B2B CRM, A Different Ball Game

Dears,

The Business 2 Business CRM is a different ball game compared to B2C CRM. Why, What and How?

In B2B markets, the customer is typically a representative of the immediate buying organization. However, this is changing as many global suppliers try to exert further control and influence along the value chain. Thus, in the automotive industry, vehicle manufacturers face legislation that threatens to reduce the control they have over retail distributors. As a result, many are increasing their CRM spend, in an attempt to build a direct relationship with final consumers. Technology such as mobile phones, Web sites, kiosks and multi-channel devices is enabling this transformation. The need for greater value chain integration has led many organizations to view their suppliers and business partners as customers. Indeed, the prevalence of supply chain management (SCM) and partner relationship management (PRM) application software now available reflects this.

A new breed of customer

In many B2B marketplaces the decision maker is changing. As a result, many suppliers have relationships with their customers at many levels of seniority and in many different business functions. In the IT industry, IT expenditure was controlled by IT and finance managers. As technology has become pervasive at work and home, it is has moved from being an efficiency enabler to a key factor in business performance improvement. Line of-business executives often make buying decisions. They need a business solution to their business challenge. So many B2B suppliers now focus on developing and sustaining relationships with this new breed of 'integrated business solution' customers. They have developed sophisticated techniques for consultative marketing and selling.

Consultative marketing

The aim of consultative marketing is to target key decision makers and influencers and promote the supplier to them as a value-added solution provider. Consultative marketing also supports the creation and communication of thought leadership and value-added content through which the relationship is sustained and developed.

Consultative solution selling

Consultative solution selling focuses not just on the intrinsic value of products and services but on ensuring delivery of value. This requires understanding the customer's business challenges and helping to shape the solution to meet the customer's need. Solution selling also involves being able to articulate the supplier's capabilities and then assessing whether the solution can be provided profitably, before developing it in partnership with the customer and perhaps other relevant parties.

Effective Account Management, Possibly Global in Scale

The increasing need to anticipate customer requirements and serve customers more effectively on a global scale requires large B2B companies to further develop their customer management capabilities. Technology clearly plays a key role in the sharing of information and orchestrated targeting of accounts, but equally important are:

• organization of the ownership of accounts;
• refined and clearly understood customer management processes;
• an understanding of the profitability of accounts;
• An effective incentives scheme.

Organization of the ownership of accounts

In a company that spans geographies and multiple divisions, there is often ambiguity in account ownership. Where there is ambiguity there is confusion, and frequently the customer will be on the receiving end of a seemingly disorganized service, leading to frustration and dissatisfaction on both sides. There needs to be clear coordination of responsibilities for managing accounts. Where such an exercise has been undertaken we have seen the following benefits:

• A common language has been established to categorize different account types and the roles and responsibilities of account owners, thus leading to less internal and external confusion.
• More effective account planning and execution.
• Customer requirements can be forecast and actively provided for.
• Improved focus on target and key clients, leading to higher revenue per account manager.
• Increased opportunities for cross-selling (leading to increased sales per customer).
• Improved management of account management performance, improving the productivity of account managers.
• Improved understanding of account management competencies, ensuring that account managers are more effective, leading to greater customer satisfaction, improved retention rates and increased conversion rates for new business.

Refined and clearly understood customer management processes

Typically, large companies have several different approaches, in product divisions and countries in which they operate, to planning and monitoring account development. Alignment to a common approach assists the development of account strategy and management review, particularly for ensuring continuing contact management across divisions. Processes that must be clearly defined, communicated and implemented across the organization include:

• Customer profiling and understanding. This equips customer teams to maximize development opportunities with each customer, using a comprehensive profile for each individual customer. A common profile improves sharing of information amongst account teams and ensures that there is a common view of issues and macro trends affecting the future direction of the organization.
• Account planning and monitoring. This uses customer profile information to develop and detail a business plan, including milestones, responsibilities and key performance indicators. Measurement information is shared across the organization and used in profiling and in refining plans.
• Relationship and contact management. This focuses on identification, development and tracking of relationships with customer executives. Typical activities include development of an organization map of the customer, 'pain sheets' and contact planning. The process also incorporates tracking of customer meetings and contacts, to ensure a coordinated approach to managing customers.
• Opportunity management and execution (including pipeline management and qualification). This focuses on the different stages any sale should go through (however large or small). Having a common approach to opportunity management provides greater transparency of opportunities for senior management and instils appropriate sales disciplines in account managers.
• Sales management and leadership. This focuses on how executive management tracks and reviews account opportunities during the opportunity management process. It covers mechanisms for reviewing the pipeline, and escalating opportunities up the management chain.
• Customer satisfaction tracking. This focuses on how customer satisfaction is measured and how it is supported in terms of account management and operational performance. The aim is to strengthen the relationship with customers by identifying and addressing any issues a customer has. It instils a focus on customer satisfaction as a metric.

