumption is all too clear today. To make matters worse, many companies now face the unsettling situation of having too much data, analytic techniques that quickly outpace the ability of the company to use them, and no guidance in optimizing this new-found customer 'intelligence'. In many cases, businesses are left with sophisticated tools that offer little real value. The bottom line is that few companies today are optimizing CRM to create lasting customer relationships and build superior brand value. Thus, many companies are not realizing any returns on their CRM investments. The emphasis on harnessing customer insights at all customer interaction points and - more importantly - translating those insights into better customer experiences has emerged. This situation, while holding much potential, is hampered by a proliferation of fragmented contact points and a lack of conviction that a problem exists. Thus, the more creative and analytical aspects of marketing and research, which can make better use of rich customer insights to create improved experiences across customer channels, have yet to blossom.

Yet companies sense at some level that marketing and research contributes most when it converges completely with operational CRM applications. Marketing insights and analysis can be used to develop data-driven business decisions, among other things. Improved marketing campaigns, relying on enriched customer insights drawn from behavioral and attitudinal databases, can be targeted to increase brand value and potentially boost profits. In short, marketing is waiting to be revitalized, through extracting the maximum value through research and analytic thinking to understand customers and by using this understanding to guide actions. When integrated fully with sales and service efforts, market research completes the CRM solution.

Some exciting observations about Egypt Makeover- Today People are part of Revolutions, Completely remote yet to closely connected to the people on the group. Facebook has made history as the most powerful new IT tool of the century, but it chooses to stand on the sideline of these historic events. That makes sense. Based on the movie account of Mark Zuckerberg’s invention of Facebook it seems almost certain that he did not imagine his IT tool would be the principal weapon of a political revolution in Egypt — or the networking vehicle that might yet remake the Middle East. His motivation then seemed a good deal more hormonal.

The truth is that tools take on a life of their own once put in the hands of human beings, who, by nature, are innovative. People are hard-wired to adapt tools in ways the toolmaker never intended — sometimes for the good and sometimes for the bad.

Loving P&C

DC*

Customer- Value Creators and Destroyers

Dears,


For companies owned by stockholders, value is represented by share value. For companies owned by employees (cooperatives), value is usually represented by bonuses paid on earnings. For publicly owned organizations, a mixture of cost of provision and quality of service usually represents value. For charities, a similar mixture represents value, with the services received by beneficiaries of charities being important. Recent business news challenges whether some quoted companies, through management compensation and option schemes, are being run for their executives' personal benefit!

Behind some of these forms of value lies value to customers. Value to customers is usually measured in terms of the appropriateness of what they receive (benefits) relative to what they have to pay, either directly or indirectly (for example, Service costs, taxation). In most cases, stakeholder value and customer value are closely related, though the relationship between the two can diverge in the short run for all sorts of reasons: for example, government intervention, lack of competition and customer inertia. However, in the long run the two rarely go in different directions. Enhancing customer value is not done solely by CRM but also by producing excellent products and at low cost is another feasible route.

Before analyzing how good CRM practices improve customer value, let us examine the value to the different groups of people in the value chain:

• Value for customers is implicit; it is the fundamental driver of shareholder value. Customer value is created through the development and effective delivery of the right proposition to the right customers.

• Value for employees and partners, and how to create it, is an important focus that people and Partner organization are the most important contributors to business performance.

• Value for shareholders is based not just on profit but is determined by the stock market, based on a number of factors. If a company is perceived to be managing customers and opportunity well, the share price may go up. CRM is now one of the main foci of large companies' presentations to analysts. In one case, a company made such a presentation, claiming that it managed its customers well. When the analysts challenged it and asked how it knew this, the company turned out to have a top- performance, overall and for its sector, so the company was right but there was no value to Customer evaluation criteria set or measured in this case. Share value can also be influenced by the way decisions on improvements to customer value management capabilities are announced and subsequently managed.

Value Creator and Value Destroyers

How value to customers can be created or destroyed. Value can be created, destroyed or ignored at any customer management stage, but most value is created by organizations that compound value creation at each CRM stage by using and building on the gains created in other stages


Analysis and planning: creating value through insight, knowledge and effective planning


Value is initially created by:

• understanding which customers you want to manage;

• understanding how much you can afford to spend in acquiring and retaining them;

• putting the appropriate plans in place to acquire the customers that will add value over time;

• retaining those who are worth retaining;

• Developing those with potential, efficiently.