An understanding of the profitability of accounts

Many companies are now able to report this, at least on an estimated basis. Having this information:

• provides a clear understanding of which customers are high or low-value and which must be retained;
• enables fast decision making, a prerequisite for global account management;
• provides better information to assist in commercial negotiations with customers;
• increases clarity on 'cost of sale' and 'cost to serve' issues;
• highlights differences in profit margin across geographies for the same account;
• highlights the economic value of certain business locations / routes;
• assists in evaluating economic value of particular products or services;
• Provides an input to the personal performance measurement of account managers and teams.

An effective incentives scheme

Service differentiation will increasingly be in the selling of integrated solutions, enabling the deepening of the relationship with the customer and a move away from the provision of a commodity service. Some customers demand that their supply chain partners operate globally in terms of both operations coverage and relationship management. This means that account teams must be able to operate across country borders in the provision of integrated solutions. To facilitate the move towards a more collaborative environment, it is very important that customer-facing staff are given the correct incentives to respond to customer requirements at a global level. If the remuneration structure does not sufficiently reward account teams, business outside their domiciled country or division might not be developed, and the selling of integrated solutions at a regional or country/local level will not be promoted. Incentives schemes need to be structured so as to engender the following:

• encourage integrated solution selling;
• promote the identification of opportunities for other areas of the company (eg other products/services and in other geographies);
• Support the global account management roles and encourage account managers to act in a way which is consistent with the desired roles and responsibilities as described in the 'ownership' section above.

The Successful B2B CRM  will get you to the Last Mile in the Supply Chain, How? See it in Next Arcticle

Loving P&C

DC*

CIO’s agenda for Integrated Business, IT & CRM Capability – Part 3

Dears,

In this concluding part of the article lets investigate little more on the Integration of  Collaborative, operational and analytical  functions for CRM Excellence

The distinction between the collaborative, operational and analytical functions is clearly recognized in CRM, where all three need to combine in a closed-loop approach for business success. Collaborative functions support the communication with the customer via Web-chat or, more traditional, e-mail, telephony, face-to-face or intermediary support applications. Operational functions provide (ideally the single point of) access to customer data and are the basis for automating customer or product marketing and servicing tasks. These are the 'systems of record' or 'legacy systems' (where the definition of legacy seems to be that the system has achieved production status!). Analytical functions provide data consolidation for analytics, mining for segmentation, trends and predictions in customer behaviour, often using complex mathematical models. Analytical functions can also provide measures on the effect of CRM initiatives, thus closing the loop.

It is easy to see that the potential for poor integration of these three dimensions is huge. It starts within one category, for example, contact tracking and reporting being separate for the different channels, and extends to systems across different functions. As a result, the enterprise often has no consistent view of its customers along all three dimensions, which is often obvious to the customer. Moreover, poor integration of analytical and operational systems may break the controlling and learning loop described above.

These dimensions clearly apply not only to CRM but to other, if not all, areas of the business. Collaborative applications extend to process flows between front, middle and back office within the enterprise as well as flows between the enterprise and business partners, service providers or suppliers, respectively. Analytical functions extend, for example, to risk management applications. Operational functions cover all tasks being automated within the enterprise.

An enterprise cannot afford to use more than one architectural approach, as its systems would otherwise remain disconnected, or to have disjointed processes (as an example) for customer and risk management.

For example, channel integration is threatened by poorly integrated collaborative and operational applications serving different channels, like call centre, e-mail, Web transactions, face to face and intermediated customer contact. Channel integration requires the delivery of current, accurate, and consistent data from (typically many) operational to (one or more) analytical systems. Automation turns collaborative into operational tasks, requiring a flexible and seamless integration of collaborative and operational systems.

Capabilities

In the CRM systems market, several vendors offer integrated (or suite) packages that contribute to more than one dimension, and sometimes all three dimensions. However they still do not provide a complete and integrated solution for a complex enterprise. Where packages do not fulfil the integration capabilities discussed below, the reliance on a single vendor makes it harder to enhance the application landscape with products from other vendors or with custom-developed components over time, as new business requirements and priorities emerge.

Most vendors and service providers suggest an enterprise application integration (EAI) platform to solve the complex integration issues found in complex enterprises, while simpler solutions can be relevant to smaller businesses. An EAI is needed to integrate applications from different vendors that have not been designed specifically to communicate with each other or with pre-existing and future systems.Applications to be integrated must provide some functional service interfaces. These interfaces should be 'transaction-enabled' or, technically speaking, support a 'two-phase-commit' protocol, so they can be safely combined with other 'industrial strength' application functions. Ideally, these interfaces should follow SOA standards and  IBM's IAA or IFW in financial services. Second, application components must notify interested parties of relevant changes or, at least, provide customizing facilities for adding such notification capabilities. This is particularly important if data in separate systems has to be up-to-date and consistent - an increasing requirement of real-time business operations with personalized customer management capabilities.

Today, many systems are integrated via batch updates, violating the data currency requirement for some critical business purposes. Finally, if application components are candidates for integration into people-based processes and workflow, or simply integration on the desktop of a single user, they should provide user interfaces that can be controlled on the level of elementary activities (or functions), such as 'create a new customer', or 'approve loan'. If this capability were absent, integration of application components within a more global workflow would require the custom development (or redevelopment) of user interfaces. The first and second capabilities are found with many application systems on the market; the final one is currently rather rare, but is becoming more common with the penetration of Web or portal interface components, allowing single access points to multiple systems for employees, partners and customers.

As far as the overall application and system architecture is concerned, the major capabilities are multi-channel enabling, and the separation of largely context-independent activities as the basic granularity of application components. Multi-channel capability, in turn, is mainly enabled by a clean separation of logical activities and physical user interface. Activities should be modelled in a way that does not anticipate which user interacts with which activity. This provides the flexibility to have an activity executed by a client via different channel devices, by call centre staff, or also automatically. (Note again the point made above that the trend is towards automating more manual activities.)

From a data architecture point of view, integration will rarely be seamless. Attempts to move towards an enterprise-wide, redundancy-free data model have mostly failed, since the data architecture gets too complex if it tries to address all different aspects of the enterprise. It is therefore advisable to have local data architectures for different domains, probably introducing some well-managed redundancies, defining which application component is responsible for managing which data, and defining a proper mapping between these models to allow consistency of key data across the architecture.

Industry data models play an important, central and intermediary role in supporting effective customer management. The most obvious, and now proven, uses for industry data models are:

• Development of a 'single customer view' (in fact a single business view, of all customers, products, channels, alliances etc) for analytical uses. This is normally known as a Customer Analytics or Warehouse, and provides the base for providing consistent views and extracts (data-marts) of the same core data for various marketing, risk, profit, finance, measurement and scorecard applications.
• Development of a 'single customer view' (in fact a 'party' view of customer and eventually all other personal and business relationships relevant to effective customer management) for operational (system of record) and collaborative (integrated multichannel) purposes.
• Development of data mappings for data interchange (eg XML formats) and other integration standards, including combined portals and portlets.

Industry data models provide the required common ground for consolidating shared data and sharing data dynamically as required. Industry data models also provide the shared home for data content that enables customer risk and profitability insights to be combined with offer and response information. Without this additional industry profit and value data, and without the integration of analytics, operational and collaborative function, isolated CRM application components may be deployed to target responsive customers of any value and fail to deliver the anticipated ROI ,The Diagram shows a typical high-level architecture for successfully integrating analytical, operational and collaborative processes, functions and systems in this manner for BFSI Function

Batch and on-time execution integration by synchronous or asynchronous operations

Issues

There are various styles of system in use today that have been implemented over many years. First we have systems that work in batch mode: that is, the input data is pre-batched and processing tasks are run sequentially within a defined time frame, for example overnight, weekly or monthly. Second, there are systems that take immediate input requests, process those individual tasks immediately (eg credit risk control system or dialogue applications) and respond in real time to the requester or user.Many businesses require these previously disparate systems to be integrated to form a single business process. Some operations previously implemented as batch need to be carried out in real time due to a business requirement for an immediate response. A financial services example could be that funds are transferred between accounts immediately and made available for the next transaction to take place. 'Straight through processing' is a term now commonly used to represent immediate data validation and update.

Capabilities

The integration of the activities (functions) of the business process chain must be implemented using both mechanisms, by synchronous as well as asynchronous operations. Synchronous operations are applicable if the operation result can be delivered immediately. The asynchronous method may be appropriate if the calculation of the result requires additional input that requires some time, so the result cannot be delivered immediately. Asynchronous activity may be preferred if the action must be carried out in near real time (the results made available almost immediately, perhaps in seconds or even minutes).

In each case the synchronous and asynchronous activities (functions) of the process value chain have to be connected. For integration of these activities a uniform system model is needed that brings the different styles together. This might be a (work) flow-oriented approach that retains the sequence, consistency and rigour of the process value chain, for example ensuring completion of multiple update stages for various sources of customer data. Thus, this integration can be accomplished using appropriate workflow management systems.

Another approach is the use of enterprise application integration methods. Here, an integration broker allows a bus-like topology for connecting different activities and a minimal number of interfaces and connection between the components. The integrator itself (Fusion Middleware Suite) can enrich data and transform them into another data format. Compared with the workflow management system approach, this method has the disadvantage of fixed process chains and the necessity of implementation of some control and data flow between the activities.

An easy way to connect systems is message queuing, allowing the integration on a synchronous and asynchronous systems basis. Such connections are characterized by guaranteed delivery within defined time intervals and without delivery duplication. However, these systems have traditionally not included control-flow management and have required a unique data format between sender and receiver. These combined requirements have now been addressed by the most recent integration developments of newintegration product suite.

Integration performance needs to be considered, because more functionality (as in the case of the use of workflow management systems) requires a significant overhead of (system) management operations. So in cases with high performance requirements it makes sense to implement a special process management system, based on defined (fixed) process flow criteria and a state machine.Many integration methods are able to satisfy the requirement of the on-time execution of activities. However the best integration methods and tools can rapidly and flexibly combine analytical, operational and collaborative systems for effective customer management AKA CRM Excellence. The same integration methods can also integrate existing systems ('legacy' or operational), current systems purchases (such as CRM components or suites) and future systems elements, so far unknown.