Planning is also used to match resources to gross value, so that time spent on attracting, retaining or trying to develop customers is relative to likely value.

Value is often destroyed through

• a lack of customer knowledge and insight;

• absent (or poor) data quality and/or data analysis;

• a mismatch of costs to revenues;

• Missing or ineffective planning.

Proposition: creating value through a proposition that helps you find, keep and develop those customers you want to manage

Value is created:

• when you are in a position to develop a proposition to attract similar customers, retain them and develop their value;

• when your proposition development involves all your supply chain providers (to ensure that your proposition can actually be delivered);

• when you communicate your proposition to staff who actually manage customers and to their immediate managers, so that they manage customers in a way that is consistent with the proposition;

• when you support the delivery of the proposition with incentives, rewards, competency development, process standards, measures, IT content and accessibility.

Value is often destroyed through:

• poor targeting or disparate incentive measures that encourage poor quality lead generation;

• propositions that are poorly defined or articulated or go no further than a set of brand values;

• propositions aimed at low value customer groups (a problem compounded from poor analysis and planning);

• poor communication of the proposition to the people delivering the proposition (employees and partners) and the people experiencing it (customers).


People and organization: creating value through effective people and partners

Value is created when:

• you have clear visible leadership for CRM;

• internal communication works smoothly, especially between customer-facing staff and between them and the rest of the organization;

• you have slick decision-making structures and the right competencies;

• motivation and supplier management are employed as key enablers of good customer management;

• Ability to execute is made practical through an appropriate strategy and governance system for business transformation.

Value is destroyed:

• when there is no clear board level leadership and commitment to CRM;

• when the organization stifles quick decision making relating to CRM;

• where objectives are misaligned with the goals of the organization;

• when incompetent people or ineffective systems influence the customer experience;

• when employees are not motivated and rewarded or when suppliers are badly managed;

• when ability to execute is undermined by inappropriate culture or poor governance of business transformation programmes.

We can go on for further exploration at all levels. It can be seen how value is influenced at each stage of the model. Maximum value occurs when all elements of the model are managed together rather than independent parts: joined-up management creates maximum value. Thus, knowing which customers to manage enables you to develop a more appropriate proposition. A good proposition will help you to shape your organization and align your people, processes and IT infrastructure. Good Luck..Value Creators

Your P&C


DC*

Christopher J. Bucholtz 's Article on CRM

This is a fantastic article by Mr.Christopher J. Bucholtz

http://www.crmbuyer.com/story/What-Holds-Back-CRM-Success-Executive-Fear-71588.html?wlc=1296011456&wlc=1296572691

“Enterprise Wave” of Collaboration

Dears,

Enterprise collaboration and tools to support it have been mainstream for about a decade now, with portals, intranets and shared workspaces being some of the primary options IT provides to information workers specifically to support collaboration. These SaaS Web 2.0 (or Enterprise 2.0) technologies like wikis, blogs and micro-blogs are the latest solutions to be adopted and provide newer mechanisms to promote and support enterprise collaboration. These SaaS collaboration tools have a number of benefits -- like a community-oriented paradigm and no software to install -- but despite that, none have made a dent in displacing the primary enterprise collaboration tool for information workers: e-mail.


Email Dominant

There are many reasons for the primacy of e-mail as a collaboration (ubiquity, familiarity, flexibility, end-user control), but in an enterprise setting, one key reason is that collaboration between information workers is usually in support of a work process. Since e-mail is also the primary tool for process execution for information workers, it makes sense that it is also the main tool for collaboration.

So even though almost every enterprise has special purpose solutions available for collaboration and process management, good old e-mail always ends up being the primary method for both collaboration and processes in the enterprise. This can be called the "enterprise collaboration and process paradox," and is the "dirty little secret" of both collaboration and process execution in the enterprise. Realistically, there doesn't seem to be any way to displace e-mail as the king of collaboration and processes -- or is there?