Summary

Integration of analytical, operational and collaborative systems is needed to deliver substantial ROI from enterprise and closed-loop customer management projects. Current integration methods and tools can deliver the function needed to consolidate past, present and future systems within a single consistent architecture. Industry data models are essential for managing customers for profit, through integrating analytical and operational customer databases and supporting consistent data sharing for integrated channel management and closed-loop operations. Although integration issues are tough to tackle, and need to be addressed in a prioritized business transformation programme, it is now possible to balance accelerated delivery of short-term business requirements with delivery of a flexible, shared infrastructure for cost reduction and operational resilience. Good Luck and Happy Integration..

Loving P&C

DC*

CIO’s agenda for Integrated Business, IT & CRM Capability – Part 2

Dears,

In this part deux , I want to emphasize on the need for unified Integration methodology. Lets see how integration technologies play a major role in Technology alignment to Organization objectives.

IT strategy based on a global requirements management process

To meet the business needs of single and associated projects, especially when planning to take advantage of shared infrastructure to deliver cost reductions and operational resilience, a well-defined IT strategy and supporting architecture must exist. This IT strategy is the basis for deriving IT initiatives and concrete IT projects. The IT strategy defines the large-scale action plan (programme) and includes products to the business (IT services offerings) and IT business areas, platforms, architectures and technologies, methods and tools, competencies and IT processes that are the basis of a shared but responsive infrastructure.

The IT strategy definition must be based on a proper business requirement identification process. IT requirements cannot be defined independently from business requirements; business process requirements and IT solutions must be developed jointly and coherently. In customer management projects it is common to translate business needs too quickly to IT application selection, ignoring the importance of people, processes and other key issues, which usually have a more immediate effect on project success or failure.

Enterprise architecture management and IT governance

A consistent and well-managed approach to governance for customer management activities and underlying systems transformation is required for programme success. This should provide a consistent view of prioritized business processes across the organization, and requires an overall view of all IT systems involved in that programme. This is important for the technical, business and financial success of the programme. A good architecture enables the exploitation of existing systems in conjunction with new application investments. The same architecture must support all the initiatives of the company (not only customer management) in an integrated and shared manner. The architecture must also provide the basis for future developments, although in many cases future technologies and technology applications cannot yet be envisaged. A good architecture will achieve these objectives through use of sound integration technologies, enabling flexible and prioritized integration of data, real time and other messaging, onscreen applications (eg portal and portlet) and workflow concepts. Industry data models and common interchange standards (eg XML) have an increasingly important role to play here.

Enterprise architecture management includes the analysis of the current application portfolio and the identification of areas for improvement, and the definition of a unique business, application and infrastructure architecture across the enterprise. The management of processes to create this unique view with the relevant architectures is called IT governance.

Poorly integrated technology Issues

Most of today's enterprises have to deal with a heritage of poorly integrated technologies. By 'technology' we mean all aspects of applications, platform categories, operating systems and middleware including application servers, transaction monitors, user interface platforms, messaging and extract-transform-load middleware, database management systems, or programming language environments. A company may have a variety of products within these categories from different vendors in different releases.

Reasons for poor integration include the following. For application selection or custom application development, the major issue is the lack of coordination of (internal) development efforts. The trend to moving responsibility for application selection or development towards business units often has the undesirable effect that each project team makes its own technology decisions, undermining enterprise flexibility, cost reduction and operational resilience. But even without this general trend, development often becomes dispersed within the enterprise.

Second, for the integration of application (component) products, the major issue is the dependency of each such application component on a given technology, or the application component may bring its own technology components, making the problem worse.

In considering the consequences of poorly integrated technology, we need to distinguish whether the technology is used 'locally' to applications or whether it serves as a shared application integration platform. With the increasing need for application integration, there is a trend to view more technologies as potentially local to application components (eg a programming language/environment or a database system). The application component then only reveals its interfaces in a way that is neutral to these technologies (eg as WebServices with only functional interfaces). Varied, poorly integrated technology local to applications leads to increased cost of ownership, including (additional) investments in skills, licences, maintenance, or bug tracking. It can also make integration of application components much harder and more expensive, and might even completely undermine the business case for such integration. With the growing demand for e-business solutions which span a single enterprise, poorly integrated technologies create additional problems, for example in inter-business processes.

Explore the  Integration Capabilities

The capabilities needed to address the above issues fall into two categories: first, those used to unify technology and architecture decisions within the enterprise wherever feasible, and second, those used to manage heterogeneity where necessary, since it may be too idealistic (or naive) to aim to avoid heterogeneity completely.

The first category requires process and architectural capabilities. The most important process requirement is for strict architecture and technology management processes and for a delegation of decision responsibilities, which is enforced by these processes - the governance model. There are very different approaches to such models, depending on a company's organization and culture. The introduction of a particular model usually requires organizational and cultural change. Models include a centralized technology management department with decentralized development units (where development may take place in the business units), a centralized development unit ('production line') including technology management, or decentralized development with technology/ architecture boards.

If an effective architecture management process is in place, the remaining threat to uniformity of architecture arises from technology evolution. Evolution, including the evolution of technology standards, is still extremely dynamic, with significant new technologies being introduced every year. Many evolutionary steps do not introduce significantly new architectural principles, though. Consider, for example, the chain of DCE, CORBA, EJB (as part of J2EE) and WebServices. All are models for distributed computing, all have to reinvent, replicate or reuse solutions to the tough but common problems of security and transaction handling in distributed environments, but none introduce significantly new architectural principles. For in-house application development, it is therefore good practice to separate application logic completely from the underlying technology, for example, by encapsulating specific technology through an extra software (architecture) layer or by using code generation techniques that generate flexible mapping between application code and the current technology. Thus, architecture can remain stable (evolve through upward compatibly) for some time, while technology that implements the architecture may well change. Typical architectural decisions that enable this flexibility include separation of user interface and application logic, and separation of components via interfaces.

The second category, management of heterogeneity, requires a component-based approach to application architecture with an enterprise-wide standard for integrating application components. Components themselves may then use any basic technology as long as it is encapsulated within the component. Integration of components must be enabled on two levels: on the functional level and on the user interface level. On the functional level, the major integration mechanism is provided by message-oriented systems with added capabilities for message routing and data mapping. XML, the de facto data standard in this area, is being extended with functional capabilities through SOAP (simple object access protocol) and WebServices. It is more important to focus on the general architectural capability of separating application components with well-defined interfaces than to focus on one specific technology. Once such interfaces are conceptually defined, it is mostly simple to map them to different technologies, be it CORBA, EJB, or WebServices. More and more application products expose their functional interfaces to enable their integration on a functional level, despite potentially heterogeneous underlying technology. On the user interface level, (tight) integration is much more difficult, since most off-the-shelf application components do not expose their user interfaces as separate entities. However, this is changing, since with the increasing need for business workflows, application systems will need to be broken down into activities that can be triggered separately, including functionality and user interface. Another promising trend is the move of user interfaces towards pure Web technology and shared portals. This requires more sophisticated Web user interface elements and, more important, the separation of Web page content from sequencing control.

Managing technology heterogeneity for off-the-shelf application products while providing the necessary integration capabilities depends on imposing requirements that products publish their interfaces and provide a component based approach to their overall architecture, from a functional, but also from a user-interface point of view.

We will explore the Collaboration part in the concluding part of this article, Watch this Space

Loving P&C

DC*

CIO’s agenda for Integrated Business, IT & CRM Capability - Part 1

Dears

One of the main tasks of today's chief information officers (CIOs) is to get their IT department into the position of being an internal adviser to help their business create and sustain innovation cost-effectively through creation and deployment of new information management capabilities. Using IT to innovate in the business is becoming very important in virtually every business sector. The focus today is more on the enterprise's IT capabilities and how these can be exploited for business benefit, rather than on underlying system considerations.

So what capabilities are required to make IT a business innovator?

The most severe problem is failure to integrate business and IT. Poorly defined processes, organizations, and governance rules and structures are the main causes of this. Other issues are more specific to IT, including the heterogeneous technologies, lack of architecture, or application landscapes that undermine an integrated approach. It is the CIO's task to build the primary capabilities that help to overcome

Capabilities : IT as the service provider for business

The various research results show that IT is an important enabler of CRM. To meet the requirements of the business, the IT services group must consider itself as a service provider. To act as a service provider requires both a clear description of the service offerings and a reasonable pricing of that service offering. The service offering description is a service catalogue with service packages, which include single service elements with service-level agreements and corresponding prices for each service package. This offering must be accompanied by IT processes for providing the service package to the agreed service level, for communicating the selection catalogue to the business divisions, and for administering and modernizing the catalogue. Further, the IT service divisions should be able to support the business divisions in calculating the business case (see below) for an appropriate IT service package in each situation.

Business divisions and users need help in specifying and checking the offerings of the IT services group. If the offerings do not meet the requirements, the business can reject the offering and use another service provider. Here, the conflict between localized budgets and objectives versus the need for shared infrastructure for cost reduction and operational resilience can become apparent.It is important that business managers understand at least the critical success factors for IT project involvement. This can help to ensure that change programmes run as seamlessly as possible, with responsibilities correctly allocated. Those programmes proving to be most successful share a common governance system, rather than creating a blame culture between business and IT.

Process-oriented application development and integration of IT systems

CRM systems exist to support business processes. Today's application selection and development methodologies allow excellent mapping of business process requirements and design to application selection and customization. Depending on the kind of new systems to be selected and customized or created, different techniques can be used. The focus may be on connecting existing process elements or on implementation of new process elements, or entire new processes. Too often the focus is only on adding new elements, when it can be far more effective (for ROI) to replicate or scale up existing implementations, or integrate existing capabilities to create closed-loop operational control.

Where a pre-developed application is selected and customized, much of this component work is already structured and provided by the application vendor, so the customization process can then focus on closing any gaps. Over-customization (for example, making the new application fit very closely with existing business processes) should be avoided, as this delays implementation and reduces ROI. It may also be more effective to customize (beyond the essential gaps) once the application has been deployed and experienced. Some packages are so functionally extensive that customization may be simply to restrict function use, at least in the early stages of implementation. Companies have been concerned that having paid once for the function, they are paying again to disable it while delaying implementation and ROI from wider deployment.