Google Wave Revolution

Since it would be impractical to get everyone to stop using e-mail for collaboration and processes, maybe the right answer is to enhance e-mail so that it is more appropriate for collaboration and process management. Google Wave could turn out to be an interesting response to this challenge. Google Wave is a new type of collaboration for information workers consisting of e-mail, instant messaging and documents. Put into Web 2.0 terms, it is a mashup of e-mail, wikis and instant messaging. Google is positioning Wave as "what e-mail would look like if it were invented today." So maybe Google Wave is the answer to the paradox?

In the enterprise, e-mail is everywhere; everyone uses it and it is the lowest common denominator that every information worker loves to hate, but couldn't live without. Studies show e-mail is what information workers use on an hourly basis. So on the plus side for Google Wave, it is built on the familiar e-mail metaphor of ad-hoc collaboration, and it leverages asynchronous messaging and responses. By keeping track of the complete conversational context between the participants, there is no need to peruse one's inbox to find all the relevant conversations. The context of the conversation is kept in a single place, and can be replayed when needed.

In an enterprise setting, the cognitive overhead associated with the need for participants to reconstruct context when responding to an e-mail is one big factor in e-mail overload. Another benefit is that documents are current. All the participants in the Wave are always using the same version of documents related to the Wave.

Alas, Google has decided to take a Web and consumer focus with this offering, which means it ignored the process side of the enterprise collaboration equation, and you won't be seeing Wave in an enterprise setting anytime soon.



• As collaboration tools continue to evolve, enterprises cannot afford to forget that their needs are different from those of individual users. Existing SaaS collaboration solutions are not really integrated with e-mail. They can generate e-mail, but they are a completely separate application. These tools need to be more tightly integrated with regular e-mail, and the existing e-mail user experience.

• . Enterprise collaboration usually takes place in support of a work process, and there needs to be a way to provide the process context for the collaboration (e.g., an ongoing audit, a response to an RFP, a fraud investigation). There also need to be standard, structured ways for participants to add standard process status information to the collaboration (e.g., complete, declined). Wikis, blogs, mashups -- they all ignore the notion of business process.

• Link to other systems. This is related to the process orientation. There needs to be a way to link with other enterprise systems (document management systems, CRM systems, etc.) related to the process. This also requires that there be a way to add structured data to the collaboration (for linkage to those tools).

• Keep governance and security issues in mind. Let's face it; in an enterprise setting, not everyone is equal. Companies need a governance system that understands who each user is and how much access he or she has. Enterprises need this at a very granular level, and it should be based on existing access control systems.

• Make sure tracking and monitoring issues are addressed. This is both to allow the enterprise to learn from collaborations and related processes, and to enable an audit trail of the work done.

Google Wave is pointing the way to a new paradigm for collaboration. Though it has a consumer focus, I expect that many of its features will be applied in an enterprise setting. These e-mail-based features, augmented by a set of process-oriented features, will set off the next generation "enterprise wave" of collaboration tools.

Loving P&C
DC*

Pulling the Plug on your CRM Project

Dears,

Pulling the plug on a CRM project is never an ideal outcome, but sometimes it’s necessary. The indicative signs discussed in this article may indicate it’s time to end or postpone a CRM project. No IT pro wants to be part of a failed CRM Project; unfortunately, some IT projects are beyond saving and need to be killed. The key is to know when to end YOUR project.

In my experience , I’ve observed important signs that indicate a CRM Project might need to be axed or put on hold until more information is available, better requirements are defined, business structural changes are made, or the personnel getting in the way of progress are no longer part of the project. By recognizing these four signs that a CRM Project is in trouble, you’ll save valuable resources, which include your time.

 Scope creep

During the planning phase, you realize the customer has a very different idea about the defined CRM Project — the customer expects “x,” and you plan to deliver “y.” Sometimes this issue starts during the sales process and isn’t glaringly obvious until the skilled resources who truly understand the solution sit down with the customer to plan out the implementation. This is where the tire meets the road (often for the first time), and the customer says, “Wait, that’s not what I was told by Presales or Sales folks” or, “I was told I could have this for free, and now you’re telling me it’s a 2000-hour effort?” When this situation cannot be resolved through negotiation, you’re at a stalemate. It’s likely time to call off the CRM Project or shelve it until clear and decisive plans are made. Important Note, This sign should not be confused with small disagreements that might occur when the line in the sand is drawn in terms of CRM Project scope.