CRM Experts suggests that experience from package implementation reviews shows that programme risk appears to increase dramatically with the degree of 'package customization' attempted. It appears to be wise to execute a rapid and lightly customized implementation first, which partially links the package into the existing business processes. Few code changes are made to the package and limited interfaces are implemented between the package and existing operational systems. Additions and adjustments are made to the business processes over time to better match the optimal business process support of the package and its interfaces to other systems within the organization. This approach is not initially popular with business units or end-users and demands board-level support for ruthless prioritization and control of user requirements. However it has proven to be most effective in achieving business success and ROI.

Ability to develop a business case for each new IT project

In calculation of the business case three parts are normally considered. First, the scope of cost and value are defined. The following layers for the scope discussion can be identified:

• Operations cost avoidance (eg improved efficiency in internal IT operations).
• Development cost avoidance (eg by using standardized architectural patterns and components, or shared infrastructure).
• Improved IT process efficiency (eg through usage of simplified data maintenance).
• Business process efficiency potential (eg through fewer processes, replicated processes, by improved focus on customer segments through better data quality).

Second, the financial calculation method must be selected. Net present value seems to be the favoured option here, although various forms of this calculation are available. Businesses are increasingly implementing standardized methods and models for assessing project value in a comparative manner.

Third, each business case calculation needs data. This requires transparent information on current costs. Normally, IT infrastructure costs for hardware and software are well known. If not, comparable industry values can be used. It is harder to calculate the costs of implementing particular software packages; usually these costs have to be estimated.

Too frequently risk management does not form an integral part of the IT business case. It is always easier to make a theoretical calculation and to spend money than to ensure that ROI is achieved! Many of the factors that affect the ROI outcome are external to the project or company. They need to be identified and evaluated as potential risks to project and payback success, allowing relevant risk mitigation actions to be implemented where appropriate.

Let see the next part with some more information on IT Strategy,Integration and Collaborative Enablers.

Loving P&C
DC*

One Penny Saved is Two Pennies Earned: Optimize your CRM Implementation Cost

Dears,

The Celebration Begins and Spending has no limits, This is very much true with CRM implementation. We welcome the celebration but we can look at optimize the spending so the ROI could be achieved without comprising the quality of the CRM Vision. Lets look at some means and options before you.

Brand New CRM

Sometimes organisations already have CRM software, but it just isn’t working well for them. The temptation is often to replace it with something new. However, the fault may not be with the software itself, but in the way it’s been implemented or used. Re-implementing what you already have is likely to be significantly cheaper than buying a new system.

Phase It

It’s generally best not to try and do too much in one go. If you can focus on the areas where you can achieve the greatest impact, you can lower costs, and increase the return on investment from the project. Plan multiple phase with clear statement of direction and objective what you want to achieve in each phase and then move forward.

Devil is in Details

Make sure you have the complete requirement and then that requirements in detail.This will allow you to solicit firm bids from prospective vendors in a competitive environment which will allow you to buy more cost effectively.

Locked In

one very expensive mistake a lot of organisations make is to commit to a vendor before the final costs for a project are known. This removes the incentive for a vendor to offer competitive pricing, and it’s is a lousy position to try and negotiate from.

Ask for Discount

Many companies like Microsoft, Salesforce.com, Oracle and SAP  offer highly discounted software to certain sectors such as charities, Public Sector and educational establishments. If you think you may qualify, then it’s worth asking the question.

Negotiate on List Price

Most CRM software and service pricing is negotiable, so don’t be afraid to negotiate. If there’s a large number of service days involved it may be worth getting an independent CRM consultant involved to verify that the quoted amounts are appropriate for the work involved. Quarter and year ends are time when vendors are most motivated to cut deals, and you will tend to negotiate much more successfully the less optimistic the prospective vendor is about their likelihood of winning your business.

Collaborate

There are a couple of dimensions to this, but you may be able to offer the products or services that your company provide in full or partial payment. You may also be able to trade in other ways, particularly in terms of you ability to act as a reference site.  Vendors are always anxious to secure new references particularly if they have a new product or are entering a new market. Your willingness to act as one could secure a substantial discount.

T&C Aware

 it’s not just what you pay for software and services that’s important, check the small print as well. There can be a range of hidden terms and costs that can become very expensive over the life of the system. Be aware of these and address them in your negotiations.

Limit Customization

The more customization you do, the greater the implementation costs. While you should always tailor the system to meet your unique needs, organisations can be prone to adding unnecessary ‘frills’ to the system, or capabilities that later prove to be expensive white elephants. Keeping as close as possible to the out of the box capabilities and ruthlessly cutting out any development requirements that don’t add significant value can be a very effective way to cut costs.

Don’t get carried away with Branding

It’s often tempting to go for the known names in the industry, but you may be able to purchase much more cost effectively by looking to newer, less established vendors, where you aren’t paying a premium for the brand.

Match It.

 your detailed requirements specification should tell you the functionality you do (and don’t) need from your CRM software. Understanding your needs and matching them to the most appropriate product can save you lavishing money on a suite of capabilities you don’t require.

Make use of Freewares /Less Expensive

There are a raft of free to low cost CRM offerings available on the market. These may not be as sophisticated as some of bigger ticket options, but if your needs are pretty straightforward they may well do the job. But be cautious not to underestimate the potential problems you may get in if there is no enough support from Freeware Developers.