There are many conditions and situations where a business legitimately changes its requirements after starting a CRM Project. If the CRM Project no longer provides meaningful value, then it’s best to stop throwing good money after bad. On the other hand, some organizations deliberately obscure a flawed CRM Project requirements process by claiming business needs evolved. Obviously, that’s unhealthy and a true sign of failure.

 Resource Churn

If constant turnover on the customer’s project team is causing schedule slippages, missed tasks, budget overruns, and lags in making major decisions, you have a major issue on your hands. It may be time to stop work on the project and force the customer to make some key go/no-go decisions about the remaining work on the project. Remember, Before the blame falls to the delivery CRM Project team and to you as the project manager, you should document the changes to the customer team.

Uncertainty

Customer priorities and infrastructure changes can cause future phases of a CRM Project to come in to question. It’s nearly impossible to keep your expensive project resources intact while the customer takes two months to make decisions about future CRM Project phases. This is usually a good stopping point to give the customer a chance to regroup and figure out if and how they want to spend the rest of their project dollars. You might, however, be able to implement part of the project solution now.

If the organization shifted direction without good reason, thus making the CRM Project superfluous, then flawed strategic planning was the culprit. However, if business requirements changed for a good reason, as suggested in point one, there’s not necessarily a problem. In general, and this is an obvious point, canceling projects without a darn good reason is a definite sign of failure.

Funds Exhaustion

Promise anything to get funding and worry about the consequences later. Shortsighted managers don’t realize that funding is less important than delivering substantive value. Failure is inevitable when managers don’t clearly identify and deliver business value.

In some cases, the CRM Project really did provide value, which the organization did not recognize due to communication problems. Many organizations take a CIO for granted when his IT department consistently delivers the goods without fanfare and attention; sadly, this human failing is all too common. In that case, PR might be a great idea, especially if the CIO isn’t a great communicator. Of course, the CIO should improve his communication skills, but that’s another story.

A CRM Project is in serious jeopardy when the funds run out. If the project budget is depleted, it might be due to increasing demands that were made outside the original spec; you might be able to breathe new life into the project if the client is willing to change the original orders. If the client isn’t willing to make those changes, you aren’t left with many options. Most project managers cannot afford to work pro bono, so you might have to end or delay the project until more funding is available. For the sake of the article, I’m assuming it’s not the project manager’s fault that funds were depleted.

On the surface, over-budget projects are the basic metric for failure. I’m actually surprised this number isn’t higher, because unanticipated cost is always such a clear red flag. At the same time, some projects run over-budget due to intelligent scope increases that provide additional value. For example, while automating two Sales departments, the CRM Project team realizes it can add a third department for only marginal increases in cost. In such cases, going forward is probably the right decision despite the higher spend. Although tempting to use budget performance as simple metric of success or failure, that approach can be overly simplistic and ignore important nuances related to business value. Nonetheless, anytime a project goes over-budget the team must offer a detailed explanation.

Final word-Review your contract

Before telling the client that it’s not in either of your best interests to move forward with the CRM Project, you should read your contract again. You definitely don’t want to pull the plug on a project that could end up costing you lots of money in litigation.

Your P&C
DC*

CRM Program Governance and Executive Sponsorship – Part Deux

Dears,

Subject :CRM Program Governance and Executive Sponsorship – Part Deux (2)

The traditional view of organizations, particularly within academic literature, has been that they are places of great rationality, where matters are discussed openly, impartially and objectively, and decisions are made in a similar manner. This was also true for organizational change. The process of change has been viewed as a highly rational, logical and systematic process. Executives leading change initiatives also adopted a highly logical and rational approach. This manifested itself in many ways, ranging from the justification and rationale for the change through to the process by which the change was managed. The other main lever adopted was the use of formal power to drive the change through, which meant that all parties 'fell in line' most of the time.

A number of developments have led to this rather simplistic model of both organizations and change being radically rethought. As organizations have become larger, and the complexities exponentially increased, the sole use of formal power to drive changes through has not worked. A single power source in the new matrix organizations was not enough. Second, the articulated rationale and logic for change was not acceptable to many of the stakeholders who saw things rather differently. Third, change programmes had an abysmal success rate, with over 70 per cent of programmes not living up to expectations or being cancelled prematurely. Many academics working in the field also developed new thinking and ideas to capture these new, more sophisticated models, based on a broader understanding of 'organizational behaviour'. Their thinking evolved to see organizations from a range of viewpoints: cognitive, cultural and political. Writers invented wonderful phrases to articulate this more diverse approach to organizations, change and the issues, including terms such as 'bounded rationality, pluralistic competition, muddling through, co-optation, resource dependency, garbage can decision processes and loose couplings'. There are couple of items that needs to be looked at and pave way for the Paradigm shift from traditional organizational objective to new objectives in the CRM era.

Objectives and measures

The new objectives (both operational and transformation-related) are developed and cascaded through the same design process. It is important that these objectives and measures reflect the organizational and project dependencies required for success. Too often projects adopt standard or 'best practice' measures which are inappropriate and which work against cooperation and enterprise success. For example call centres may still be focused on elapsed call-time reduction, when the objectives have changed to encourage the call centre to move to an active role in customer development, through achieving retention, cross-sell and up-sell objectives. Poorly formed measures can easily work against change objectives. Strategic or balanced scorecards can be developed for regular measurement and management of change, not only identifying revenue and profit success, but also providing a hierarchy of success criteria that can be used to identify and control business pipelines and customer management activities.

Risk management plans

The overall programme and each subsidiary project require a risk management plan, with prioritization of risks by probability and potential impact. The risk management plan must be active, focused on identifying and mitigating selected risks. These plans are developed in the traditional manner, but with special focus on the external and internal dependencies of ROI achievement for each project and across the programme as a whole.

Setting up and managing sub-projects within the programme

A traditional project office can provide the supporting and administrative role required to release substantial productive time for the programme manager and boards. There are well-developed models for good practice of traditional project office operations. Programme management is more complex than the management of a single project, requiring the project office to manage multiple projects and their interdependencies concurrently.

Managing process and application change

When a new application suite is purchased, or applications are integrated to create parts of the new business process, there can be a desire to over-customize applications to fit existing operations. It is important to identify and close only the essential modification 'gap' in the first stages of deployment, allowing more rapid rollout and early achievement of ROI from breadth of implementation deployment. Once the 'new world' processes and application set have been introduced and experienced, it is far easier to identify the essential changes required for business success in this world. This ensures that focus remains on the development of change for future value, rather than for compromise to existing norms.

Ensuring ROI

This is a more significant part of most projects and programmes than is normally allowed for. It requires the programme team and the stakeholders to act together in an integrated plan, releasing previous costs through commitments to implement timely migration and delivering on identified dependencies to ensure ROI. Having achieved isolated project steps, often delivering their own (limited) ROI, it is often more effective to replicate or integrate business operations to achieve much more substantial ROI, than to embark on the implementation of another separate project step. This would normally have been identified in the prioritization process, but can be revalidated as the measures of success become apparent.

The thoughts expressed in the last 2 of my blog article are just glimpse what it takes to make CRM Programme a success with effective Programme Governance and Change Management. I welcome the champions to explore much more on this subject and share your views to our community

Loving  P&C

DC*

CRM Program Governance and Executive Sponsorship – Part 1

Dears,

In this article I want to highlight two critical areas for successful customer relations management (CRM) programmes. The first is the subject of programme governance and the second is the role and function of executive sponsorship. Programme governance is critical to programme success. Businesses with strong governance succeed. Any good organization undertaking a long-term business transformation knows that strong governance is required for successful change. The research and experience proves that return on investment is limited, or even nonexistent, where no governance structure is in place, or where dependencies are not managed effectively. It is far easier to build business cases and to spend on additional organization and systems than it is to ensure the market and internal dependencies are sufficiently controlled to deliver the required revenue returns.

A critical component of programme governance is strong executive sponsorship. Personal sponsorship is required from the highest levels; this must be as an involved champion of change. In IBM's global CRM programme this was the chief executive personally, Lou Gerstner. The sponsor needs to do more than 'wear the T shirt', becoming personally involved and providing direction to the executive board. 'Walking the talk' and leading by example is key to pre-empting and removing barriers to change. In one global financial services company, where the CRM programme director was also the managing director of a subsidiary bank, the executive measurement and pay system was changed by the chief executive officer (CEO) to pay each executive 75 per cent on team transformation results, leaving 25 per cent payment for his or her personal ownership of subsidiary revenue and profit success. Of course the CEO was not expecting any executive to neglect his or her personal business targets, but at the same time he was emphasizing the importance of change across the enterprise, and his expectation of achieving this through enterprise and executive teaming.