Clear and Crystal

 there are two approaches to CRM. You can use it in an ad hoc way or a process driven way. The ad hoc way is cheaper and the returns lower. The process driven way requires a lot more resource, but will produce much higher returns. It pays to understand which approach you are aiming for. The thing you want to avoid is going for process driven approach without the necessary resources, because you will end up spending a lot, to achieve very little.

License Rules

CRM implementations can take a lot longer than people expect. Buying licences during the implementation phase, when no one is able to use them, needlessly ties up capital. Since most CRM software companies do not penalise you for adding users incrementally, it’s often better to buy as you need them as this avoids you buying for users who don’t end up using them. This can save you a fortune in expensive ‘shelfware’.

Drive it Right

It’s a lot cheaper to implement a project right first time than to try and turn it around later. It’s easy to underestimate what’s involved in a successful CRM project and it’s easy to come unstuck, so it’s a cost effective strategy to plan it and mange it carefully.

Do it Yourself , Try

There’s a lot on a CRM project that you may be able to do a lot more cost effectively than the vendor. With many systems it’s relatively easy to set up the basics such as adding fields and pick-lists, so a good way to reduce costs can be to use the vendor for the more complex tasks and use internal resources to carry out the more straightforward work.

Keep them @ Site

In my experience developers tend to be much more productive when they are working outside of their own offices. This is perhaps less of a problem if they are working to a fixed price contract, but if it’s time and materials, then I’ve found that you get a lot more for your money if you have them working in your own site rather their own.

Experience

A capable, experienced, developer will generally be many times more productive than an inexperienced one, but the day rate you pay is often the same. It therefore pays to be very selective about the team members you have working on your project.

Independent Specialist – vender implementation staff can be an expensive resource. Independent Specialist can be considerably cheaper. If you can find experienced staff with the required skill-sets, then this can significantly cut project costs.

There are a number of independent CRM consultants out there, and they are well positioned to advise on the negotiation of pricing and term, as well guide your around some of the potentially costly implementation pitfalls.

The cost is only one dimension of a CRM project, and we shouldn’t forget the value generated by the system is critical. However if you keep costs under control, then the overall return on your investment becomes potentially significantly higher.

"One Penny Saved is Two Pennies Earned"

Loving P&C
DC*

Yes We Can – Part 3 - Public Sector CRM Manifesto

Dears,


Public sector organizations have as large an impact on customers' lives as private sector companies. In many countries, public authorities are trying to extract lessons from the first 20 or so years of private sector experience of CRM. They are asking questions such as:

• What are the lessons from the private sector? Has the private sector itself learnt from its own lessons?

• Are the lessons from the private sector relevant? If so, which are most relevant?

• Which models of customer management in the private sector are most relevant to different public sector operations? Does the answer to this question depend on the size of the public sector operation, or whether it is central, regional or local? Does it depend upon the objectives of the particular public sector operation; in particular on whether it offers customers full or partial options about whether they are to be managed (such as law enforcement, criminal custody, tax payment, versus higher education, employment or information services)?

• What does comparison with the private sector reveal about the main opportunities for improving levels of service while containing cost, or for saving cost while maintaining levels of service?

• Does the change towards more customer-focused ways of doing things have to be handled differently in the public sector, whether because of the political dimension, because of unclear, conflicting or rapidly changing objectives, because of the dominance of cost as an issue, or for any other reason?

• How can progress in the chosen direction be maintained, perhaps accelerated?

The track record of applying measurement-based CRM ideas to the public sector is relatively short; The public sector managers need to explore more relevant CRM Vision and processes before and during application of Private Sector CRM ideas to their domain. This article does not pretend to do anything more than provide a helpful summary of the main issues, and suggest to public sector management how it can learn (or not) from the very varied and problematic experience of the private sector in applying the ideas of customer management.

The term 'public sector' conceals an enormous variety of activities, such as:

• Defense;

• Law and order;

• Foreign affairs;

• Industrial - whether as a direct government activity, as a regulator or provider of support services;

• Revenue raising, eg taxation;

• Providing income, eg pensions, social benefits;

• Transport, whether infrastructure - airports, roads, traffic signals, testing, surveillance, or direct provision of public transport services;

• Postal and telecommunications services, regulation, infrastructure support;

• control over airspace, airwaves;

• health service provision, and inspection and audit or private provision;

• welfare, e.g. infrastructure and services: old people's homes, day centres, provision of access or funding;

• Education, leisure, arts.

Just as in the private sector, interaction between customers can be classified as case processing, involving in-depth diagnosis of need/qualification and possibly protracted interaction, or as transaction processing, involving relatively quick interaction with a very large number of standard cases. In practice many situations are some mixture of these two. However, the two have very different process, human resources, systems and data needs.

Examples of case management and processing include:

• child protection;

• legal aid;

• tax returns;

• hospitalization;

• prosecution for serious offences;

• treatment of chronic disease;

• housing;

• planning authorization;

• inspecting/testing compliance (eg weights and measures, health and safety, education);

• entitlement to education/loans;

• security/accident incident management;

• complex license allocation;

• Complex complaints and queries.