This brings into focus a highly relevant but less well-known area, critical to executive sponsors of CRM programmes, that of 'symbolic action', where the ability to play an acting role becomes critical in managing the various audiences involved. The role of an executive sponsor can be summed up in the following short analogy. Imagine the scenario: you are a movie producer and one day you get a call from a studio, 'We've got a great idea for a movie and we want you to produce it for us, oh and there's a small acting part in it for you as well. Here's the brief, now go and make it happen.' It is a low-budget production so you need to do a bit of scriptwriting and directing as well. Throughout this chapter we will be comparing the parallels between the role of executive sponsor and the multiple roles associated with the making of a movie: producer, scriptwriter, casting director and actor, focusing primarily on the actor role.

There are two main differences between the world of movie production and that of change leadership in organizations. First, movie production is a totally project-based operation, whereas change in organizations entails a project operation being overlaid on existing organizational structures. This creates a significant set of discrete challenges that are not faced in movie production. In fact the governance and change project aims to provide the continuity through various organization stages, selecting the most appropriate structure at any one time, and planning the level of change that can be absorbed and the emphasis that needs to be made (for example innovation or roll-out).

Second, in the movie business there is a final result: the creation of the film, at which point the team disbands. Contrast this with an organizational change, where there are major effects on all aspects of an organization, which need to be sustained for further periods in the organization's evolution. Some might suggest this is the largest obstacle and success factor of programmes within an organization.

In this article, the term 'executive sponsor' refers to a senior person within an organization who is given the 'responsibility' for the implementation of a change programme. The term should not be confused with terms such as 'programme sponsorship', which refer to funding arrangements for commercial sponsorship of events. The word 'responsibility' is important because the specific role and responsibilities, or authority, for an executive sponsor are rarely defined or clear and are generally left to the individual who has such an honour bestowed - which is an issue in itself. In CRM programmes there are many issues faced by the programme sponsor, depending on the specifics of the situation. Ideally the programme sponsor of any CRM programme is the CEO or managing director, who has the remit and power to address the complex 're-engineering' that is required for any successful CRM programme. Many issues are faced in implementing successful CRM, including changing the mindsets of those involved, making the sometimes difficult transition to a more integrated and customer-focused approach to an organization's operations. Another is addressing the 'functional silos' that exist within organizations and have a strong influence on group behaviour, particularly at senior levels. One of the biggest challenges for CRM implementations is making the organizational structure match the organization's new alignment. Any CRM implementation will affect all functions - sales, marketing, customer support - and all business processes - customer attraction, the sales process and so on. This can be a political minefield for senior executives in organizations, including the sponsor.

Too often the sponsor has never made such an extensive and enterprise-wide transformation journey, yet is expected to lead by example, cascading clear objectives and roles to the executive and management team. In the early stages it can be very valuable to develop links with external mentors who have been in such a role and can relate the critical success factors to the new sponsor. The most active sponsors will research the role and learn quickly, while others will simply pass the problem down to the executive team without clear direction.

Symbolic action

Symbolic Action is different from more substantive action because symbolic action has no explicit, direct intention for the audience, but is more suggestive and symbolic. It is not driven by pure logic but rather has its value in the meaning that people attach to it. Examples are the use of a metaphor, the type of language used, and actions that surprise or are not expected.

Any new programme faces a range of resistance and barriers. The typical response of leaders is to present very logical and rational arguments for the programme. This helps in many respects but invariably does not either win over all people or does not provide a totally compelling case for people.

In order to gain commitment and win the hearts and minds of all stakeholders, attention must also be given to more emotive levers. Hence leaders and particularly sponsors of new programmes should give consideration to symbolic action as well as the more substantive actions. Here we discuss what these actions might be, then go on to discuss some of the implications of these ideas for management. But first, programme governance.


Programme Governance

Effective programme governance comprises a number of key roles and activities. These are outlined below.

Programme manager

The programme manager needs to be of a sufficient level and capability that the stakeholders view him or her as an equal and have confidence in his or her ability to succeed. The sponsor needs to personally appoint the programme manager, and champion change through identifying and resolving issues very rapidly - even in advance!

Programme board and team

The best skills are always in demand to run business operations. However these same people are required to manage change. It may be a tough decision but it is essential for success that key people are selected to join the programme team. These people represent the stakeholders at a working level. They may be allocated to the team for short periods, to achieve specific objectives, and then released back to roles, which will take advantage of their new skills and knowledge.

Architecture board

The leader of the architecture board is normally a member of the full programme board. The role of the architecture board is to achieve a level of consistency and synergy across the enterprise systems and data structures. This is essential for achieving enterprise cost reduction and operational resilience.

Project budgets are more usually allocated to the business today, which can create a tendency towards isolated quick wins at the expense of increased ROI from shared infrastructure and leveraged successes.

We will see some more of the essence of the subject in the next article.

Loving P&C
DC*

Competing for Customer’s Wallet

Dears,


Getting customers to shift their value between from one supplier /company to another is particularly difficult when the service is binary - when customers either have to be 100 per cent with one supplier or another. This is one reason why customers have not moved between power suppliers after deregulation as much as was first thought. In many markets, higher value customers are often harder to shift, even if they seem the most likely to profit by it. One reason for this may be that any saving is less significant in relative terms - the well-off individual who can save $100–200 a year on electricity may not find the game worth the candle, compared to the poorer user who might switch for a $40 saving.

However, for products and services where share of wallet can be shifted, such as telecommunications or financial services, the story can be very different. If switching is easy, customers will often shift those bits of their business where they feel they are getting worst value. This leaves the incumbent supplier with those bits of business where customers believe they are getting the best deal - and of course these can be rather poor business for the suppliers. So, many telephony customers have switched their long distance calls, calls to mobiles and international calls to low cost suppliers, leaving their local telephone company with unprofitable local calls. The same risk applies to postal businesses. This is why cross-subsidy is so dangerous for suppliers whose monopolies have been opened up to competition.

An interesting version of this problem is where individual customer value grows over time - typically because income rises with age and so customers buy higher value products. This applies in many areas - for example cars, financial services, travel and telecommunications. Here, the question for the attacking company is whether it can get a good share of the higher value business without having the customer from the beginning. The answer to this is - yes. Indeed, banks have discovered to their cost that having lots of loss-making student customers is not much use if they switch suppliers as soon as they become valuable. For the attacking company, the switching proposition is usually based on excellent value for money, because the incumbents can't give such good value because of the cross-subsidies required to sustain the loss-making early-stage customers.

The defence strategy in this case is to be so good at retaining value as customers become more valuable that there is no need to recruit as many customers at the loss-making or low value stage. More selective early-stage customer recruitment, combined with better prediction of which customers have more value available, and when they will have it available, is now becoming the central plank of many companies' customer management strategy. This requires predictive modelling, usually based on events and transactions, as it is the latter that indicate rising value. Of course, it is also important to make sure that the company's products and services, people, processes and systems are attuned to managing this value towards it.

At the heart of most CRM programmes is a segmentation exercise - classifying customers so that they can be managed better.

These are the people who happily work up to the age of 70 or beyond, and consider themselves middle-aged until they are well past 65. Because they feel young, their purchasing patterns are young too - except that they are beyond the period of accumulation of physical assets. If they are lucky, their children will be married or in stable relationships, and beyond the period when they rely on their parents (though children do seem to have a habit of extending this period of dependence). They enjoy eating out, holidays, perhaps entertaining, the less strenuous forms of sport including just watching, and so on). They are also (because they qualify) often formally within the group that the state defines as needing help (eg public transport concessions, state pensions, access to day centres). In some cases, they provide the backbone of a voluntary force helping even older people.

The number of such people is about to surge, as lot more turn 60. However, we are not sure that most marketers have realized what this implies. Take advertising, for example. With the exception of hair coloring and a few other products that must recognize the age of their customers, most products and services seem to be aimed at people much younger than the typical consumer. Is this because all people want to feel young? Or is it because marketers don't realize the strength of the 'cohort effect' - what happens when people pass through different age groups. This is why the CRM approach can be so valuable for marketers, because segmentation in CRM does not (and should not) mean dividing the market up into large broadly similar groups, but rather finding out what people are like, now, and what they want to do, and allowing them to do it.

Loving P&C
DC*