• Municipal Services

• Judiciary Penalty Imposition

• ETC …………………………….

Examples of transaction processing include:

• benefit payment;

• routine inoculation;

• simple licence allocation, eg driving, motor vehicle, broadcast reception;

• automated tax collection;

• routine complaints and queries.



The Challenge

In many countries, central and local governments and other public bodies are focusing on open government, improving citizen access and enhancing the quality of the services provided, while retaining the strong traditional focus of government on cost-effectiveness. These new foci manifest themselves in various initiatives from central and local government and other public agencies. They include:

• provision of electronic access;

• improvement in citizen service provision and management;

• Ensuring that social exclusion does not occur when new initiatives are implemented, and that those in need of help or service actually receive it, rather than those who take most quickly to new channels of access.

The challenges this new direction poses to governments are:

• engaging the external environment after years of inward focus;

• determining what the current situation actually is, before formulating new initiatives;

• establishing the current level of citizen service provision, including the development of acceptable measures and measuring tools;

• identifying where the gaps exist in the service provision;

• Directing resources in the most cost effective/prioritized way to improve the service.

Meeting these challenges is made more complex by a number of other factors, including:

• increasing customer/citizen expectations, caused by the performance (and perhaps sometimes only the promise) of the private sector;

• the rising numbers of lobby and other pressure groups;

• increased confidence of customers in using the media to put pressure on government for better treatment;

• the need to use new channels of communication and distribution to reach customers who have had problems accessing government services through traditional channels, while ensuring that these new channels can work in an integrated manner with older channels;

• the need to observe the government's sometimes very tough general requirements affecting how customers are managed in either sector, eg data protection law;

• the need to manage new relationships with the private sector service providers who are involved in some way in this change, usually as agents.


Special Issues Affecting Public Sector Customers

A number of special issues affect the inter-sector translation of good practice. These include:

• The existence of differential/unequal information between providers and clients in service delivery, particularly where provider is more expert than customer/citizen can ever hope to be, either because of life-stage (education), knowledge (eg health), or because of costs of information access. Some examples are health, law and education. This often applies to the costs/difficulties of applying general information to specific cases.

• Many activities are associated with dealing with problem/extreme rather than average cases (law, welfare, education, health), and the aim of government is to prevent people needing the services, when they do need them to ensure that they get served quickly and efficiently, then to minimize the need for the service to be used again. Government bodies can focus heavily on prevention and lose sight of the fact that some people will not respond and then need support and help. If they over-generalize, people can fall through the net completely and form part of an underclass who are not serviced and are outcast.

• Externalities exist: that is, the act of providing/receiving service affects others than the recipient of the service. Road congestion is the obvious example, but the same applies to any queue for a scarce service. However, social interdependence in the act of service consumption therefore causes greater social benefits than private benefits to suppliers, and can cause much greater social costs to citizens than private costs to suppliers.

• There is concern about the influence of distribution of income and assets on ability of individuals to take up or benefit from services, so the 'value of the customer' is measured by other criteria than money, eg 'need', or 'social priority'. In some life stages money ceases to become the benefit it is in others, as it becomes impossible to buy the level of care that is required by the individual.

• Customers often cannot exit, so they need to be given voice (for example, through representation).

• There is also concern about the provision of access, choice and redress.

• Many governments see the role of the public sector as providing socially important interdependent, non-marketable services for social optimality, particularly where market tends to produce non-optimal results.

• Often there is a relationship of trust and agency between provider and client. The idea is that the citizen trusts a professional supplier to do what is right. However, this has been called into question, and the question applies to both correctness of service and quality of service.

• In many public sector operations (eg health services), the service is delivered by professionals, with their own interests and agenda.

• There is some tendency of the professional to mystify the customer so that the customer cannot independently judge the quality of service, particularly where the customer has no choice or right to data showing the quality of the service delivered.

• Many public sector organizations are considered by government as its agent in helping it meet its objectives for the citizen. However, the agency may develop its own set of objectives that conflict with the government's. In other cases, the provider is supposed to be the agent supposedly acting on behalf of the citizen, but again may develop objectives of its own.

• Quality of service is an issue, and particularly where there is no competition, independent bodies are needed to monitor quality. This leads to the question of who vets the vetters without the vetting becoming an onerous amount of red tape to the providers. There has to be room for trust in a system that is becoming heavily geared towards policing.

• Consultation as to what services should be delivered is often highly biased, with activists influencing the nature of service provision.

• Lack of proper research means that customers' needs and experiences are rarely properly understood.

• The process by which the public sector allocates its benefits is often by rationing and queues as a substitute for the price mechanism, rather than by some socially optimal selection process.

• In cases where central government provides resources and frameworks and local agencies deliver, there is a process break between who does the analysis and planning, and then decision making, and who implements, or delivers. This can lead to delivery failure.

The list may go on beyond any limit but one thing which we can act now to make that little difference to people of your country is to get into Citizen Experience Optimization program not necessarily to invest in HiFi technology but to take little step towards understanding their immediate needs and enable the technology to help you Serve Better….Yes We Can


Loving P&C


DC*